With the advancements in the trading world, most of the stock and social forex trading platforms these days are offering copy trading services. It is also named as auto trading, mirror trading, and social trading as well.
The copy trading technique has gained popularity in the market because it helps beginners learn the strategies of trading and at the same time, allows them to make some money in the competitive forex market.
Usually, how the copy trading process works is dependent upon the type of trading software. However, the basic principle is always the same; you keep on copying another trader.
Note that most of the copy trading platforms allow traders to copy trades on a percentage basis; almost 20% of the other trader you are following.
Forex copy trading practices are perfect for beginners, but before you enter this platform, it is better to collect more knowledge about it.
What is Copy Trading?
The concept of copy trading is pretty simple. As the name indicates, the idea of copy trading is all about directly copying the position of another trader that you feel is trustworthy and reliable in the market.
When you follow this trader or traders, your portfolio automatically gets attached to their portfolio, and whatever actions they take, it is instantly applied to your profile as well.
With this, you can copy all their market positions and of course, all the actions in the trading world. It means, when they open a trade, your profile also opens a trade; as they close, yours also get closed.
Furthermore, as they win, you win too and make a considerable profit; but as they lose, you are also going to lose. Hence, it is crucial to be careful when deciding whom you are going to follow for forex copy trading.
How Copy Trading Works?
There are numbers of trading platforms that keep on displaying the trade histories of the traders, and beginners can follow those patterns for reference.
There are generally two options to choose in the forex trading world: Either you can Follow the trader or Copy. In case you decide to follow a trader, you will receive time to time updates about all the actions the trader performs in the market.
However, in case you go ahead with the copy option, the trades executed by that particular trader will be automatically copied to your profile. The trades are opened and closed instantaneously on your account, and accordingly, the conditions of win and loss are also the same for you and the trader you have chosen to copy.
The moment you start with a copy trading platform, the interface of that platform gives you the option to choose whether you want to copy all existing open trades of the trader or only particular ones. And at this point, it is essential to make a deliberate decision. Experts say that one should not copy any trade without going through the histories and stats.
The copy trading software generally allows you to copy a certain percentage of the trades; this option is beneficial for beginners, especially at the time of losses.
Why Should You Consider Forex Copy Trading?
Well, some of you might be confused about whether you should start with copy trading or not. Don’t worry! Here we have highlighted a few reasons to start doing copy trading; if they meet your trading style, you should unquestionably enter this platform.
It can save much of your time:
Those who have already tried both; manual as well as copy trading platforms reveal that manual trading takes much time. The scenario is not like TV advertisements where they can instantly convince you to make profits through trading within a few minutes. Instead, the manual procedures demand loads of analysis. You need to learn strategy, study numbers of charts, and digest daily economic news as well. In this situation, beginners are advised to get started with copy trading, which can save much of your time.
It enhances your learning:
Experts say that the most effective way to learn to trade is to start doing it practically. But with this, beginners are always worried about losing money. Copy-trading can help them to trade with more confidence while learning various concepts with routine experience. It is the best way to feed your inquisitiveness about the trades and learn in-depth concepts about the growing financial markets.
You can explore the entire market:
Forex trading world allows traders to invest in several commodities, but in most cases, not all traders are experts in handling all types of markets. The copy traders are lucky enough to copy trade from different markets and learn what is happening on the global level. Within very less time, you will also be able to clear your mindset about which market appeals to you the best.
Best way to start:
Experts consider copy trading as the best choice to get started without putting much stress on your mind. You have an expert in the market; he is making all the trades; you need to analyze what he is doing and learn to make strategies like a pro. Copy-trading reduces the risk in the market while helping you make some profits.
The 3 Best Copy Trading Platforms:
The market is loaded with a variety of copy trading platforms. If you are a beginner and are finding it difficult to choose the best one, it is better to go through the review below. Here we have listed essential details about three best copy trading platforms:
In the vast universe of copy trading, eToro has marked its presence with its high-quality features. It is currently serving more than 3 million users over 200 different countries and has a substantial satisfied trader’s base in the market.
It shows updates like social media websites; so that every investor can stay up to date. It is a broker and a social trading platform as well where copy traders can quickly get started by following a few necessary steps.
The best thing to know about this platform is that it offers a low-risk environment for beginners.
Advantages of using eToro:
- eToro is a feature productive market maker software tool.
- The region wise maximum deposit range varies from $200 to $10,000.
- It offers a web trader along with a mobile app that works perfectly on Android and iOS platforms.
- Simple design, credible solutions, and helpful stats make it the best choice for beginners.
Darwinex is another innovative platform that beginners can use for copy trading. The basic concept of Darwinex is almost the same; copy traders make benefits by utilizing the performance of other experienced traders in the market.
But as compared to most other software tools, Darwinex works in a slightly different manner. Instead of copying the trade, users are allowed to buy synthetic assets that are termed as Darwins; with this, all the losses and gains of the trader are monitored on the price of those Darwins only.
Advantages of using Darwinex:
- It is a popular STP type software that allows beginners to learn trading fast.
- The minimum deposit range, in this case, is somewhere around $500.
- This tool works perfectly on multiple platforms, including Android, iOS, Linux, Windows, and Mac systems as well.
- Innovative features that can enhance your trading experience with ease.
This software tool is serving traders from the long past with its amazing investment plans. ZuluTrade was launched in the year 2007, and today it connects more than 100,000 traders from more than 192 countries.
Experts say that this platform is more suitable for copy trading due to its advanced features and beginner-friendly interface. There are better options for money management and risk handling, as well. Moreover, it allows traders to customize signal replication with ease.
Advantages of ZuluTrade:
- This tool is suitable for social trading and copy trading, as well.
- Leverage and deposit range, in this case, usually depends upon the type of broker.
- ZuluTrade works perfectly on the web platform and various devices, including iPad, iPhone, and Android, as well.
- Better options for customizing money management and risk levels as well.
Hopefully, the above information helped you to learn the basics of copy trading. Now, you must be excited to get started with this trading; however, to make profits in the Forex world, first of all, you need to choose the right trading platform. It may be a complicated task for beginners, but don’t worry; follow expert guidelines to pick the most reliable tool. The three listed above have gained popularity in the market; you can get started with any of these to learn the strategies for copy trading.
Experts always advise being careful while following a copy trading mechanism. It is not about copying everything that other traders do in the market; instead, you have to develop a potential strategy with continuous learning. Soon it can help you make profits with trading.