This article is for those who are about to start Forex, or those who are doing Forex but are interested in either discretion or FX automated trading tools. Which one can win? I think there are a lot of things to worry about, such as which one will be the total plus and whether even beginners can win. In the past, it was only discretionary trading by the human eye, but in the last 10 years, automatic trading tools have appeared in the world, and the number of people using it is increasing. So I will explain how much I can earn today because I have experience with both automated trading tools and discretion.
Forex discretionary trading
It is an FX trading method from the beginning. It is a method of buying and selling while keeping an eye on how you can enter at superior points with a trading method that makes use of the trader’s experience and technique. This method takes time to win, but if you can win, it is possible to earn 100% or more per month. The advantages and disadvantages are summarized below.
Merit ・ Because you enter while visually grasping the points with superiority, monthly profit of 100% or more is possible if you can get a large price range. ・ Experience and skill are required, but if you can win, you can accumulate stable profits. ・ If the fund management method is solid, the funds will not suddenly become zero.
Demerit ・ It will take at least half a year to a year to win. ・ Because of the trader's emotions, he may become scared and cut his position on the way. ・ Because it is a de facto labor, it is necessary to follow the chart at a glance until entry.
In Forex companies, OCO order (OCO order is an abbreviation of “One Cancels the Other”, it is an ordering method in which two orders are placed at the same time, and when one order is filled, the other is automatically canceled. You can set the profit taking point when you go forward and the loss cut point when you go backward at the same time.) So you can leave it after entry. However, it takes a certain period of study to be able to win.
Forex automated trading
Forex automated trading is an automated trading tool that has emerged in recent years. The programmed software is a method of making an entry for the first time at a certain point, and when it goes backwards, it makes more and more entries and holds the position until it becomes an unrealized profit. This tool has some logic, and even beginners can continue to win today if the chart fits that logic, but there is also the risk of losing all your money if you catch on one big trend and keep going backwards. There are various operations and logics for automatic trading.
- Ordering tool: A tool that makes entries according to the direction when the chart is moving in the direction of selling or buying.
- Contrarian tool: A tool to enter in the opposite direction when the chart is moving in the direction of sell or buy
- Discretion x Automatic Trading Tool: Normally, the automatic trading tool is used for automatic trading, but the manager trader of the automatic trading tool can stop the automatic trading when it is a stop-loss insurance, profit taking, or even a big economic indicator.
The advantages and disadvantages are summarized below.
Merit ・ Even beginners can win immediately. ・ Unlike discretionary trading, there is no need to stick to the chart. Therefore, it becomes unearned income. ・ No experience or knowledge required. ・ Human emotions do not enter.
Demerit ・ If you get caught up in one big trend, a large amount of positions will be accumulated, and the unrealized loss will increase and you will go bankrupt. ・ Monthly interest is overwhelmingly lower than discretion because we do not find and enter superior points. ・ Because the monthly interest is low, it is necessary to have a large amount of principal.
In the case of automatic Forex trading, you will have unearned income, so you can work during that time. However, if you are swallowed by a big retrograde vortex, you are destined to lose all your principal. Another weakness is that the monthly profit is low. The profit margin is low for the large amount of principal required, ranging from 5% to 10% at most. If you can get more monthly profit, the bankruptcy rate will increase steadily because it is a tool that makes a fairly gambling trading. Also, for Forex automated trading tools, you must carefully choose your currency pair. Currency pairs that are prone to trends, such as GBP, will quickly collapse. However, if you have a minor currency pair with too little price movement, you will not be able to make a profit. Therefore, the USD / JPY and EUR / USD are relatively safe, although the price will fluctuate moderately, but extreme trends are unlikely to occur. However, the risk of bankruptcy is still high.
Based on the above, I compared discretionary trading and Forex automated trading tools and summarized them in a table.
|item||Discretionary trading||Automated trading tool|
If you cut the loss sequentially by yourself, it will not go bankrupt.
If you go backwards in one big trend, you lose all your money.
|Monthly interest||Depends on the trader and market price|
If you can win, you can get 100% and 200% monthly profit.
|About 5% ~|
As the monthly interest rate rises, the bankruptcy rate rises.
A training period is required.
Even beginners can win immediately.
You need to look at the chart to find the entry point.
De facto unearned income.
Automated trading tools are very low difficulty, but high risk and low return. Discretionary trading has high hurdles until you win, but it is also possible to make low risk and high return. Personally, I do not recommend the Forex automated trading tool. This is because discretionary trading has a higher profit margin. If you still use the automated trading tool, there are some companies that offer the service of discretion x FX automated trading tool, so it is better to try it.