Forex manual trading system can be defined as a trading system that involves humans or forex traders making decisions concerning the entry and exit of trades with no artificial aids. This form of trading system is in dissimilarity to automatic trading system which involves the use of programs linked to indicators to market data to initiate trades base on human instructions.
Even if sometimes computer programs are being used to obtain information and automated indicators are being used as watchful tools for potential trading opportunities, human input and decision will always be needed in other to authorize trades. Forex traders and investors always have the mindset that manual trading system is grander in that human influence and judgment is essential for risk management and checkmating market trends. Most forex traders have the feeling that automated trading should be used only for monitoring data for human explanation.
ADVANTAGES OF FOREX MANUAL TRADING SYSTEM
One advantage of Forex manual trading system is that the user has total and complete control on the type of trade ventured. The system does not follow strategies and does not carry out random and multiple trades; a fact that limits risk in trading. Most automated forex trading systems don’t function in a real life scenario. Meanwhile, by using a Forex manual trading system, one can take account of the different levels of changes that occur in a forex and currency market.
A Forex manual trading system helps a trader use qualitative factors to judge the current market factors which is not seen in an automated trading system. AForex manual trading system which has been repeatedly used in a current market can minimize losses in a great deal.
DISADVANTAGES OF FOREX MANUAL TRADING SYSTEM
1. IT WASTES TIME AND ENERGY:
Forex manual trading system requires that a forex trader invests a lot of time and energy in the development of a working trading strategy. It may take days and weeks to come up with a trading strategy that will yield an effective result.
2. DEPENDENCE THEORY:
The entire success or failure of the trading system depends wholly on the experience and idea generated/gained by the forex trader. In this context, another trader will not be able to achieve a similarly lucrative strategy.
3. INABILITY FOR RECURRENCE:
A forex trader might be able to find one trading strategy that satisfies his criteria for a live trade but might not be able to repeat the procedure in the development of another trading strategy.
4. NON-SYSTEMATIC TRADING APPROACH:
There is no exact systematic approach to trading strategy development. The design approach depends solely on every forex trader and follows no particular trail. One method might have taken 2 years while another will be less dependent on the experience of the trader.
In conclusion, the setting up of a Forex manual trading system can be very difficult but the merit far outweighs the disadvantages. In addition, using this trading system can maximize profit in the long run.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.