The decision to trade automatically or manually can sometimes be challenging to make. Some people prefer automated trading to manual trading because it is a mode of trading tested by experienced traders.
Alternatively, some traders – especially those with good market intuition – prefer to adopt their own trading systems based on extensive market research and trade manually. In short, one must know their respective advantages and disadvantages before deciding the type of trading to adopt.
The fastest way for a novice to learn about the market is to engage in manual trading, which allows a trader to open or close their position in the market whenever they want. Opening a trade is relatively simple: it is enough to place a deposit, select a currency pair, determine the direction of the market trend, set the level of leverage – specifying stop loss and holds of profits – then open trading.
The steps listed above can be performed when traders decide to act; for example, when an economic report comes out, that pushes prices up. As such, manual trading can be highly satisfying, especially for traders who spend a lot of time tracking market behavior.
That said, successful trades, of course, require discipline and sound money management skills.
On the other hand, automated trading is a perfect way for novice traders to build their confidence in the market to prevent their weak psychological profiles from affecting trading.
Additionally, they can use tried and tested strategies to help ensure success in their trades. Even experienced traders are embracing automated trading to make trading more efficient.
The most apparent advantage of automated trading, as discussed earlier, eliminates time constraints by making the practice of constantly monitoring the market unnecessarily.
If a market change occurs when a trader is indisposed, the automated trading system will execute the buy and sell orders previously specified.
Also, automated trading prevents fear and greed from affecting traders’ decisions. Emotion is one of the main factors that influence profitability: fear and greed can cause us to close our positions prematurely or sell them excessively. In auto-trading, however, computer algorithms replace the human factor that leads to this emotional threat to profits.
Things to know before starting with automatic trading
Whether you trade automatically or manually, developing your own trading strategy is the best way to optimize your performance. If you create your strategy (which is essential), you fully understand the logic of the algorithm and entry and exit positions. You have a strategy that adapts to your investor profile and, above all, that you understand.
In any case, never buy a trading algorithm on the net. It’s a scam. If someone sells you an algorithm, it doesn’t work. Otherwise, they wouldn’t need to sell it.
Finally, read reviews before opting for one trading software. Biticodes review is a good example of what a review should encompass to offer detailed info about the software. Given that the market is abundant with this type of software, choosing the right one is the first step toward successful trading.