If you haven’t been living under a rock, you’ve undoubtedly heard about the ongoing discussion among Forex traders concerning the best trading approach.
Traders would have varying viewpoints, I suppose. Some people prefer manual trading, while others would rather use an automatic trading system, often known as a trading robot, to trade the Forex market.
However, some folks out there would kill for a decent selfie. So which one is actually superior?
In actuality, all strategies have their benefits and drawbacks, and each side has strong justifications for its position.
Let’s review the benefits of both manual and automatic trading in more detail.
Automated Forex Trading/Forex Robots
Let’s first quickly review what robot trading is and what the benefits of utilizing an automated trading system are.
How Do Forex Robots Work?
A piece of software called a forex robot, commonly referred to as an expert advisor or EA, makes trades automatically based on a predetermined set of criteria. This sort of trading is also known as automated trading or algorithmic trading, and it generally refers to a trading strategy that employs predetermined algorithms to automatically execute orders in the markets (often based on technical analysis indicators). But it’s not as sophisticated as it may seem.
These EAs and robots are also referred to as “black-box trading systems.” We have no idea how they are made or why they function. The only thing we can do is add it to our charts, look for a statistical advantage, and cross our fingers.
Advantages of Robot Trading
- They follow the trading strategy and plan you established. Robots don’t have time for rebellion.
- Your trades will ALWAYS be executed successfully by forex robots. An automated trading program won’t enter the incorrect lot size or make a purchase when it should be making a sell.
- More historical data can be ingested by forex robots than by human traders. Therefore, you can generally only keep an eye on a few markets or currency pairings at once if your technique applies to a large number of them. An automatic system won’t miss a signal if you just connect it to as many charts you want it to keep an eye on.
- Robot trading, in contrast to traditional trading, is always working in the markets and never get weary. That is three, four, or even ten times what a manual trader in the foreign exchange market trades.
Trading that is done manually means that a person enters trades rather than utilizing computer algorithms or systems. When a trader establishes a trading account and manually sets orders based on technical and fundamental research, it is the best way to explain it.
Advantages of Manual Trading
- Humans have a brain, which is their greatest advantage over machines. This implies that, unlike to automated trading systems, you have greater control over your profit objective and may handle your lost trades efficiently directly on a trading platform.
- Robots that trade automatically can only act in accordance with the scenarios that were programmed into them, whereas traders who work by hand may process all relevant information, including market circumstances.
- Humans are capable of considering unanticipated fundamental events.
- You may experience the actual energy and excitement of the forex market through manual trading.
- Human factors, which most computers cannot study or anticipate, affect supply and demand.
- People might stop trading when they notice that the market is moving abnormally slowly or erratically.
- Humans may choose when they hit their financial goals and when they believe the trend will keep going in their favor.
- Humans are able to assess market conditions and make wise trading judgments using qualitative considerations.
- Most crucially, computing logic will never surpass experience, knowledge, and intuition. Most traders have greater control over their trading decisions, profit levels, and to locate trading opportunities using a manual method.