How To Do Manual Trading: Ultimate Guide For New Traders

How To Do Manual Trading: Ultimate Guide For New Traders

What’s up Traders, in this article, we’re going to be talking about Manual Trading. The manual trading refers to when a trader decides when to buy or sell an asset and then executes the trade using market or pending orders. 

Before deciding to act, a manual trader may check different markets to see whether an opportunity exists. In essence, the trader does the majority of the labour, therefore their outcome is only as good as their input.

An intraday Forex trader, for example, would spend the morning scouring a list of different currency pairs for combinations of technical trading events using indicators and other sorts of analysis. 

The trader can then decide whether to purchase or sell by putting his or her own order. 

Some traders prefer to control their own trades by shifting stop loss and take profit levels as the market moves. In manual trading, the trader is responsible for all decisions and actions.


What is Manual Trading and How does it work?


  • Manual Trading: An overview
  • Trading: Manual vs. Automated
  • Strategies of Manual Trading 
  • Example of Manual Trading

Manual trading is a method of initiating and ending deals that involves human decision-making.

Automated trading, on the other hand, uses computer programmes to initiate transactions based on algorithmic or human-instructed criteria.

Rather of relying on computers and algorithms, manual trading entails human decision-making for entering and leaving deals.

Manual traders are frequently aided in their trading decisions by programmes and technology.

Both manual and automated trading have advantages and disadvantages, and it is up to the individual to decide which method is best for them.


Manual Trading: An overview

Computer programmes are frequently used by manual traders to consolidate data. 

They may also use automatic indicators to alert them to prospective trading opportunities in some circumstances. When manual trading, however, human input is always necessary to authorise trades.

The question of whether or not automated trading is advisable is still being debated. 

Some traders argue that manual trading is superior because market movements and risk management require human judgement. 

They believe that automation should be used to monitor data and consolidate it for human analysis.

Automated trading proponents say that this strategy is superior because it eliminates illogical human behaviour. 

Manual trading is often based on emotion, whereas automated trading is based on rules and statistics. 

However, a manual trader’s approach can be based on strong reasoning, data, and discipline, which isn’t always the case.


Trading: Manual vs. Automated

Traders can use automated trading systems, also known as mechanical trading systems, algorithmic trading, automated trading, or system trading, to create particular rules for trade inputs and exits that can then be implemented automatically by a computer.

Human mistake can still occur in automated systems since they are developed by humans, but the faults occur in the programming code rather than in the execution of the code.

Although automated trading minimises the frequency of errors, such as fat finger blunders, which are more common in human trading, programming and implementation problems still occur.

If machines are better at distributing capital than people, only time will tell. In the meantime, many investors prefer to have a human physically execute their buy and sell orders.

Flash crashes serve as a stinging reminder that entrusting investment choices to computers has hazards. The flash crash of May 2010 is the most visible example.

Popular indexes such as the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all dropped 5-6 percent in a matter of minutes before immediately rebounding.

Before prices reverted to normal, trades for certain individual stocks executed for a cent or less, while others traded for $100,000 or more.

Traders and regulators alike accused computer-automated trading systems set up to execute rapid-fire buy and sell orders in the aftermath of this incident. 

Investors and money managers haven’t forgotten about the market-destabilizing potential of computer-driven investment strategies since then.


Strategies of Manual Trading 

A manual trading strategy is one that involves a human setting buy and sell orders. 

Buy-and-hold trading is one of the most common trading strategies. This occurs when an investor purchases investments with the expectation of long-term growth.

Because deals are rare, they are frequently carried out manually when the opportunity arises. 

The investor may sell at a set price or when a technical or fundamental indication shifts, signalling that it is time to exit.

Swing trading involves placing deals that run from a few days to a few months and can be done manually or automatically.

During a trend or price range, the overall goal is to capture the majority of a predicted price move, then exit and move on to the next chance.

Day trading can be done manually or automatically, and it entails making many trades each day to profit from intraday price fluctuations.


If you are looking to find a suitable forex broker, be sure to read the following guides:

10 Best Forex Brokers That Give The Most Value To Traders

9 Best Forex Brokers That Are Recommended For Day Trading

9 Best Forex Brokers That Are Recommended For Scalping

My reviews about the best forex brokers in the world that offer the most value and facilities to traders.

Read About:

IRONFX Review                                      BLACKBULL MARKETS Review
XM Review                                               PUPRIME Review
INSTAFOREX Review                             TRADEVIEW MARKETS Review
VANTAGE Review                                   SUPERFOREX Review
INFINOX Review                                    AVATRADE Review


Example of Manual Trading

Jim works as a trend follower. He searches for entry points into highly trending stocks around the 100-day moving average (MA), and subsequently exits using the same MA. 

Because there is some subjectivity involved when he enters a transaction, manual trading is required. Subjectivity does not transition well into a computerised system.

Jim, for example, enjoys seeing a rising stock briefly fall below the 100-day MA before rising back above, triggering his long trade. He exits the trade when the price falls below the 100-day moving average.

Also, the price cannot be moving sideways. It should be on the rise. This helps to avoid whipsaw events, which occur when the price travels sideways and back and forth over the MA.

Netflix (NFLX) was on the rise in 2017. It temporarily fell below the 100-day moving average, creating some gap below the line, before rising over it. 

Jim purchased. Jim sold near the end of the year when the price fell below the 100-day moving average.

Soon after he sold, the stock found support at the 100-day moving average and began to increase. Jim made another purchase. 

This trade lasted for the majority of the year, until the price fell below the 100-day moving average once more. Jim gave up his job.

Jim went long once the price, which was still in an uptrend, passed back above the MA. 

He had to sell a few days later when the stock of Netflix continued to fall. The uptrend had been called into question, and the price was whipsawing the MA.

Jim prefers to avoid situations like these, therefore he chose not to trade any of the crossings that occurred in the rest of 2018 and 2019. 

Subjective decision-making is extremely difficult to programme into a computer. As a result, Jim prefers to execute all of his deals personally.


About Manual Trader


  • What does it mean to Trade Manually?
  • A Manual Trader’s process
  • The Benefits and Drawbacks of a Manual Trader
  • A Manual Trader as an example


What does it mean to Trade Manually?

A manual trader enters deals into a trading system without using automatic order entry algorithms.

A manual trader is someone who manually enters orders and trades. Manual traders trade without the aid of computers or algorithms.

Manual traders may be at a disadvantage in the fast-paced world of trading when compared to traders who use significant processing power to exploit market pricing anomalies.

In addition, manual traders may be more prone to trading on emotion than traders who rely solely on a trading computer.


A Manual Trader’s process

A manual trader does not rely on computerised signals to make buy and sell decisions. 

They also manually enter transactions into a trading system, which raises the possibility of improper or erroneous order entry.

If the error is large, such blunders might have disastrous repercussions. As a result, currency traders are increasingly turning to automated trading systems that allow them to efficiently place orders and execute trades using an application programming interface (API).

A manual trader must rely on their own talents to keep discipline and execute trades according to strategy. 

Such a trader must be diligent in their transaction monitoring to avoid basic errors like purchasing when they meant to sell and ensuring that deals are conducted using the correct order types, at the correct prices, and in the correct volumes.

Meanwhile, programme traders delegate their tasks to automated systems that use algorithms and computing capacity to execute flawless trades. 

Algorithms can also process a lot more data in a fraction of the time it takes a human to do so, which is useful for spotting anomalies or mispricings that can be profitably exploited.


The Benefits and Drawbacks of a Manual Trader

Behavioral biases can lead manual traders to make irrational decisions and trade based on emotions such as greed or fear. 

A stock may increase over the manual trader’s sell objective if it is surging after a solid earnings release, for example.

After a few successful hands, the trader, like a blackjack player, may decide to let the stock run in the hopes of making even more money. 

However, if the stock rapidly reverses, the trader may lose not just any further earnings, but also a percentage of their initial investment.

Manual traders, on the other hand, might profit from market indications that an algorithm would miss, such as dropping volume or wider-than-normal bid/ask spreads in a particular security.

A manual trader, on the other hand, can be more nimble and react to breaking news of a merger, an inquiry into a company, news about a competitor, or a natural disaster than an algorithmic trader.


A Manual Trader as an example

Jane is interested in trading ABC stock. She chooses to short ABC when the stock reaches $60 a share. The stock is currently trading at $52.

She waits a few days to check how the stock is going because she is a manual trader. 

She places a limit order to sell ABC shares GTC (good ’til cancelled) after a week or so. She will be notified when or if the trade is completed, and she will then determine what to do next.

Jane competes with others in the market who utilise powerful algorithms to make rapid purchase and sell decisions. 

These algorithms can also detect market moves that Jane cannot see with her naked eye. When compared to Jane, automated traders have a tremendous information advantage and better execution.


If you are looking to find a suitable forex broker, be sure to read the following guides:

10 Best Forex Brokers That Give The Most Value To Traders

9 Best Forex Brokers That Are Recommended For Day Trading

9 Best Forex Brokers That Are Recommended For Scalping

My reviews about the best forex brokers in the world that offer the most value and facilities to traders.

Read About:

IRONFX Review                                      BLACKBULL MARKETS Review
XM Review                                               PUPRIME Review
INSTAFOREX Review                             TRADEVIEW MARKETS Review
VANTAGE Review                                   SUPERFOREX Review
INFINOX Review                                    AVATRADE Review


Final words

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