Trading bot checklist: what to prepare before you build

Most of the time and money in a trading bot goes into questions nobody answered at the start. This checklist is those questions. Work through it before you talk to any developer, us included, and you will get a faster, firmer quote and a bot that does what you meant. To keep a copy, print this page or save it as a PDF from your browser.

Part 1: what to prepare

Your rules, written down

• The exact entry condition, in words a stranger could apply without asking you anything.
• The exact exit conditions: target, stop, time-based exit, or the signal reversing.
• How big each trade is, and the most you will hold at once.
• What happens when two signals arrive together, or a signal arrives while you are already in a trade.

Market, instruments and timeframe

• Which market and which instruments: a list of symbols, or the rule that picks them.
• The bar size or timeframe the rules are written for, and the hours the system should trade.

Broker and account

• Which broker, and whether your account type has API access.
• Whether the broker offers a paper or test account to try the system on first.
• Any requirements your broker or regulator sets for automated orders.

Data

• What data the rules need: daily bars, minute bars or every tick.
• How much history you want to test on, and where it will come from.
• Whether your broker’s data is enough, or the strategy needs a separate feed.

Risk limits

• The most you will lose in a day before the system stops trading.
• The largest position, per instrument and in total.
• Who can press the kill switch, and how quickly.

Where it runs

• Your own computer, a rented server or the cloud. A bot only trades while its machine is on.
• Who gets the alert when something goes wrong, and how: email, message or phone.

Home PC or cloud server? How to choose →

Ownership, budget and time

• Whether you want to own the source code.
• The budget you have in mind, in any currency, and when you need it running.

What "written down" looks like

An illustration of the level of detail that makes rules codeable. It shows how to write rules down; it is not a strategy we recommend.

Trade SPY on daily bars. Buy at the next open when the 20-day simple moving average closes above the 50-day. Sell at the next open when it closes back below, or if the price falls 5% below the entry price, whichever comes first. One position at a time, sized at 10% of the account. No new entries on the day of a Federal Reserve rate decision.

Every number is stated, every exit is named, and nothing depends on judgement in the moment. That is the bar. Our starter trading bot page lists the six things to send us, and the guide to what a custom trading bot costs shows how each answer moves the price.

Part 2: seven tests before it touches real money

• Pull the network cable mid-trade. Does the system reconnect and know what it holds?
• Send the same signal twice. Does it place one order, not two?
• Restart it while a position is open. Does it pick the position up instead of starting from flat?
• Let an order fill only partly. Does it handle the rest the way your rules say?
• Press the kill switch. Do new orders stop at once?
• Compare its positions with the broker’s at the end of a day. Do they match exactly?
• Run it on the paper account for long enough to see a full range of normal days.

The reasons behind each test are in our guide to the edge cases that separate a demo from a live trading system.

This is an engineering checklist. It does not tell you what to trade, and passing it says nothing about whether a strategy will make money. The strategy and every trading decision stay yours.