AI Trading Vs. Copy Trading: Which is Better for Successful Forex Trading?

What is AI Trading？ 

AI trading is implementing Artificial Intelligence (AI) to analyze, predict and automatically execute trades on one or more currency pairs using pre-set rules for entering and exiting. Using automated trading systems (ATS) is more efficient in detecting the ideal entry and exit points based on price movements with less human intervention and taking emotion out of the equation. Based on predefined price algorithms, artificial intelligence bots search the market for the best trading opportunities, making AI trading more efficient, safe, and a simple way to trade in the forex market. 

What are the Benefits of AI Trading？ 

In order to be a successful forex trader, one should observe different market trends, understand all the factors that may affect the prices, and follow both long and short-term price movements based on technical and fundamental factors. This is not an easy task for many investors. Some traders choose to educate themselves about market cycles and price movements, while others prefer to use AI trading to make better trading decisions. Using artificial intelligence (AI) in trading enforces discipline, as every trade will be executed according to a pre-defined methodology. 

• Stress-free Trading: When you trade manually, your trading decisions can be easily dominated by your emotions; greed or fear. Using an AI trading system will enable you to follow your trading rules without hesitation and avoid emotional trading. 

• Saving Time and Money: By automating your trades, you wont have to spend long hours monitoring price charts, applying your trading strategies or placing orders. All you have to do is set up the AI system on your trading platform.  

• Better Trading Performance: AI trading systems help you meet your trading objectives; as your decisions are based on formulas developed by experts and experienced traders. They are algorithmic, so they behave according to the inputs programmed into them and developed by testing the historical data. 

What is Copy Trading？ 

Copy trading best suits traders who dont have time to keep up with the market or still lack the experience to trade on their own. It is preferably used in short-term trading like day tradingand swing trading. 

However, like any trading approach a trader decides to employ, its advised to check the trading record before deciding to risk real capital. Remember that even by following the strategies of an experienced trader, your capital can still be at risk.

What are the Benefits of Copy Trading？ 

Studies show that people who carefully choose their traders based on statistics and portfolios are up to 10% more successful than people who trade manually or choose their traders based on personal preferences.

Copy-trading offers multiple trading benefits which can allow traders to explore a variety of investment goals with lower risks. Investors are usually keen to discover opportunities while they have limited access to advanced technical analysis or they might be at the beginning of their trading career. Therefore, copy trading can expand the opportunities and secure the risks to the minimum level. 

• Learning from Top Traders: Copy trading is highly effective to explore the market and monitor the professionals as they open their positions and apply strategies. Following top professional traders can help in gaining experience with minimized risks.

• Exploring New Trading Strategies: Applying copy trading gets traders exposed to new trading techniques, ideas, and strategies followed by successful traders, of which they may never heard of anywhere. 

• No Need to be a Forex Expert: That is a huge feature making it suitable for forex beginners. The follower traders are not required to demonstrate technical or fundamental analysis to enter the market since the money manager is the one who is in control of the trading strategy and setting the take profit levels. Ideally, analysis skills are required in order to have a better understanding of your investment value and risks, however, it is not required to master the analysis or to be an expert to copy other professionals.

• Diversifying Trading Portfolio: One way to further diversify your portfolio is by copying various traders using different financial instruments. It also helps traders to explore different trading strategies. If you use copy trading, you may consider copying multiple investors. Copy-trading can be easily applied to forex, cryptocurrencies, stocks, and other volatile markets. It is never limited to specific markets or trading instruments. 

AI Trading Vs. Copy Trading: Which is Better for Successful Forex Trading？

Some traders, usually beginners, think that applying AI trading or copying the best traders offers risk-free trading. However, like any trading tool, AI and copy trading have their cons as well. These approaches are still exposed to aggressive market fluctuations, but they can guide you on how to go with the flow.

Before you choose the ideal approach, you have to set your trading strategy and clarify your goals. Make sure to pick a tested system or a successful money manager with proven trading history. But most importantly, never abide by your risk management rules. Choose the trading approach that matches your risk tolerance, trading horizon, and investment objectives.