Automated Trading vs. Manual Trading

automated trading

Trading is an art that not everyone is fortunate enough to master. There is an ongoing debate regarding which trading method is better; automated trading or manual trading. It’s important to keep in mind that both trading methods have their own advantages and disadvantages

Choosing between trading automatically or manually can be a difficult decision to make. Some prefer automated trading over manual trading because it has been tested by experienced traders. Other traders, especially those with a good understanding of the markets - prefer to establish their own trading strategies based on comprehensive research.

Although it’s the most popular way for a novice trader to thoroughly learn the markets, manual trading is surely not the easiest nor the fastest. Trading manually requires spending long hours in front of the screen learning, experimenting and analyzing the markets, in addition to self-discipline, good money management skills and financial understanding.

Manual trading enables traders to open or close market positions whenever they choose. Trading is relatively simple: you place a deposit, select a currency pair to trade, determine the direction of the market trend, set the leverage level (specifying the stop loss and profit taking points) and open the trade.

These steps can be carried out whenever you decide to act; for example, upon the release of a macro-economic report that causes prices to surge. Therefore, manual trading can be extremely satisfying, especially for traders who spend a considerable amount of time monitoring market behavior. 

Automated trading, on the other hand, is a great way for novice traders to build up their confidence, whether by watching the actions of experienced traders or by using robotic trading to manage their funds. 

Both Novice and experienced traders, can benefit from automated trading as it can make their trading more efficient. When you automate your trading, you get the most out of the markets from day one.

Algorithmic trading enables you to jump right in and start trading without having to put aside your other obligations. In addition, traders can use tested and proven strategies to help ensure the success of their trading.

One of the main advantages of automated trading, is that it frees all traders, experienced and new, from time constraints by eliminating the need to constantly track and analyze the markets. Even if a trader is unaware of changes occurring in the market in real-time, the automated trading system will execute the buy and sell orders that have been specified in advance.

Another big advantage is that trading automatically prevents emotions from affecting traders’ decisions and affect profitability. Fear and greed can cause us to close our positions prematurely or to overtrade. While trading Automatically trading, however, computer algorithms replace the human element that leads to this emotional threat to potential profits.

Keep in mind that automated trading algorithms are set to follow a pre-defined set of instructions for placing trades, in order to generate profits at a speed and frequency that is impossible for a human trader. However, due to lack of human intuition these systems must be monitored frequently and thoroughly, a task which requires a great deal of time and coding knowledge which not everyone has.

If you are interested in learning more about automated trading, try our Free 30-Day Demo.

Get Started

Back to Automated Trading