Automated Trading vs Manual Forex Trading


If you know about the forex trading market, you must have come across terms like automated trading and manual trading. It is normal to get confused as a beginner. Don’t worry in this article, we will discuss what they are, and how they are different.

Automated Trading

Automated trading is algorithmic or software-based trading done by the computer based on preset rules. During the past several years, automated forex trading has grown in popularity as more and more traders attempt to use software to trade the forex market. The speed, accuracy, and trading capital are the three key factors driving the popularity of automated forex trading.Automated forex trading raises profits while lowering exposure to market risk.

Your robots can begin trading anytime once they have been trained on your own data. Because of this, algorithmic trading requires only a single system setup. Once a week, you can review the analytics to make the adjustments. Trading manually necessitates your presence as you wait for the indications to line up with the approach you have chosen. Typically, you’ll trade one system and wait for opportunities to present themselves. There’s not much you have to do.

The usefulness of trading robots must first be investigated and tested, as they do not always provide a steady profit, before you begin utilizing such a tool. Also, keep in mind that automated trading has its risks and frequently entails greater commissions. To ensure that using automated trading would be effective, it is advised to test them first on demo accounts.

Manual Trading

Manual trading refers to when a trade is entered or exited manually and human judgment is used to make the decision based on self-knowledge and research. A manual trader is solely responsible for maintaining composure and executing trades as intended. Such a trader must be vigilant in their transaction monitoring and must possess in-depth knowledge of the market in order to avoid errors. All the activities like placing stop loss, entering or exiting a position, all are done manually by the trader. In high volatile forex markets, if a trader has enough market knowledge & expertise, they can build fortunes by trading manually.

Which is more profitable? Manual or Automated Trading?

If you trade manually, you will be motivated by your fear of the market’s movement, which will cause you to lose patience and place your trades quickly. Automated trading, on the other hand, has no emotional or psychological impact on your trades which is one of the biggest benefits of automated trading. However, automated trading cannot evaluate the market as people can. As an individual, we can observe the market and understand where the entries and exits are according to the changing market conditions but automated trading software will keep working on the basis of instructions given to it which sometimes can lead to losses. As such, semi-automation is required; machines are needed to operate the transaction, but manual decision-making is still required for entry and exit points.


By reducing human participation, technology and tools have given retail traders increased ability to execute highly disciplined trades in rapidly changing market conditions. The biggest benefit of automated trading is its ability to execute deals in order to maximize earnings even before a human trader blinks by seeing arbitration possibilities in microseconds. However, manual trading is a more beneficial approach for long-term success owing to the unpredictable nature of the markets.