Bot trading and manual trading represent two primary approaches in modern investments. Both have unique benefits and drawbacks.
What are those benefits and drawbacks? This article briefly discusses each case. While both methods have their own advantages and disadvantages, traders must understand their fundamental differences to make informed decisions. This article delves into the key aspects of bot trading and manual trading, comparing their pros and cons to help traders determine the best approach.
Manual Trading: How It Works
The principal approach implemented by traders when addressing crypto markets is implementing diverse charting tools for technical analysis to make decisions.
Such a method involves drawing trend lines, identifying trends or ranges, plotting technical indicators, and finally opening a position through a specific order type, such as a limit order or market order.
Consequently, traders have to manage that position, which involves setting a stop-loss order and take-profit targets. Depending on the trading style, traders could close the position before it reaches the stop-loss or take-profit targets. Traders use technical indicators, fundamental analysis, and market news to determine their positions.
For example:
- Scalping demands quick decision-making and rapidly opening and closing.
- Day trading requires constant monitoring but positions can last several minutes, hours, and even a day.
- Swing positions last days and weeks, so traders can simply wait until the price triggers determined targets.
Bot Trading: How It Works
The rise of cryypto algorithms and automated systems has leveled up the game through sophisticated developments aimed to improve the performance and efficiency.
Complex strategies based on bot may require advanced knowledge about software development, hence coding skills. However, nowadays, multiple crypto platforms, such as Altrady, Bitsgap, and Wundertrading, offer traders already-made bots for them to seize the algorithmic approach benefits.
Among all the mentioned platforms, traders can find the following bots:
- DCA Bot: This bot helps traders achieve long-term accumulations goals by averaging the cost of an investment by recurrently buying a crypto asset at different prices.
- Grid Bot: This bot aims to capitalize on the price movements of crypto assets during sideways markets.
- Arbitrage Bot: This bot capitalizes the price discrepancies of a crypto asset across its quotation on different exchanges by selling and buying multiple contracts.
Although the bots offered by crypto platforms do not require coding skills, they still need specific settings based on the criteria of the strategies.
Benefits and Drawbacks
Bot Trading benefits:
- Help traders automate strategies, requiring minimal human intervention.
- Improve efficiency and performance by avoiding emotional mistakes.
Bot trading drawbacks:
- Bots development requires coding skills.
- Already-made bots still need to be set up according to strategy criteria.
Manual trading benefits:
- Complete control over the position performance, stop-loss and take-profit targets.
- Adaptability to current market conditions.
Manual trading drawbacks:
- Scalping and day trading styles are highly demanding and require constant monitoring, which can be exhausting for manual traders.
- Manual traders could see themselves forced to make emotional decisions, incurring human mistakes.
Which One is Better?
The choice between bot trading and manual trading depends on individual goals, experience, and resources.
- For beginners, manual trading might be a better starting point as it helps in understanding market mechanics.
- For experienced traders, bot trading can enhance efficiency, particularly when dealing with high-frequency or arbitrage .
- For investors who value control and adaptability, manual is preferable as it allows for strategic adjustments based on real-time analysis.
- For those looking for passive trading, bot trading is ideal as it minimizes active involvement and emotional decision-making.
Conclusion
Manual trading and bot trading are today’s standard methods for approaching crypto markets. The former gives traders complete control of the performance but can make them find a barrier to efficiency. The latter improves efficiency via automation but may require advanced knowledge for proper implementation.
With Altrady, traders and investors can use multiple automated systems to build balanced crypto portfolios while seizing indicators and quantitative bots. Sign up for a free trial account today. Many successful traders use a combination of both methods to maximize their efficiency and profitability. Ultimately, whether one chooses bot trading or manual, the key to success lies in proper strategy, risk management, and continuous learning.
