Copy trading is very popular among investors who lack experience in a particular market or don’t have enough time to trade. Below we will explain what it is, and how it works, provide a list of the best forex copy traders, share strategies and give advice on what to pay attention to when selecting them.
Basics of copying forex trades
Copy trading is a branch of social trading in which one investor’s positions are copied into another investor’s account when they are opened or closed. You have the opportunity to decide whether you prefer to work with copy trading manually or automatically. Before you delve into copy trading and invest any real capital, it is important to do your analysis of a specific position or market. Remember that even if you follow the methods of experienced copy traders, your capital is always at risk.
Copy trading works based on social networks and social trading systems. When forex copy traders open a position, they can transmit this information to another investor’s network, who can decide whether to open the same position or his automated trading systems can do so without confirmation from the investor. The most popular term in this sense may be copy trading, a method in which we directly copy the operations of another trader. But what is mirror trading and how is it different from the above?
Mirror Trading
The beginning of mirror trading dates back to 2000, long before copy trading. It involves copying, or rather “mirroring”, the strategy of another trader. It is hosted on the broker’s server and has the appropriate characteristics: profit goals, trading style, capital, risk tolerance level, etc. Each of these is reproduced directly in the user’s account, something similar to what automated systems do today or trading robots. The strategy is hosted on the broker’s server, and you select one of them to be automatically copied into your account.
Copy trading
In this case, copy forex traders connect their accounts to the server and choose which strategy to replicate on the account in signal provider format. That is, it is not automatic, but rather manually; copy traders choose what and when to replicate.
Social Trading
This is the same as any social network where traders exchange ideas and analyses with other users.
Leading forex brokers for copy trading and social trading
Best for minimum deposit: Icmarkets
IC Markets is the most appropriate broker for any person who wants a small minimum deposit. It is an optimal variant for novices as they can commence with little money. IC Markets has tight spreads making it a good option for short-term traders. The broker helps thriving clients navigate their way through numerous markets so that they can get the desired results from each specific scenario.
Best for MetaTrader users: Tmgm
TMGM is recommended for MetaTrader users as it can be easily integrated with MetaTrader 4 or MetaTrader 5. Its trading tools are advanced, its charts are robust, and the interface is designed for beginners and professionals who prefer the MetaTrader environment. Hence, the developers believe that this is one of the important features that makes it different from others.
Best for minimum deposit: RoboForex
Another best option for traders who want a low minimum deposit is RoboForex. It has different account types such as penny counters that are suitable for beginners who want to trade real money without risking too much. Also, when it comes to brokerages, this one steals the show – they offer a variety of different assets such as Forex pairs or commodities, combined with cryptocurrency trading at competitive rates and high-leverage accounts.
Best broker for copying trades: JustMarkets
JustMarkets has emerged as one of the best traders to copy with an all-inclusive copy-trading platform allowing traders to track and copy strategies implemented by profitable players. The broker gives detailed performance metrics, as well as leader boards making it possible for individuals to make decisions that are based on information available. Different types of accounts together with educational materials are available at JustMarkets for traders of various experience levels.
Best for working on multiple platforms: Forextime
Forextime (FXTM) is unique when it comes to supporting multiple platforms, which means traders can easily switch between devices such as desktop computers as well as mobile apps without any restrictions. It offers several trading tools, such as commentary from expert market analysts, to help traders make informed choices. Thus, FXTM is designed for any trader who is looking for convenience and flexibility in trading as it has an easy-to-use interface with customer support agents who are always prompt in resolving issues encountered by clients.
Advantages and disadvantages of copy trading
| Benefits of copy trading | Disadvantages of copy trading |
| Copy trading allows copy stock traders to diversify their portfolios into markets that they are not familiar with but want to enter.Through copy trading, traders can benefit from the experience of another investor or make the most of seasonal trends that you would not normally consider as a potential opportunity.With copy trading, it is possible to make the most of your time with the solutions of other investors with a proven track record. | Copy trading may offer little incentive for copy traders to do their research and gain insight into the markets.Copy trading does not eliminate risk, and investors may sometimes use copy trading panels to try to influence the market price for their financial gain. |
Criteria for choosing a broker for copying trades on the Forex market
User-friendly platform interface
You should choose a broker that uses a platform that is easy to understand and browse. This is important because it will make it easier for you, as a copy trader, to handle all the elements of copy trading. Important aspects that will make your trading experience enjoyable and simple include clear instructions on how everything is done, constant updates on everything that is happening in the market, and efficient replay in terms of trade execution.
Diversity of experienced traders
Opt for brokers that offer a broad selection of experienced and successful copy crypto traders to follow. The platform should provide comprehensive performance metrics, including historical performance, risk levels, and trading strategies. This diversity allows you to choose the best copy traders that align with your investment goals and risk tolerance.
Affordable minimum investments
In order to start copy trading without needing too much initial capital be on the lookout for brokers with low minimum investment requirements. Therefore, affordable entry points are provided hence making it possible for you to test and improve various copy trading strategies without having to incur much financial risk.
FAQs
The big risk in such cases is a possible unfavorable situation in the financial market, which can lead not only to the loss of investments but also to debt.
Copy trading allows you to diversify your portfolio into markets that you are not familiar with but want to enter by benefiting from the experience of another investor.
Copy trading allows beginners to have an advantage over professionals. No matter how successful it may be, traders who engage in copy trading must bear a certain level of risk.
