Is Bot Trading Better than Manual Trading?

December, 15th 2023

Is Bot Trading Better Than Manual Trading? You need to know these basic terms before working to make money. Manual trading is perfect for traders who enjoy avoiding complex computer-related processes. In manual trading, a human trader makes all the decisions during the trade. They can concentrate on their trading strategy without being troubled by intricate computer-related details. Computer trading bots can also assist human traders in their trading. The right tools for cryptocurrency traders can make the difference between good and great traders. While such devices are available in this area, some traders want to refrain from using the above resources. While various service providers offer many different trading bots, it is essential to understand the differences between both trading strategies. Let's dig deeper into both to understand that Is Bot trading better than manual trading.

What is Bot Trading?

Bot trading, also called algorithmic trading, is where orders are placed purely according to the trading strategy with no temporary thought modification during the period. The trading strategy must be specific and detailed enough so the trader does not make ambiguous choices during execution. The best-case scenario is to use an EA for trading. Even if an EA is unavailable, traders should imagine themselves as emotionless order machines in bot trading. For example, losses can only be stopped after the stop defeat level is touched, no matter how unfavorable the message is. Before the stop profit level is achieved, no matter how much you lost on the previous order, you cannot stop and lock in profits in advance.

What is Manual Trading?

Because orders are placed based on specific trading principles, these principles are explained in tiny detail, giving the trader more room for independent decision-making. Manual trading must be noted as not impulsive trading. It is also established on a deep understanding of the financial markets and extensive trading experience. Beginners follow buy and sell signals and place orders on their initiative, with a store of knowledge or accumulated experience. This model is impulse trading, not the manual trading we discuss here. It is like a novice and an advanced trader playing chess: the pieces move the same, but the thoughtfulness of the two is quite different. Manual trading allows you to "move with time" without considering too many restrictions.

Why is Bot trading better than Manual trading?

Whether manual, bot, or algorithmic trading is better depends on various factors, including trading style, objectives, expertise, and the specific market conditions you trade. Both approaches have advantages and disadvantages; your choice should align with your preferences and circumstances.

Bot Trading: What is it?

Bot trading is when all decisions regarding what to buy or sell are produced by a pre-programmed algorithm based on instructions specified in code. Traders, programmers, or "quants" may program manual strategies to execute trades automatically when certain conditions are satisfied.

Bots always remember to trade or let their emotions get better. They operate according to a predetermined algorithm as soon as they are delivered. The burden alleviates the user.
Computer programs that can perform complex calculations are called trading bots. Automation is functional when a trading strategy requires processing large amounts of information quickly or executing trades instantaneously.
Several trading assets can benefit from bots. Manually analyzing several coins at once takes a lot of work. Some signals can be overlooked or misinterpreted if they start arriving simultaneously. Bots can trade any given amount of a given asset. Bots can be used with the primary strategy if the user wishes to incorporate more market signals into the trading process.

Manual Trading: Why is it?

Unlike automated trading, which is managed by a system that executes trades based on a specific algorithm, manual trading requires traders to open and close positions manually. The person conducting the manual business uses the trading terminal to edit all the data. Alerts can also be positioned so that profitable possibilities are not ignored. It only happens with the trader's approval.

All transactions are handled. Market conditions are assessed when determining when to open and close positions. Nothing happens without trader approval.
The overall picture of the industry. Although bots frequently monitor these, traders can assess information and other external elements that may affect asset prices. They can also indicate how the market will react after disclosing additional information.
Quick response to changing market conditions. Traders can quickly identify significant changes in market trends and change their approach. On the other hand, the bot's algorithm cannot automatically change in such situations.

Reasons to Avoid Bot Trading

The past does not guarantee the future. Just because a system has worked historically does not suggest it will work in the future. Market conditions change, volatility changes, trends change, etc.
It is very comfortable for auto traders to over-optimize their systems or change their criteria to make past results look great. It is known as "curve fitting" among automotive traders and is a widespread problem. Traders may find the best variables for their system based on historical data, but it means nothing to future price data.
Hiring a programmer to assist in coding trading strategies is costly. Optimizations and modifications may require even more cost to research and modify. Another option is for traders to learn how to code independently, but this will almost always be another drawback.

Reasons to avoid Manual trading

Manual trading is time-consuming. Traders must research, place orders, and review trades and personal actions to achieve superior performance. However, some of these tasks can be semi-automated. For example, a trader can use a pending order to instruct a broker to close a trade at a profit or loss at a predetermined price level.
Successful trading requires a disciplined mindset. Many traders frequently let their emotions get the better of them and initiate "gambling. Always maintain risk management discipline, don't risk so much that you tolerate trading losses, and ensure you are trading consistently so that statistical advantages work in your favor. They focus on their process, not all the noise of other people's opinions.
Many manual traders need help to take responsibility only for their trading accounts, often blaming their strategies, platforms, and brokers rather than thinking internally about their actions and decision-making abilities.

Conclusion:

We have discussed each aspect Is bot trading better than manual trading? Now you have an easy path to choose one or the other. If you are short on money, it is better to select bot trading to make money. If you have enough money, you can choose to trade manually. However, if you have sufficient funds, you can select manual trading. Both automated and manual trading have their benefits. Manual trading involves rational human decision-making, while automated trading has no emotional bias. Manual trading is more suitable for traders who monitor the market themselves. Manual and automatic trading can be manipulated depending on current market conditions and availability.