Automated Trading or Manual Trading?
Trading is a form of art. One that not everyone is fortunate enough to be able to master. There is a constant debate regarding which trading method is better; automated trading or manual trading.
Which do you prefer?
Both trading methods have their own advantages and disadvantages, so choosing between trading automatically or manually can be a difficult decision to make.
Some traders 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.
Why manual trading?
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 you to open or close market positions whenever you choose. Trading seems 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. This makes manual trading extremely satisfying, especially if you spend a considerable amount of time monitoring market behavior.
Why automated trading?
Automated trading, or algo 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.
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. You can use tested and proven strategies to help ensure the success of your trading.
One of the main advantages automated trading offers, is that it saves precious time for all traders, experienced and new, by eliminating the need to constantly track and analyze the markets. Even if you are 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 your decisions and affect profitability. Fear and greed can cause you to close your positions prematurely or to overtrade. While trading automatically however, computer algorithms replace the human element that enables this emotional threat to potential profits.
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, it’s important to keep in mind that 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.
The best of both worlds.
DupliTrade’s team found the ultimate way for you to enjoy the best of both worlds. Our platform lets you automatically copy the trades of other experienced traders from their own trading accounts on to yours, creating a diverse, monitored and professional portfolio. If you are interested in learning more about automated trading, try our Free 30-Day Demo.