There are two schools of thought when it comes to trading forex – those who prefer using trading robots for automatic trading of their forex accounts, and those who prefer to do things manually, from the analysis up to the actual placement of orders and liquidation of positions.

Let us analyze the advantages and disadvantages of both systems and see which one would fit your trading personality.

Automated Forex Trading

In an automated forex trading system, a forex investor usually employs the aid of a trading robot which can be attached to his trading platform. This trading robot, sometimes in the form of an Expert Advisor, is computer procedure or program which is pre-set to make trading decisions based on what it sees and analyzes on the trading charts. Depending on thee rules set by the program involved, the robot automatically enters orders, places stoploss levels, and determines take profit levels.

There are many commercially available trading robots in the market right now. Just a simple google search for trading robots would given numerous results of these aids for forex trading. It is up to the user if he finds the cost of the forex robot acceptable in view of the profits expected to be generated by the robot.

Of course, there are also some free Expert Advisors which anyone can find in the internet for free. Just know where to look for and you will find several trading EA’s available free for download. A rich source of these EA’s would be the forex forums where forex traders help each other in developing trading strategies and converting them into automated trading programs.

Automated trading gives forex investors the advantage of trading with objectivity. The emotional factors of human fear or greed, which sometimes hinder objective judgment, are eliminated with the use of forex robots as you let the decision-making to the computer program itself. Also, in a fast-moving and extremely volatile market situations, automated trading can have distinct advantages in entering orders since humans are obviously slower in clicking manually.

Manual Forex Trading

The second group of forex traders includes those who prefer to trade forex using the conventional manual methods. These traders prepare their trading plans in advance where they analyze price charts, draw trendlines and Fibonacci levels, plot support and resistance levels, compute for the optimal number of lots to be used, and study their preferred technical indicators thoroughly. Aside from these technical preparations, some manual traders also trade based on fundamental data being released by central banks and national governments regularly. Stoplosses and target profit levels are computed and entered on trades manually.

Manual forex traders have the advantage of being more flexible in terms of decision-making. Although some may not necessarily view this as an advantage, being able to make decisions in order to extend profit runs or cut certain losses, may sometimes prove profitable for a forex account.

The two groups of traders mentioned above have their own advantages and disadvantages. It really depends on a forex investor as to which type of trading action he would prefer. His trading personality, appetite for risk, and preferred trading strategies would determine as to which type of forex trader he would belong to.

Then, there are some new semi-automatic trading options available right now for forex traders who prefer the manual approach of analyzing forex charts but also like the automatic features of trading. Using manual analysis of forex experts who provide trading signals, forex traders now have the option to apply those trading signals as order entries into their accounts automatically. It is essentially like having managed forex accounts with the same advantages of automated trading.

But whatever type of forex trading it is that you prefer be sure that it is the one that you are more comfortable with. And in the end, it is also the profitability of your system which would determine if it is the right one for you.

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Tags: automatic trading, manual trading, trading robots, trading strategy, trading system

Posted in Trading Strategies