Bot trading, also known as algorithmic trading or EA’s (expert advisors), is the process of using Artificial Intelligence (AI) to automate trading strategies. These trading strategies can be based on a single indicator such as a moving average crossover or multiple indicators. Bot trading is advertised as the dreamy solution to hands free trading, passive income and the ability to remove emotion from trading; however, there are a few downsides that aren’t commonly talked about. Here are some pros and cons of bot trading:
Consisten Execution of Strategies
Less Time Consuming
Susceptible to Errors/Mistakes
Lower Win Rate
Limited account size per bot
Bot trading can be super convenient for those with full time jobs or for traders looking for diversification, but the main attraction is leaving emotion out of trading. It’s worth mentioning that the majority of emotions come from not having a complete trading system that you can feel confident in. If this is you, I highly recommend learning to master the NewWave system which utilizes effective components that can’t be programmed into a bot, a huge advantage of manually trading with this system. I invite you to check out my FREE online training at tradethewave.com.
Manual trading is the personal act of buying and selling an asset for a profit. To be successful in manual trading, you must master and perfect a complete trading system.
Manual trading is a great skill to have not only for intraday trading, but also swing trading and long-term investing. It can be beneficial for managing positions to maximize gains and minimize losses since profits can be maximized by responding to current market conditions, whereas bot trading tries to fit a random and volatile market into a set formula and is not capable of responding to real time data like an individual can.
Bot trading might not be as profitable as manual trading depending on several different variables, but it has its benefits. Win rates can also be a deciding factor, as day trading can have exceptional win rates depending on your system and skills, whereas bot trading is typically much lower since it relies on indicators but could be more consistent until you start to master your skills as a trader. Here are some day trading pros and cons:
Day Trading Pros
Higher win rates
Day Trading Cons
More time consuming
Susceptible to mistake
In Summary, I’ve found it best to learn manual trading so that if you do decide to use a bot, you can understand the technicals behind your algorithms; otherwise, you are likely to cripple your account trying to bot trade. This also allows you to diversify between manual trading and bot trading, increasing your overall success. Many individuals getting introduced to trading try jumping right into bot trading, but the experience and understanding you gain from manual trading first is invaluable to your success as a bot trader thereafter.
Lastly, the ability to diversify between the two will open up a lot of opportunity, maximize profits, and minimize overall risk. As the saying goes, “Don’t put all your eggs in one basket,” and that certainly applies to trading bots.
Whether you are brand new or experienced you can get started learning the most effective and reliable trading system with NewWave Traders. Check out this free training on the system to get started by [CLICKING HERE]