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Manual and Automated Trading
A very common question traders make is whether it is best to use manual or automated trading. Both types of trading have their respective pros and cons, and so you cannot really say that one is better than the other. There are also various factors to take into account, including the particular trader’s goals, experience and personality.
Manual trading, or as it is sometimes referred to, self-trading, is all about having the trader make independent trading decisions. Naturally, such decisions can make or break the trader, as if he really makes great choices, then he can avail of a profit, whereas if the decisions made are not ideal, he will have to suffer losses.
The trader’s experience and trading skills are key here. The trader will have full control, and is not interested in utilising any special tools or software in order to make his decisions.
The main advantages of manual trading are that the trader will be in control of it all, and he will be focusing on the importance of reacting quickly to relevant information and news.
However, in order to do well, the trader will need to be confident about his knowledge and trading skills, and hence this is not such an ideal option for a beginner. Moreover, it is worth noting that trading manually on smaller timeframes can be considerably challenging for any trader, regardless of his experience. It is not that easy to sit at the computer and be constantly aware of what is going on in terms of news updates, charts and market releases.
Then there is Automated trading, whereby the trader is not in full control. Here there will be special software, or a trading robot / EA. The Expert Advisor is actually based on an algorithm. It will open trades according to predefined parameters, which the trader will have set.
As a result the trader will not need to be constantly monitoring it all, as the robot will be handling it automatically.
One of the main benefits of automated trading is that there is no need to worry about making wrong decisions which are based on emotions. Fear, greed and other emotions will not be affecting the decisions made, and so chances are that there will be better results at the end of the day. Random errors and mistakes can also be avoided. The EA will also identify chart patterns and look for trends.
Traders can choose from different EAs such as Trend EAs, Scalper EAs, Multicurrency EAs and Hybrid EAs. Such EAs can be great for traders as they make things somewhat simpler, but it is important to note the main drawback of such trading, which is the fact that the advisor’s flexibility is entirely dependant on the algorithm it utilises.
The software is not able to react to any changes that occur in the market if they were not included in its algorithm. Hence the trader should still be cautious and keep an eye on what is going on to make sure everything is functioning well.
So as a trader you need to take into account these pros and cons of both types of trading so as to choose what seems ot be best for you.
Manual trading, or as it is sometimes referred to, self-trading, is all about having the trader make independent trading decisions. Naturally, such decisions can make or break the trader, as if he really makes great choices, then he can avail of a profit, whereas if the decisions made are not ideal, he will have to suffer losses.
The trader’s experience and trading skills are key here. The trader will have full control, and is not interested in utilising any special tools or software in order to make his decisions.
The main advantages of manual trading are that the trader will be in control of it all, and he will be focusing on the importance of reacting quickly to relevant information and news.
However, in order to do well, the trader will need to be confident about his knowledge and trading skills, and hence this is not such an ideal option for a beginner. Moreover, it is worth noting that trading manually on smaller timeframes can be considerably challenging for any trader, regardless of his experience. It is not that easy to sit at the computer and be constantly aware of what is going on in terms of news updates, charts and market releases.
Then there is Automated trading, whereby the trader is not in full control. Here there will be special software, or a trading robot / EA. The Expert Advisor is actually based on an algorithm. It will open trades according to predefined parameters, which the trader will have set.
As a result the trader will not need to be constantly monitoring it all, as the robot will be handling it automatically.
One of the main benefits of automated trading is that there is no need to worry about making wrong decisions which are based on emotions. Fear, greed and other emotions will not be affecting the decisions made, and so chances are that there will be better results at the end of the day. Random errors and mistakes can also be avoided. The EA will also identify chart patterns and look for trends.
Traders can choose from different EAs such as Trend EAs, Scalper EAs, Multicurrency EAs and Hybrid EAs. Such EAs can be great for traders as they make things somewhat simpler, but it is important to note the main drawback of such trading, which is the fact that the advisor’s flexibility is entirely dependant on the algorithm it utilises.
The software is not able to react to any changes that occur in the market if they were not included in its algorithm. Hence the trader should still be cautious and keep an eye on what is going on to make sure everything is functioning well.
So as a trader you need to take into account these pros and cons of both types of trading so as to choose what seems ot be best for you.