In Forex trading, you need some quick means or techniques to help you analyze the market and make more of profits than losses. And that’s where Autotraders and trading signals come in to assist in forex trading.
To help you on either choosing Autotraders or trading signals, I’ll discuss each item together with its pros and cons.
Autotraders is a slang or short form of the word automated trading mainly on Forex and its where all trades are executed through programs run by a computer. The plans are set to analyze the best time to either buy or sell a currency.
- Backtesting – Its where it determines the historical data and applies trading rules according to that information to check the viability of the rules and regulations set.
- Preserves Discipline – Autotraders ensure that discipline is maintained at all times. Once a trade rule is set and executed it cannot be altered since it’s done automatically. Also, pilot-errors are significantly reduced, and there is no way of keying wrong values when trading.
- Minimize Emotions-In human trading you may have emotions (such as fear, anxiety, and frustrations) affecting your trading capabilities. While in Autotraders there are no emotions involved since its executed by a computer system. And if there are any emotions there are minimal than in the case of manual trading.
- Consistency – Autotraders allows you to achieve a high consistency by trading your speculated plan and sticking to it.
- Reacts to Trade Opportunities Faster – Computers can respond faster to changing market conditions than manual trading. With Autotraders, you can get in and get out of the market without wasting even a single second. It has an improved order entry speed.
- 24/7 Monitoring – The computer does not require sleep, and as long as the Autotraders are set, you’ll monitor the market the whole day without missing an important detail.
- Diversify Trading – With Autotraders, you can employ various strategies or trade on multiple accounts at one time.
- Mechanical Failure and Monitoring – Computers are prone to failures due to hardware or software issues. Also, there can be issues with the internet connectivity, computer crashes, and power losses that can limit Autotraders monitoring capabilities.
- Over-optimization – If you employ Backtesting, trading techniques can look better on paper than when trading.
Trading signals offer suggestions of when to enter or leave a market when trading a particular currency pair. Signals provide the specific time and price to either buy or sell a currency.
- 24/7 Market Analyses – You don’t need to keep on watching the market since once an opportunity arises, you’ll receive a signal to alert you.
- Reduces Risks – Trading signals that are good reduces risks involved when trading because they provide real-time information about market changes.
- Opportunity to Learn More- After receiving the signals you can check the market and determine which specific factors affect those signals. With time, you’ll have gained more learning and experience in trading.
- Lots of Trading Signals – There are many trading signals at your disposal online. Some are free while others you need to pay for them.
- Scammers – These are people who claim to have authentic signals, and they are just behaving as signal providers to scam people their money.
- Expensive – Most professionals Forex traders don’t give free signals, and you’ll have to pay for them. Payment can be through paid subscriptions.
- System Errors – Which occur especially if the signals are from automated machines.
It all depends on what you’re comfortable with when trading and what you think is the best item (Autotraders or Trading Signals) to choose for Forex trading.