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Manual or Automated Trading?

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Man vs. machine… who’s better when it comes to trading? After all, trading costs a lot of money. However, despite being all the rage over the past two decades, automated trading is still not a unique trading strategy.

But first, what are the main differences?

Trading

hand trade
Manual trading is the traditional method. Traders look at a variety of factors to assess the “health” of their business and their potential for profit and loss based on these factors. These include physical stock values, senior management past performance, and of course past stock performance. Armed with the right information, traders analyze risks and make calculated decisions about whether to invest and how much to invest.

automated trading
As the name suggests, automated trading is done by machines using algorithms. This allows them to trade stocks in a fraction of a second and of course process data much faster than a human can. Automated trading can analyze scenarios and, for example, monitor small sudden price movements in order to maximize profits. Merchants can also decide how much automation they want to use.

Both have advantages and disadvantages.

Manual traders can react to the latest news and be flexible to sudden changes in stocks while trading in algorithmic scenarios. Manual traders operate within a trading system and are subject to human emotions (fear, greed, human error).

Automated investments are extremely fast and eliminate the need for human decision-making. When it comes to automated trading, traders can set their own parameters.

It should be noted here that there are various merchants. Individual traders are individuals who trade in personal accounts, and institutional investors trade securities that are not available to individual traders and are often eligible for IPO investments.

Autotraders can run multiple  strategies simultaneously, but are subject to the risks of automated trading systems (disconnections and mechanical failures).

back test
Backtesting is part of an automated or quantitative trading strategy that looks at a stock’s past performance to see how it would perform if you invested today. A backing Trading strategy allows traders to make calculated decisions about a stock’s performance. In theory, if a stock performs well in backtesting, it may do well now or in the future. Testing in this way allows investors to make decisions without putting their capital at risk.

looking at the market
Manual trading is subject to human error and emotions, but still relies on a lot of market knowledge and experience.

There are many automated trading platforms today, many of which make bold claims about the returns available.However, there are also actual automated trading systems used by major financial institutions that can generate real profits. I have. It depends a lot on the type of investment you’re making and how you can get involved.

The best traders monitor the market all the time, but if you are trading to grow your account, you may benefit from using an automated system.

What is consistent is that there is no “wait and see” investment system. Even the most basic automated trading platform will require input at some point if you want to make money. Everyone stops making money at some point, so beginners have to deal with when they stop investing money.

final thoughts
The answer to whether automated trading is better or worse than manual trading is similar to many unhelpful but realistic answers. Because “it depends”.

Robots can arguably process information faster than humans and do not need sleep. However, automated trading platforms are based on algorithms and cannot adjust when unexpected events occur that change the nature of the market, such as earthquakes or changes in national leadership.

Automated trading also allows traders to reassess their theories and reduce risk. Manual trading is based on a more traditional approach that relies on the trader’s experience and knowledge.

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