Forex Signals: Manual VS. Automated Signal Providers
Automated trading is the new trend in the trading industry and a slew of forex signals providers are promoting their ostensibly foolproof signals. Some of these services can be managed by experienced traders (or not that experienced) and some by a trading robot which may monitor several financial markets including forex, stocks, commodities and even cryptocurrencies.
If you are interested in trading any of these financial markets and don’t have the necessary experience or a strategy yet, trading signals can be a very helpful tool that can help you extract profits without much hassle. However, while forex signals can help fast-track your trading carrier, it will be greatly beneficial to invest the time to familiarize yourself with the trading platform.
There are some forex signals services that can trade for you i.e. the ones available in the MT4 trading platform but almost all other third-party providers will be sending you the trading instructions via email or text and you need to execute the trades yourself and to do that you need to know what you are doing.
Automated trading signals
Most major financial institutions and investment firms employ the use of trading bots and we can argue that they can be quite effective as long as that the programmer who sets the rules is skilled both in trading the markets as well as in the programming language used to develop the bot. This is also why most providers request a monthly for their forex signals and why free forex signals seldom measure up to the competition. Developing an accurate and reliable trading bot for a forex signals service is hard work and no one is going to give away his winning strategy for free.
It’s common sense that in order to see consistent results in the markets, you need to trade consistently without getting distracted by detrimental emotions like fear and greed. Therefore, some signals providers prefer to utilize the trading signals developed by a trading bot or an Expert Advisor. These robots can trade multiple markets simultaneously and virtually without any downtime. It’s a very efficient approach to trading and saves a lot of time to both the trader and the trading signals provider
since the bot can be configured to send the signals automatically as soon as any opportunities are identified.
Besides, getting timely entry signals is crucial for your success in trading because timing the markets is everything. With the rapid movements in the forex market for example, a few seconds could be the difference between making hundreds of pips or blowing out your entire account.
Manual forex signals
While trading robots have the potential to be more efficient than a human trader, they are only as effective as the trader and coder who developed them. Having a professional trader with deep experience in the markets can be quite beneficial because they can identify unexpected opportunities that would otherwise go unnoticed by a conventional trading bot. A trading bot that can’t make sense of the fundamentals on the fly is at a disadvantage since it can only react to price action after the fact when the technicals are clearer.
An experienced trader will also have the advantage of being able to recognize when a market isn’t performing with the usual efficiency and may plan his action accordingly in order to protect his positions from unpredictable moves. Also, since a human trader doesn’t trade blindly based on the trading strategy, he can manage positions according to market momentum – letting his winning trades run for longer and securing further profits that a trading bot might have missed by exiting earlier.
Choosing a suitable provider
Both automated and manual forex signals are viable and suitable for investment but as you can see, both have their own strengths and drawbacks. If you are looking for the best forex signals provider, it would be best to try out several different services in order to identify which one best fits your investment objectives.
A common rule of thumb before signing up for a trading signals service is to request a trial period or to first apply the signals on a demo account so you don’t risk real money on a low-quality service. Always keep in mind, however, that there is no infallible signal and that trading in the financial markets may not be suitable for you if you are risk intolerant.
Most forex signals providers will suffer a few losses during the trading week, but overall performance should be positive.