Auto vs. Manual Trading: Which to Choose – the Human
Basics & Industry, Forex Basics

Auto vs. Manual Trading: Which to Choose – the Human

With modern platforms for forex trading, more and more people are trying automatic signals instead of manual trading.

It is crucial to compare the pros and cons of automated trading and manual trading to determine the pluses and minuses of these two platforms and eventually to choose which one to use.

Let’s look on the features of automated trading first.

The primary advantage that is very apparent with automated trading is basically getting automatic signals. The trading can be accurate, perfect and error free, if and only if the program has been done properly.

One of the largest issues that a trader may face is his tendency to be undisciplined in performing tasks as planned. With autotrading, you will be guaranteed that the robot will be totally disciplined and will follow the program according to your plan. Usually, it is the ability to follow the set-up that makes the difference between a lucrative forex trader and a failed forex trader, so that’s a good point for autotrading.

Forex robots or simply bots can also perform trades correctly. If programmed properly, a robot will not buy when it must be selling. There’s also a very slim chance to invest in a wrong lot size and it will not misplace the t/p or the s/l. This is a great advantage in trading, because monumental errors in forex can be converted into your substantial loss. This is another point for the robot.

Moreover, robots can also process more data compared to a human forex trader. This means that if your approach can help you with several pairs of currency, you may only keep track of several pairs at a time. With an automated platform, however, all you need to do is to login into your account, and monitor all the charts that you want, and you will not miss any other signal.

Finally, the robot doesn’t get tired unlike human traders. Hence, you can trade and earn profits 24 hours a day and seven days a week.

Fairly enough, the pros of manual trading are the cons of automated trading.

The primary thing that a human forex trader has that a forex bot doesn’t is the capacity to think. Bear in mind that in automated trading, the robot can only make decisions based on the settings that has been programmed into the platform. For example, it may invest in Japanese Yen even in the midst of a strong typhoon that may affect the forex trade. Meanwhile, a human trader can easily make a decision because he has the capacity to react in this particular scenario.

Also, a human trader can easily assess that the forex market is moving in an awkward or unreasonable pace, and can decide to pull out the trades. In manual trading, it is also easy to decide when a trader has enough profit and when he thinks that the growth will be in his favor. Human traders can feel if the trade will be profitable based on his skills and experience and not on limited codes and programmed settings followed by a robot.

So it may appear that there are actually more pros in using manual trading, but there are also clear advantages in not having to think, not having to feel and not having a limited range of the information you can keep track and process in order to make a decision.

So which one to choose? Experts suggest choosing hybrid platforms, and don’t stick solely to manual or automated trading. Sure, you can use modern technology to help you be profitable in forex trading, but when the situation calls for thinking and emotions, a human trader can be beneficial.

Author:  Zahir is a Forex analyst from  Admiral Markets Australia