Manual Trading vs. Automated Trading: Which is More Successful?

Written by:

Mohamed Hafiz


April 1, 2022

Table of Content

Trading by computer is not always more profitable than trading by hand. However, it is unquestionably more profitable than manual trading. Investment is a process in which automated trading or automation is a natural conclusion for an investor.

You are the one who bears the risk in automated trading. A single blunder might render you defenceless. Traders, on the other hand, are exposed to a high level of risk with any type of investment.

Trading with automated software, on the other hand, might be rapid or slow. It also relies on how durable your design is. Furthermore, building a robot is not something that can be accomplished in a week. It’s like driving a car without a steering wheel, accelerator, or brake pedal.

We’ll break down each component carefully so that our traders can see an outline. Let’s begin with a brief overview of both manual and automatic trading.

What Is Automated Trading

Automated trading is a computer programme that makes money based on market analysis. Trading robots act as agents for traders. Traders can also define unique trading rules with algorithmic trading. Trades will be done automatically by a trading gadget once they have been programmed.

Trading robots keep track of asset prices and execute transactions based on predefined rules. However, for automated trading, you must first discover the ideal trading strategy. We’ve compiled a list of the best trading software that assures earnings.

The automatic trading bot is controlled by a command. You can either enter data after evaluating the market or use the pre-programmed parameters. After giving the direction, you don’t have to sit in front of the monitor. The trading system will make decisions without being influenced by emotions.

It is simple to use, yet not simple. A bot’s simplicity allows it to be used by those who are unfamiliar with its complexity. To create a successful, flourishing trading method, it takes time, dedication, attention to design a profitable booming trading system, and of course more time and patience!

What Is Manual Trading

Manual trading necessitates human decisions. It’s a process in which traders and investors manually input their strategy utilising various charts and tools. Traders are considered manual traders when they enter the financial market by hand. That means you’re sitting in front of your computer or smartphone, clicking a mouse to open and close deals.

Additionally, manual traders may use trading software to assist them in making trading decisions. Manual trading, on the other hand, involves traders manually analysing the market and placing buy or sell orders.

A trading analysis, on the other hand, is required for traders to choose when and what to trade. In manual trading, skilled traders combine technical and fundamental information to construct a lucrative trading strategy.

Why Traders Fail With Automated Software

Novice traders who are still learning how to trade binary options are drawn to not only the best binary options robot but also automated trading. It is also well-liked because it does nearly all trading tasks. Trading emotions are thus not fully involved in automated trading, yet traders frequently fail for a variety of reasons.

The method used by traders to create a profitable trading strategy is completely counterintuitive. When developing a strategy, people consider the best possible outcome.

On the other hand, you must always build automated techniques with the possibility of failure in mind.

You must not forget the other side of that, which has little to do with the trading world. It is prudent not to completely rely on the trading robot. A robot has less control over its environment than a person. Because auto-trading necessitates the adoption of a pre-determined strategy.

So, before running the trading software, a trader must examine the market movement for the greatest result and profit. Stop losses or blow-up accounts come to mind when most people think of failures. It isn’t the primary reason for your failure.

Why 90% Of Traders Fail In Manual Trading

A manual trader creates a system for buying and selling trading positions based on asset price movement. They conduct business depending on their ability. However, 90% of traders continue to accept their failure.

Our goal at this point is to assist our readers in overcoming failure and achieving the most profitable conclusion possible. However, the causes for failure will differ from trader to trader, but these are the most common reasons for failure.

1.     Backtesting:

You may have heard of a demo account. Traders utilize a demo account to evaluate the platform before trading online. It is vital to not only test the platform but also to develop a plan. Backtesting, on the other hand, is not just for automated traders; human traders should also perform it. It will demonstrate what to expect from a strategy and provide you with a trade database with which to compare your live trading performance.

You can read this comprehensive demo trading tutorial to understand more about the value of a demo account.

2.     Lack of Education:

Another reason for failure is a lack of trade education. Trading success is determined by how much knowledge you have before making your first trade.

It is a serious business, and you must obtain the highest available education. You can increase your trading talents with the help of trading knowledge. Furthermore, it is a profit-generating magic wand.

3.     Trading Emotion:

Trading emotion is a subjective experience. It also affects decision-making. Bringing emotions into trading is a poor idea, although it can be beneficial to traders at times.

Regrettably, traders let their emotions control their trading. It’s not easy to remove emotion from trading. For traders, it is the most challenging task.

4. Money Management:

Money management is essential for success, particularly when the market becomes volatile. One can save money if one follows this rule. Risk management is especially important for traders who use leverage. Traders in binary options do not employ leverage to complete trades.

Traders, on the other hand, are often advised to invest 2% of their cash. It also assures that binary options provide a long-term profitable return.

5.     Trading Plan:

The trading plan serves as a roadmap for traders on how and when to trade. The entry and exit points of each transaction, the trading time zone, and market movement are all part of a fundamental trading plan.

Furthermore, depending on his trading style, a trader will determine whether to establish a short-term or long-term trading plan.

Is Automated Trading Profitable?

Trading profitability is determined by the approach used to place an order. A trading strategy is essential for all traders, whether they trade manually or with algorithms.

An auto trading system might help you expand your account quickly. However, it is not always advantageous for traders who are too lethargic to conduct market research. It’s important to note that without the right strategy, the trading robot would fail.

Trading bots can be created by anyone based on market action. To run a bot, you don’t need to be a coder. Furthermore, you can only create a productive trading environment if you adhere to the following guidelines:

• Use the economic calendar to analyze the trade market.

• Limit yourself to one trade per day and stay away from markets with significant volatility.

• Don’t put all your faith in trading robots.

Manual Vs Automated Trading

There are a few minor distinctions between manual and automatic trading. If you have past trading experience, both methods of trading can be rewarding. However, you want to discover which trading approach is the most profitable.

Both strategies have their own set of advantages and disadvantages. Trading psychology has proven to be the most difficult challenge for many manual traders. It’s nearly impossible for traders to remain calm and rational during both profitable and losing periods.

Traders frequently disobeyed simple guidelines, resulting in the loss of countless trading accounts. People favour automated robots in these situations.

But, logically, if you can’t follow your rules while trading manually, what makes you believe it’ll be any different when trading with robots? As a result, follow your guidelines and never distrust your robots.

The trading market, on the other hand, is unpredictably volatile and continuously moves. In some situations, the robot is unable to react as a human would. You should also consider the fact that manual trading takes time.

Because they have day jobs, many traders are unable to spend numerous hours in front of the trading monitor. The basic line is that how you execute your trading plan is more essential than whether you trade manually or using an automated system. Also, what is the logic behind your trading strategy?

It makes no difference whether you are a manual or automatic trader if your trading plan and method are faulty in the first place.


Finally, the mindset of a manual trader differs from that of an Autotrader. You must have faith in the system and its capabilities. Another plus is that you may keep an eye on the market at your leisure. It is, nevertheless, preferable to choose a time frame.

After working as an Autotrader, I can now go out and have coffee, tea, or both while the machine trades for me. In the middle of trading, I can also watch my favourite television series. It’s an unrivalled sense of liberation that you too can enjoy!!