Algorithmic trading refers to the use of computer programs to analyse market data and execute trades based on predefined rules, ensuring faster, more accurate, & efficient trading.
Manual trading involves analysing markets and executing trades based on personal decisions, offering flexibility but requiring time and being prone to emotional bias.
Algo trading is extremely fast due to automation, whereas manual trading is slower as it depends on human actions.
Execution Speed
Algo trading is based on predefined algorithms, whereas manual trading relies on human judgment and analysis.
Decision-Making
Algo trading is highly precise with minimal errors, whereas manual trading is prone to errors due to human limitations.
Accuracy:
Algo trading handles multiple trades simultaneously, whereas manual trading is limited to the trader’s capacity.
Efficiency
Algo trading offers fast, precise execution, handles high volumes, allows backtesting, minimises market impact, monitors markets 24/7, and supports strategy customisation.
Algo trading risks include tech failures, lack of human judgment, market manipulation, reduced profits, high costs, and flash crashes, increasing potential losses.
Manual trading offers flexibility, emotional control, market insight, adaptability, trade timing control, and reduced overtrading, enabling more personalised decisions.
Manual trading involves emotional bias, slow execution, human error, difficulty managing trades, limited market coverage, & high time commitment, reducing efficiency.