Automatic v Manual Trading in Forex

[ForexArticles]

The automatic trading is a new concept in Forex. Its popularity increased dramatically in the recent years. The statistics show the 30% of total trades are executed by automatic software in the USA. It can be a combination of logarithms, Expert advisors and so on. However, the traditional manual trading is still preferred method among retail and institutional traders. We compare these two methods and point out cons and pros. Then, you can make a choice in favor of one, or a combination of both.

Automatic Trading
It simply means that your trades are executed automatically. In other words, the software will do the entire process without the active participation of yours. It opens a trade, close, put stop loss and take profit levels. We made a list of top and reliable signal providers. Some may think that this is a Holy Grail and why to spend the time to even learn to trade. It is important to note that it comes with some cons too.

Pros
Forex market never sleeps. It is 24/5 and no human can sit in front of the screen all the time. Thus, when you sleep or busy doing something else you missing opportunities. Trading Software always there for you. Emotions – Sometimes the trader gets emotional, which results to lose. This can never happen using automatic trading. It always follows its written rules.

Time – Trading is not easy that you can learn in a few days. It takes time and effort to develop all the necessary skills to become a consistently profitable trader. If you employ software, then there is no need to spend countless hours for learning and practicing. You save a lot of time in the process of it, as you are not actively engaging analyzing the market and executing trades.

Cons
Consistency – No software is profitable for the long run. The market changes and it may not be profitable in a year. Thus, it needs regular updates to make it compatible with today's market conditions. Error – there is always a risk that some error can occur. It needs a regular control that the software works fine.

Manual Trading
It is more a traditional model, where you make all the decisions based on your interpretation of charts. You actively engage into the market, which gives a full control. You can enter, exit or hold trades anytime you want.

Pros
Interpretation – the every market moment is unique. Similar patterns and cycles repeat, but not exact same ones. The human brain is the most powerful computer. It can interpret the data to increase profits and reduce the losses to a minimum.

You are there if something unexpected happens in the market. For example, the CHF dropped massively on January If your software had CHF trade opened that time, you may have massive losses. Same applies when the economic reports are released and the price gets so volatile.

Cons
You have to develop strong discipline habits. If you do now follow your trading plan and making emotional decisions you cannot be profitable. Risk control – you must be able to manage your risks carefully. Having a winning strategy does not mean you make money.

Spend hours in front of screens.

In conclusion, this article will help you to make the main difference between those two models. Choose the one, which best suits your trading style and personality.