Currently there a few methods to trade Forex such as the classic discretionary trading where all trades are manually placed by a trader. But more recently we have seen the surge of popularity for robot trading and signals/ social trading. But can you trust these methods or should you stick to the classic methods? The world of finance is currently shifting over to automation for everything from hedging, execution algorithms, risk systems and so on but these are not the same as the simple EAs built for retail traders. The EAs built for platforms such as MT4 will have a few rigid rules on when it should place a trade and when it should close the trade but it does not actively analyze the market and react to news and other traders like some of the more professional HFT traders use.
Signals are a new entry into the forex market where you can follow trading being done on other trader’s platforms, this could be in the form of an EA or a manual trading. This is where you will receive a signal instructing you platform to buy or sell a certain instrument so you copy all trades placed on another account. This seems to be more of a cheap way to find a money manager who will have all the past performance of his trading history available for viewing. Should you trust a signal provided by someone you do not know who maybe on the other side of the world?
Overall I believe that Signals can be a better way of copy trading than EAs as signals are not all automated system and you can find some very god traders. The main issue is the stability of them and any connections lost could wipe out all profits if not the account. Due to this I will always prefer manual trading on the retail level as the EA that are available or you can develop yourself are extremely basic when compared to what professional are currently using, incorporating AI into trading robots.