FX Trading Alerts: Manual Vs Automated Signal which is the best
The world of foreign exchange is full of opportunities to make money by trading global currencies. The market consists of both novice and experienced traders. Most such traders use FX trading alerts to make their journey smooth.
However, traders new to trading signals are generally confused between automated and manual trading signals. Being a reputed signal provider, Carlos and Company understand traders’ confusion. So in this blog, we will conduct an in-depth study on these signal types and find out which will be the best forex signal type for you.
Here's a quick look at what you'll read
FX trading alerts are the suggestions or recommendations generated using a variety of styles. These signals provide trade entry and exit information to traders so that they can place trade accordingly.
Manual trading alerts are generated by forex market experts, researchers, analysts, and experienced traders with great market understanding.
Automated Signals are buy and sell signals generated from highly advanced computer algorithms, robot software and programs. These systems use technical analysis tools and analyze real-time data to generate forex alerts.
Manual trading signals are generated by market experts manually. Meanwhile, automated signals are generated using algorithm-based computer programs and robotic software.
The right signal choice depends on your strategy, currency pair, risk, capital, and knowledge. Manual signals can be suit able for novices and traders with strategies like swing or position trading. Meanwhile, advanced traders can use automated signals.
What are forex trading alerts?
FX trading alerts are the suggestions or recommendations generated using a variety of styles. These signals provide trade entry and exit information to traders so that they can place trade accordingly.
Identifying forex trading opportunities requires trading knowledge, interest, time, and technical and analytical skills. Not every trader has the calibre to determine potential trades. Thus, many traders seek the help of forex signal providers to plan their trades.
Types of Currency Signals
There are numerous types of trading signals in the currency market. However, we can classify them into two major types: manual and automated. Let us have a look at these types:
Manual FX Trading Alerts
Manual trading alerts are generated by forex market experts, researchers, analysts, and experienced traders with great market understanding. The concept of manual trading signals is of mutual benefit.
Forex signal providers share their knowledge and insights. In return, traders pay them fees or commissions. In this way, traders get signals, and providers can make money out of their knowledge.
Pros of Manual Trade Signals
Informed Decision Making
Manual Signal providers organize research and study market conditions. Such people generally have a good experience in the market. They monitor chart patterns, financial news, articles, economic data, and overall market conditions. Based on the research and analysis, they provide trade alerts that ultimately lead to informed decision-making.
Human Intelligence
No matter how much technology grows, it cannot replace human intelligence. Intuitions also play a crucial role in trading. Researchers generally have good experience in generating signals. Many times, when technical analysis indicators give misleading interpretations, human intelligence is required to generate powerful currency signals. Traders can only take the benefit of this intelligence when the signals are manual.
Consider Fundamental Analysis
Generally, with automated signals, technical analysis and historical data are given more importance. However, the manual signal providers also consider current market conditions and fundamentals like news, announcements, economic and geopolitical events. The Forex market is dynamic, and thus, signals that consider current market conditions are better.
Less Repeatability
Automated FX trading alerts are generally based on predefined criteria and technical analysis indicators. So even when using different automated bots and providers, the chances of repetations are there. However, with manual signals, different brains with different ideas generate different signals. So, the chances of repetition or similar signals are lower.
Cons of Manual Trading Signals
Time-Consuming Process
The process of generating signals manually requires a significant time. So, it cannot be a suitable approach for high-frequency traders like scalpers or day traders. In addition, a research analyst or expert will have knowledge of one market or specific currency pairs. So, manual signals may not be an ideal option for traders who trade in diverse instruments.
Emotional Trading
Humans tend to attach emotions while making trade decisions. With manual signals, the chances of making impulsive and aggressive decisions are higher. A signal developed due to greed, stress, anxiety, FOMO or overconfidence may result in an unfavourable outcome.
Dependency
Numerous signal providers in the market claim to be the best. However, with manual signals, the quality of trade alerts depends on the person generating them. So, your profit or loss from trade depends on the signal provider’s knowledge and expertise.
Automated FX Trading Alerts
Automated Signals are buy and sell signals generated from highly advanced computer algorithms, robot software and programs. Under this, an automated system uses technical analysis tools and analyzes real-time data to generate forex alerts.
The signals are based on pre-defined rules and market conditions. It may use indicators such as Bollinger bands, support and resistance, moving averages, RSI and others.
Pros of Automated Trading Signals
Backtesting
Automated systems allow traders to test the FX trading alerts on the live market conditions and check their accuracy. Traders can analyze the results and customize the system according to their needs and strategy.
Diverse Trading Signals
The financial markets work on the same principles, but the conditions are different. With automated bots, traders can generate signals of diverse assets of forex, stock, crypto, commodities, indices, and other related markets. In addition, there are no time limitations; traders can receive signals 24/7. So you can place a forex trade when you want and in the currency pair you love.
Fast and Efficient
Algo forex trading signals are generated using advanced bots that are capable of analyzing large numbers of data in seconds. So, ultimately, traders can generate ultra-fast signals. In addition, such systems are free from human errors. So, undoubtedly, they are more accurate and efficient.
Cons of Automated Trading Signals
Expensive
Using highly advanced software or automated trading tools to identify potential opportunities may result in significant costs. Not every trader can afford to pay for such signal services.
Technical knowledge
Many traders develop their own systems to generate automated forex signals. Meanwhile, traders can even use third-party software to get such signals. However, technical knowledge is required for any method you use. Traders should have a basic understanding of coding and programming languages.
Manual vs Automated Trading Signals: Which Better
Both manual and automated FX trading alerts have advantages and disadvantages. The right choice depends on your strategy, currency pair, risk, capital, and knowledge. Manual signals can be suitable for novices and traders with strategies like position or swing trading. Meanwhile, advanced traders can use automated signals. Also, you can use a combination of automated and manual signals for maximum results.
At Carlos and Company, we combine automated software and human intelligence to generate valuable signals. These signals are suitable for a diverse range of strategies. The combinations increase the overall accuracy and quality of signals, and the chances of positive trade outcomes are high.
