Updated: Sep 5
When you start your forex adventure, you should make decisions about how to invest. There are two options to choose from, trade discretionally or using Expert Advisor (EA).
Let's compare the two types of trade, let's start with discretionary trade:
1. You sit in front of the computer all the time, waiting for opportunities to take a position, even a few hours.
2. During trading, you can improve or change something, not always for the better.
3. Possible delayed reaction to the generated position signal. Everyone can have a worse day.
4. Manually checking strategies on historical data is very time-consuming.
5. Physical limitation to several markets or time frames.
6. Trading is more stressful with larger amounts.
7. Limited time for everyday activities, trade itself and the development of new strategies for the future take up a large part of the day.
8. You may need high-quality equipment or services (mainly network connection) to invest according to your assumptions.
As you can see, discretionary trading requires a lot of time and work to be done at the expense of private life (meetings with family and friends).
Fortunately, technology is constantly evolving
With the development of technology, traders got new tools for creating strategies and testing their quality, and the physical placement of orders took over the strategy control programs, saving a lot of time.
Below I present the characteristics of algorithmic trading:
1. The robot is devoid of emotion, it does exactly what it was designed for, no more, no less.
2. Apparent transfer of responsibility to an automatic system. You can blame EA for the losses, but remember who designed it (still trading purposes) installed in the platform and allowed trade.
3. quick compare, you can compare the results of backtesting and real trade, if there are big differences, which means the strategy does something completely different, you just turn it off.
4. Easy backtest, the task will do the program for you in a few minutes.
5. Possibility of trading on dozens of markets or periods simultaneously.
6. EA controls trade around the clock, when you sleep, meet family and friends. He doesn't need sleep, rest, he is always ready to make transactions.
7. The process of creating and implementing automated strategies is at least 10 times faster than performing the entire process yourself.
8. Reduction of stress resulting from trade, mechanical approach to investment
9. Renting a VPS server generates additional costs
I described two ways of trading on the forex market, there is also no problem using a hybrid of these two methods. Now it's your turn to choose which way suits you best, the value of pips earned is the same in discretionary and algorithmic trading.
The most important is your comfort during trading😊