Automated Trading or Manual Trading…

There are pros and cons to both styles of forex trading, but which is best? Lets find out.

Manual Trading – Pros & Cons

Common methods: (1) manual execution of a trader’s own strategy, (2) manually executing trades based on signals published on Twitter or elsewhere, (3) Guesswork!

Manual trading has an extremely steep learning curve and the odds of survival and not losing everything are heavily stacked against traders. 90% of traders suffer losses meaning they can no longer trade, 5% break even, and 5% are profitable and successful.

It takes a long time to study the intricacies of the forex market and learn trading techniques to really get a feel for how the complex forex market works. Manual trading requires a huge amount of commitment and discipline on the part of the trader as well as a lot of patience to be successful. Beginners to the market will likely suffer heavy financial losses during the learning process while trying different strategies before they find a successful strategy – if their account balance isn’t blown before that time!

Manual trading does however give traders a real feel and thrill of the market and its volatility. Manual execution lets traders learn from mistakes and experiment with different techniques, tools and strategies. This of course relies on the trader’s ability to reflect back and actually learn from their mistakes and change their trading behavior when they recognise the same or similar situations arising in future.

Successful trading is a mix of art and science which manual trading can achieve with a combination of manual execution and technical tools and analysis. Again, the effectiveness of this depends entirely on the trader’s skill, analysis, interpretation, discipline, dedication and speed of execution.

At the very least, traders gain experience with manual trading – but at what cost?

Automated Trading – Pros & Cons

Common methods: (1) Expert Advisors, (2) automatic trade copying (also frequently referred to as trade replication or duplication).

Traders should consider whether Automated Trading Systems are the best option to trade in today’s high-speed and technologically based forex market. Since the major banks, trading firms, and brokers are employing automated systems to execute a large proportion of their deals, it is right that individuals consider utilising the same tactics.

Automated trading is an extremely good way to execute complex strategies and manage multiple trades simultaneously. Automated systems are powerful and accurate. They can perform thousands of calculations in milliseconds, and they can store and recall more data and information than the human mind.

Automated systems are however limited as they lack the fine art and experience of successful and experienced traders. They are programs designed to execute certain orders under certain conditions and nothing more.

EAs do let traders capitalize on more potential setups and relieves traders from continuously monitoring price and chart screens. Traders can remain calm while the automated system constantly scans the market for opportunities.

Beginners find EAs and automated systems attractive as they grant instant access to the forex market and the potential to start earning from day 1. No advanced knowledge is required on the part of the user, which opens up the forex market to many new players. EAs eradicate the learning curve and the associated down-time during the learning process.

Automated Systems like EAs may look good on paper. However, there are many scams and fake reports on the web, so beware! It also requires a lot of research to find, research and pick a winning automated system that is right for you and your risk appetite.

EAs also require frequent updates to keep them operating as they are meant to, and developers often discontinue their support and updates. There are usually no alerts or indications EAs are not functioning correctly either.

So which method of trading is better? Manual or Automated trading?

The Winner Is …

Automatically Copied Trading Signals!! Encompassing the best of both Automated and Manual trading, these Automated Trading Signals may come from either (or a combination of both) forex trading professionals and automated systems, and their trades are automatically replicated to your Meatrader4 account.

In an ideal world, manual trading is a viable option.. But humans are not efficient or perfect, nor do many of us have the time, resources, skill and discipline to learn to become successful manual traders. Humans make mistakes and are easily influenced by powerful emotions like fear and greed. Without the skills, knowledge, experience, funds and tools, most humans are highly unlikely to succeed trading manually.

Beware of Automated Systems like EAs that look to good to be true - there are lots of scams and bodged performance reports online! If you are insistent on trading this way, ensure to thoroughly research the EA or system before parting with any money or trading with real money. Also check who the developer is and how you can contact them, should you ever need to.

Check out FX Copy’s Automatically Copied Trades. We make people profitable!


About the Author

FX Copy are professional forex traders and signal providers. The team have years of experience with top-tier banks and hedge funds, now managing personal fortunes exceeding $2.5 million.