Automated vs. Manual Trading: Which is Right for You?

Trading has evolved from floor shouting to milliseconds-fast execution. Today, the debate between automated vs manual trading is more relevant than ever, especially for new traders exploring efficient ways to manage risk and grow their portfolios. Both approaches offer distinct advantages—and potential pitfalls. Understanding the difference can shape your strategy and long-term success.

This article explores the pros, cons, and key differences between the two trading methods, helping you decide which fits your goals, experience, and available time.

What Is Automated Trading?

Automated trading—also called algorithmic or bot trading—refers to the use of pre-programmed software to execute trades. These bots follow strict parameters such as technical indicators, price targets, or the trades of professional traders.

Popular strategies include selling weekly credit spreads to collect premium or running momentum-based equity trades. With services like Global AutoTrading and platforms such as ThinkOrSwim, even retail investors can automate trades with precision and speed.

For a deep dive into the tools and setups involved, explore our ultimate automated trading guide.

What Is Manual Trading?

Manual trading means making every decision and execution yourself. It’s the traditional method where traders analyze charts, news, and sentiment to enter and exit trades manually.

This approach allows for complete flexibility and adaptation, especially during volatile events or earnings announcements. However, it requires extensive screen time, self-discipline, and years of experience to master.

Many retail traders still find value in manual methods, especially when reacting to real-time market conditions. But as we explain in our article on common mistakes with auto trading, knowing when to apply discretion is just as critical.

Key Differences Between Automated and Manual Trading

• Speed: Automated trading executes in milliseconds, ideal for strategies that require instant action. Manual trading is inherently slower due to human involvement.
• Emotion: Bots follow logic. Manual traders often fall prey to fear, greed, and hesitation, which can skew results.
• Flexibility: Humans can interpret news and act accordingly. Bots can’t handle unexpected events unless programmed to do so.
• Risk Management: Both can manage risk, but automated platforms enforce rules consistently. Manual traders must be vigilant.

Ultimately, the choice comes down to your personality, experience, and how much time you can commit.

Advantages of Automated Trading

Automation has clear benefits, especially for beginners:

• Emotion-free execution: Bots follow logic, not feelings.
• Time-saving: Once set up, trades happen automatically.
• Backtesting: Tools like ThinkOrSwim’s On-Demand allow testing strategies on historical data before risking real money.
• 24/7 monitoring: Bots don’t sleep. They scan and trade continuously.
• Diversification: Run multiple strategies across different tickers with minimal effort.

For more insights into the advantages and limitations of using auto trading bots, be sure to read our dedicated guide for beginners.

Just be mindful of over-optimization and ensure your strategies are simple and robust for live markets.

Advantages of Manual Trading

Manual trading offers certain advantages automation can’t replicate:

• Control: Every aspect of trade timing and strategy is up to you.
• Adaptability: Respond to geopolitical risks, news, and earnings in real-time.
• Skill Development: Over time, you build experience, intuition, and analytical ability.
• Strategic Flexibility: Combine and defend trades as needed—something bots can’t improvise.

While this hands-on approach is rewarding, it can also be stressful and time-consuming. Manual trading works best for those with the time and temperament to monitor the market closely.

Challenges of Automated Trading

Automation isn’t foolproof. Here are some common drawbacks:

• Overfitting: Many bots work well on backtests but fail in live markets.
• Blind Spots: Bots can’t interpret events like unexpected Federal Reserve announcements or surprise earnings.
• Costs: Subscription fees, platform fees, and brokerage commissions can add up.
• Monitoring Required: Even automated systems need oversight. Setup alerts and notifications to avoid surprises.

It’s essential to keep strategies simple and only automate defined-risk trades, especially for beginners.

Challenges of Manual Trading

• Emotions: Fear, greed, and overconfidence can derail even good strategies.
• Execution Delays: Manual execution is slower, increasing slippage risk.
• Time Intensive: Watching the market for hours a day isn’t feasible for most.
• Scalability: You can’t run multiple strategies manually without becoming overwhelmed.

That’s why we recommend new traders start with automated setups that reduce human error and allow gradual learning.

Which Approach Suits You Best?

• Beginners: Start with automation. It removes emotional mistakes and teaches you structure.
• Experienced Traders: Use automation to scale. Focus on strategy development rather than execution.
• Day Traders: Manual trading allows adaptability, especially for high-volatility sessions.
• Swing Traders: Both approaches work, but the flexibility of manual trading can be beneficial.
• Investors: Long-term strategies like dollar-cost averaging are ideal for automation.

If you’re considering a shift from manual to automated setups, read our transition guide for new traders to make the move smoothly and avoid common mistakes.

Many traders combine both approaches. They automate repetitive strategies while manually intervening during critical market events.

Final Thoughts: Start Smart With the Right System

At Advanced AutoTrades, we believe trading should be systematic and focused on results—not emotions or gut feelings. Whether you lean towards automation or prefer manual execution, the key is to build a strategy that fits your life and goals.

Our trading signals are designed with defined-risk spreads, suitable for traders who want simplicity, consistency, and performance—without the guesswork.

Click here to start with our Monthly Trend bull put spread signals—perfect for beginners who want easy-to-follow trades that can be automated or manually placed.