Manual Forex Signals
Once you’ve decided to use a live forex signals service, you’ll need to determine whether you’re interested in automated or manual forex signals. Both of these trading strategies have their benefits and drawbacks depending on your investment style and the amount of knowledge that you have, but ultimately, manual forex signals are likely the safest and most beneficial solution when implemented correctly.
Automated Forex Signals: What They Are and How They Work
The forex market never sleeps — but people do.
There is one goal of an automated forex signaling service: consistency. Automated forex signals reduce the emotion from the investor. Investors cannot manipulate the trades because they feel like they “know better” than the signaling service (or because they are afraid of losing money), and investors cannot miss trades because they are busy at work. It also avoids a latency issue: more profit is captured because the trade is put in immediately rather than in a few minutes or even hours when the potential trade has been noticed.
An automated FX account needs practically no intervention. The account itself is connected to forex trading signals, which implement themselves. The trader only needs to check on a regular basis to (theoretically) see the performance of their trade orders.
The automated account will ideally keep gaining profit and will only need to be fed funds as necessary; otherwise it will manage all of the investor’s activity for them. Many FX traders use “practice accounts” (accounts that follow the market but do not require an actual investment) in order to test out their automated services before, though obviously past performance cannot be expected to be any actual guarantee of future performance.
But… Automated Signals are not Human!
So all of this sounds great, right? But there’s a reason why robots aren’t manipulating the stock market and foreign exchange market today: they don’t do that good of a job. An automated service simply doesn’t have the knowledge or intuition of a person. There are times when a person may need to manipulate a trade or forego a trade because they know it is unwise, and otherwise they could lose their money. For instance, a technical trade could be entered based on a country that has, according to the news, just been hit by a typhoon. The investor simply has knowledge that the trading platform alone does not.
Additionally, there is no such thing as a perfect trading system.
An automated account can easily malfunction, potentially creating some major issues. An automated account could stop enacting trades, leaving trades to linger, or could crash entirely. It could even experience a bug and simply lose all the money in the account at once. Forex trading forums are filled with such disasters, though generally on practice accounts; they set their computer one day and then come back and the account has been emptied.
Manual Forex Signals: The Benefits of Going “Manual”
Manual forex signals need to be entered in specifically by the trader. The trader will receive signals — on their computer, on their phone, or through another device — and will then log into their account and put those trades in. The trader will need to be available at all times to complete these trades, and that can be taxing on any individual.
However, there are a few major benefits to manual forex signals.
Manual FX signals allow the trader an active hand in their financial future. The trader will learn as they go and will be able to stop trades or skip trades as necessary — eventually learning their own personal strategy (though doing this often is not recommended). The trader will also maintain complete control. They will know what is going on in their account and when, and they will be able to easily head off potential issues such as margin calls. They won’t need to worry about their account potentially acting erratically or losing all their money as they sleep.
The largest problem most traders have with manual forex signals is the compulsion to invest emotionally.
They may attempt to stop trades early because they are wary of the direction it’s taking, or avoid riskier trades even though they are essential to the signaling strategy. However, all strong investors need to be able to minimize their emotional investing. It is not enough to avoid it. Investors can train themselves to think more critically with manual forex signals.
Timing is another issue with manual signals; it can be difficult to initiate a trade that occurs in the middle of the night. Traders do generally take Sundays off, however, and most of them are able to manage with a signaling alert system, such as an alert that pops up on their phone. Though this may be stressful at times, the reward is in the profit. Not all trading systems need to be traded all the time, as well; some of them can only be traded consistently during certain hours of the day. For instance, a trader may decide that they only want to work from 8:00 AM to 2:00 PM. As long as they are consistent with this schedule, it may still work.
Manual Signals are the way to go!
Though automated forex signals may sound like a great idea to a beginning investor, there is a reason why advanced traders do not simply set up tons and tons of robot accounts. After all, if automated services worked, they would probably dominate the field of investment. Murphy’s Law states that anything that can go wrong will go wrong, and an automated investing service has an extraordinary amount of “can go wrong” possibilities.
Regardless of how well an automated service is monitored, it can eventually create an error that will cascade downwards, slowly (or quickly!) losing all the money in the FX trading account. Overall, manual forex signals are the much safer solution.