Automated Forex trading is a popular topic on blogs and articles since many people will look to automated systems as a means to earn Forex profits without any efforts. This is a myth, as Forex trading is extremely difficult, and automated trading is no shortcut.
Many manual traders have failed because the emotions of greed and fear affect their trading results. Once a person fails, he or she may turn to automated trading as a last resource to help them improve their trading profitability. No manual trading or automated trading system can promise or provide consistent profit.
Automated Forex trading systems are highly popular because they do much of the work. This is highly attractive and useful for a novice who is still learning how to trade, or an investor who wants to invest in the Forex market without spending a lot of time mastering the market.
Automated trading systems quickly allow these novice traders to participate in the Forex market. Learning to trade successfully consumes a lot of time. The Forex market operates 24 hours a day, 5 days a week. Automated trading provides the opportunity to back-test the system over at least 10 years of data within minutes.
Manual traders tend to develop their trading systems based on a hand full of samples and over a period of several years. This does not ensure that the system will be profitable over a long period, nor will you always understand how the system behaves over different market cycles. Finding a good automated system however isn’t a simple task. There are many duds out there, and with people selling false hope to others of becoming quick millionaires, it’s easy to fall prey to a scam as their sales pitch has become a science.
Profitable trading systems are not sold for $97 to individual investors. If you have a profitable trading system would you sell it for that price? What would happen when 10,000 people bought it, would the system continue to work? If it is too good to be true then it is more like a scam.
A manual Forex trading system is preferred by those who want some control over their trades. Manual traders can evaluate the flow of opportunities, the trends of the market, and additional variables, so whenever the occasion calls for you to determine whether a trade could be positioned or not. A manual trader has to deal with a lot of conflicting data i.e. one indicator can be providing a buy signal where as another indicator can be providing a sell signal. Different time frames of the same currency pair may provide conflicting trends. The question a manual trader has to ask is, "which timeframe chart do I trust and trade?"
Manual traders have to deal with greed and fear whenever they have an open trade in their account. Automated trades make a decision for the trader. The right type of system depends on them as a person.