If you’re at the point to where you’ve decided you need Forex signals, it’s time to determine whether you’re interested in trading with manual or automated Forex signals.
Both automated and manual Forex signals have their own advantages and disadvantages.
Your own personal preference will come down to your account size, investment style, and the amount of trading experience you have.
Automated Signals Pros and Cons
One of the main benefits of automated trading signals is that they allow you to profit without doing much of anything. Automated signals allow traders to be free of the emotions that come with manually placing trades, and it allows anyone with a busy work and social schedule to make money while they sleep.
Also, automated signals eliminate the potential of missing out on profitable opportunities, with manual signals you have to deal with the latency issue of the signal service spotting the trade opportunity, sending it to your email or phone number, and then you have to place the trade manually.
Automated signal services sync to your own trading platform, such as MT4, or you must go through an outside third-party service. Signals are generated either by a real trader or by software, or robot.
If automated trading systems made every trader who used them a millionaire, then we’d all be walking around as millionaires. To put it bluntly, robot systems do not tend to do a consistently good job of predicting an asset’s future value.
Robots lack the knowledge, experience, and gut instinct that humans have.
There’s also the issue that most traders who utilize automated signal service inevitably come across, which is that while the system might work one week, month, or year under a certain set of market conditions, unless it is continuously optimized to align with current conditions, it will eventually fail.
Manual Signals Pros and Cons
Manual trading signals differ in that they require a human to enter the trade details into their platform.
To do this, the trader must be available with an internet connection during this time, which for most services tends to be during the morning.
Manual signals are beneficial in that they allow traders to actively control their own money.
You control what trades you consider to have a high probability of success and which trade ideas are a risk. Manual signals can also serve as a learning experience.
The downside to using manual Forex trading signals lies in our compulsiveness to invest emotionally.
This can lead to over trading, exiting out of winning trades early, magnifying losses, and even a margin call.
Timing is the other problem manual signal traders face. Mentioned above, with manual signals you have to receive the signal, open your trading platform, and place the trade.
There can be anywhere from a few minutes to a few hours from the time the trade idea is generated and sent out to subscribers to the time the trade is actually placed. This can result in lost trading opportunities.