What Are the Advantages of Automated Forex Trading Vs Manual Trading?
By relying on similar algorithms to the ones used by signal providers, robots are able to see patterns in the way currencies fluctuate that enable them to make very accurate predictions. But rather than sending you such predictions via email, and leaving it up to you to act on the signal, a robot will execute the trade also.
This means that automated forex trading is a way of outsourcing your investing to the best possible trader: a machine that has been built for the purpose. If you think you can outperform a robot, we wish you the best of luck. If you doubt your ability to trade 24/7 without rest and win in excess of 70% of your trades, automated forex trading might be perfect for you.
Automated forex trading yields better results
The single biggest advantage of automated forex trading is improved accuracy. Robots use signals that are based on highly specialized algorithms. They only invest when the market conditions indicate a high chance of winning. Good automated forex trading systems will win more than 70% of trades. This is more than you need in order to turn a good profit.
If you are an experienced trader, you will know that winning 7 out of every 10 trades is a considerable achievement. By trading on candlesticks or other strategies based on technical analysis, you will need to be really highly accomplished to reach this target.
Of course, you can get there by subscribing to a signals provider. Signals can have a success rate of more than 70%. But you need to be available to act on them when they arrive, which brings us to the next great advantage of forex robots.
Automated forex trading frees up your time
You are free to go about your business whilst the robot takes care of business. This in itself offers two great plus points. First, you can benefit from signals that are generated whilst you are asleep, or at work, or in the gym, or on a date, and so on. Second, tiredness, hunger and all other human weaknesses are no longer relevant: the robot will trade at exactly the same level all day and night.
An automated trading system has no emotions, obviously, which is also an advantage. A good trader leaves emotions out of the decision making process. However, this is easier said than done. It is hard to resist hunches, or beliefs based on personal preferences such as a liking for the US dollar simply because you have made money by investing in this currency previously.
You should trade 100% clinically, without letting past performance or preferences get in the way. A robot has no other choice, because it has no idea of which currencies have earned you money and no preferences period.
Literally, the only thing you have to take care of when you automate your forex trading, is to establish and adhere to a money management strategy. It is up to you to decide how much money you want the robot to invest in each trade it executes on your behalf. This amount should ideally be in the region between 3% and 5% of your total account balance. Obviously, as the system trades for you, your balance will change.
Over time, it is likely to increase as you should 70% of trades. However, you can incur losing streaks also when trading with a robot. For this reason, many traders like to keep an eye on their money regularly. You don’t want to invest too much per trade, thereby risking big losses. Nor is it advisable to invest insufficient amounts as this will see you miss out on big potential profits.
Things to look for in an automated forex trading provider
Clearly, automated forex trading offers numerous and important advantages when compared to manual trading. But these advantages only apply if your forex robot delivers the results it should.
In order to make sure that you sign up with a quality provider, you should take the time to do some investigating. A robot is a system you trust to invest your hard-earned money on your behalf. Choosing the right one should not be taken lightly. Here are some important things to look for when considering a robot:
- Proven track record
- Win percentage
- Amount of trades completed
- Reputation
All good robots should provide information regarding the first 3 points on their website. Reputation you can check with a web search.