Is Forex Copy Trading A Strategy For You?
Forex Copy Trading Platforms - Compare The Best Services 2022.
The rise of forex copy trading in the past decade is supported by the lightning speed of technology development and the growing influence of social media. Ten years ago, there were only a handful of copy trading platforms, today the number is growing like an avalanche.
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Copy Trading Platforms.
Forex copy trading has a lucrative potential and can result in significant profits. However, at the same time as with other financial operations, can lead to capital losses. Choosing which copy trading service to use is essential for your trading journey. At Acorn 2 Oak, you can avoid many hours of research and monitoring as we provide you with a bespoke comparison service. Our specialist team has done the hard part for you and has preselected a range of copy trading service providers with top features.
• Powerful software with a user-friendly interface.
• Number of world-leading traders to monitor and follow.
• First-rate customer service.
Copy trading provides great opportunities for those who don’t have the time or extensive knowledge in forex trading but wish to take advantage of the market potential. If you are this person, we are here to give a helping hand by connecting you with range brokers that offer high-quality copy trading so you can make an informed decision on which one suits best to your requirements.
To get access to top copy trading platforms, simply enter your details into our enquiry form and we will get back to you with up to 4 completely FREE quotes tailored to your requirements.
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Social Copy Trading Platforms.
Copy trading also known as a type of social trading allows traders, whether experienced or new, to participate in the financial markets.
Copy Trading – Trade Like The Pros.
Before you choose a reliable platform and an efficient trader, copy trading is a legal activity that can earn you money.
Forex Copy Trading.
Copy trading is one of the means by which a trader, novice or not, can make money in the financial markets of the world almost on autopilot.
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Is Forex Copy Trading A Strategy For You?
As long as you choose a reliable and effective platform, copy trading is a legal activity in which you can make money, provided you choose the right platform and determine your expectations for this service. It is also important to choose the person you are going to copy and make sure their trading strategy matches your expectations and risk profile.
_ How to take advantage of it?
We will tell you everything in this free copy trading guide.
One way for a trader, experienced or not, to generate income on the global financial markets on autopilot essentially, is through copy trading.
Beginners can use this strategy to use a platform to replicate transactions without having to research the market. It is popular in similar asset groups such as cryptocurrencies, equities, commodities, and futures.
The simplicity of placing a transaction without having to study the market is appealing to intermediate and expert traders. They can even decide to become signal providers, where others copy their trades. In other words, both parties involved in the transaction may benefit from it.
Is Copy Trading Easy?
Copying a trade, however, is more difficult than it first appears.
There are still some very important factors to take into account even though this strategy does away with the trouble of market research, such as technical and fundamental analysis.
This article will examine the various elements of copy trading that aspiring traders should be aware of when replicating forex trades.
The Definition and Operation of Copy Trading.
Copy trading is a strategy used by new traders and investors to get started in the Forex market with little expertise and experience. For some, it’s about investing in signal providers that know the system better than they do and having trading systems that have already proven themselves.
You must connect a portion of your portfolio to that of a specific trader to get started, then copy their buy and sell orders.
You have the option to spread out the risks involved in forex trading by choosing to follow more than one trader.
The ideal amount to risk on a single trader is 20% of your entire portfolio, and the ideal amount to risk on a single position is 1%.
Does Copy Trading Work in Forex?
The answer to the question "does forex copy trading work?" is "YES." It is a system that produces largely favourable outcomes. To ensure that you win more often than you lose, you must use caution when making transactions.
How Can I Copy Trade?
The question, "How can I copy a forex trade?" is one that many investors ask. A trader, (signal provider), shares his trades in real-time with other traders through copy trading.
Users can automatically copy trades from the signal provider in real-time by using the copy trading software. To protect investors, every platform provides a set of optional controls. For instance, traders can alter the capital at risk and the signals they copy.
By selecting the trader whose trading method they want to replicate, users can enable free copy trading on some websites or platforms.
For as long as you like, you can immediately copy a trader’s existing and future market positions. You should do the same if they buy a long position in a stock, index, or currency pair.
Likewise if it is a sell position. You benefit financially whenever it does well. On the other side, if the position loses, you will also lose money proportionate to the risk you are taking. Each copy trading platform has a different set of characteristics, as well as a different distribution of trades and risks.
To compare cutting edge copy trading providers with an easy-to-use interface, fill in your details in our enquiry form, and we will get back at you with up to 4 FREE quotes for you to assess and review GET QUOTES.
Forex Copy Trading Signals – Proportionate Transactions.
Positions are copied proportionally on some platforms.
Let’s imagine, for instance, that the amount in your account is $100,000, which is five times the amount in the account of the trader you follow ($20,000).
If he places an order for 1,000 EUR, a proportional transaction will be completed in your account.
As a result of your position being five times that of his, you will trade with 5,000 EUR, which is five times what he traded. You can, however, change the risk and the amount of the trading lots. Depending on the platform you choose, you can also specify the biggest loss you will accept.
Copy Trading: Is it Illegal to Copy Trades?
Is Copy Trading Legal?
In most countries, copy trading is considered legal as long as the broker providing the service is legally licenced and regulated.
Account opening processes allow you to verify that your transactions are legal in your place of residence when you invest in the financial markets through an authorised broker.
Brokers that offer copy transactions to their clients are governed by the FCA in the UK, for instance (Financial Conduct Authority). This is due to the fact that the activity does not constitute investment advice.
Since some individuals think that copy trading is neither more nor less than portfolio management, this choice has also sparked a lot of heated debate in several nations.
Due to their similarities to fund managers, proponents of this concept contend that "professional traders" ought to be given a management mandate. Copy trading traders will surely be better protected if this occurs.
Why Use this Type of Trading?
Copy trading is the best activity for you if you don’t want to engage in manual trading, which comes with all the challenges of market analysis.
This will enable you to continue working at your current job while still generating additional passive revenue. As a result, you must rely on a trader to handle your profits. This activity is not for you, though, if you don’t want to rely on a trader.
The Relationship Between Copy Trading and Social Trading.
Although social and copy trading share a common core, they differ greatly in many aspects. Copy trading is one type of social trading, which is a more general phrase. As a result, copy trading might be categorised as a form of social trading (this is where the confusion comes from).
You don’t allow someone else manage your trades automatically when you use social trading. The choice to open a position is ultimately yours, even though you use information from other traders and base your decisions on it.
Your portfolio and trades are much more in your control. However, since you also need to keep your emotions in check, this is a double-edged sword.
Copy trading, which connects your account to another trader’s account, is a fairly rigid kind of social trading. You may see their trades in your account. Their gains are also your gains, and conversely for their losses.
Is Copy Trading Automatic?
Positions are not opened at your discretion; the procedure is automated. You can modify them on some platforms, but on others, your only option is to stop replicating the trader.
All you have to do to start copy trading is click the "copy trader" button. All of their actions will then be mirrored to your account (including pending transactions). The benefit is that the system is automatic and handles everything, so you don’t need to do anything else.
You profit if the trader profits. You lose if he loses. It’s straightforward. The drawback is that your portfolio will suffer if you choose a substandard trader or a trader who is going through a rough patch, therefore you must understand how to evaluate your losses.
Where Can I Copy a Trade?
There are many places where you can copy trade. Many brokers offer platforms and there are many independent platforms also that use brokers as their trading partners.
Before you begin copy trading, you should research a number of fundamental requirements. The two most crucial factors are selecting the trader and the broker. You may duplicate the top traders for free on multiple reputable and reliable platforms. Create a trading account with the broker and start trading from there.
You should also take the time to examine the profitability metrics of the trader you want to follow. Although this step could take a while, it’s important. Additionally, it is recommended to diversify one’s portfolio by copying multiple traders, (5 or so), rather than just one.
Does it Cost Money to Copy Trade?
The amount required to begin copy trading is determined by the broker. You can start with $200 on a few of them, for instance. You can start increasing the budget based on how profitable it is. It’s best to never invest more than 20% of your capital with one trader, though.
Benefits and Drawbacks.
Benefits of Copy Trading.
Several reasons may lead someone interested in Forex to go into copy trading rather than trading on their own:
_ Watching experienced traders in action will help you learn.
_ You avoid conducting market analysis due to lack of time or resources.
_ Trading on a part-time rather than a full-time basis.
_ Simply collect your earnings and outsource the technical side to someone else.
_ It enables you to make money off the markets without having any real knowledge of them.
_ It enables you to trade without having to spend time to trading.
_ You can generally trade around-the-clock.
For some traders, copy trading is their gateway to gaining a thorough understanding of the Forex market and its workings. They begin manual trading as soon as they have the required information, abilities, and confidence.
It is suggested that you think of this as exercise. The main benefit is that you can make money as a side benefit while learning.
Drawbacks.
Is Copy Trading Safe?
When you replicate other people’s trades, you always run the same risks that you face when you actively trade forex for yourself. The main difference is that you don’t make the trading decisions; instead, the experienced traders you follow manage the risk and handle the majority of the management.
Having said that, managing your own risk proactively can help you become more profitable. For instance, you can easily spread your risks and lower them by diversifying your investing portfolio using Warren Buffett’s trading strategy. To reduce your risks, you can also employ the "Copy Stop Loss" strategy.
Your ability to choose the best trades and manage your risks will improve as you get more familiar with the principles and strategies of experienced traders.
_ You depend 100% on the performance of the trader you follow.
_ You are 100% dependent on technology.
_ You have no possibility of making discretionary choices.
What Factors Influence Copy Trading?
Here is a list of terms you should familiarise yourself with if you want to start this activity.
_ Autotrading platform : You can execute positions on your trading account without your involvement thanks to this technical solution. Trading signal providers, such as automatic robots like MetaTrader advisors, or other traders can provide signals for these trades.
_ Broker : A broker is an agency that arranges exchanges between a buyer and a seller and receives a commission when the transaction is executed. You need a brokerage account to copy trading signals from the traders you follow.
_ High Water Mark : This is a term used by account managers to calculate their performance fees. It guarantees that they will not be paid out unless the overall profit in the account reaches a new cap.
_ Pip : The exchange rate for most currency pairs is set to four decimal places, for example, 1.3105 EUR-USD.A change from 1 to the last decimal place is equivalent to one pip. That is, a move from 1.3105 to 1.3115 is a move of 10 pips.
_ Signal Provider : This is the name used to identify traders you can follow and copy on the ZuluTrade social network and trading platform.
_ Lot size (micro, mini and standard) : The lot size you choose affects the level of risk you take on the trade.
__ Micro lots are the smallest commercial size available. A micro lot corresponds to 1000 units of your account currency. For example, if your account is in euros, a small lot is worth €1000 of the base currency you want to trade. So, if you’re trading a euro-based pair like EUR-USD, a one-pip change in the currency equals a ten-cent change in your invested capital.
__ A mini lot corresponds to 10,000 units of your account currency. So a 1 pip move in a EUR-USD trade would be around $1.
__ A standard lot is a lot of 100,000 units. So, with a USD account, a 1 pip move in the EUR-USD price would represent a gain or loss of EUR 10 in your account. Please keep in mind that in forex trading, the market can easily move 100 pips in a day, and sometimes even in a minute, depending on current events. For example, if you trade standard lots, you can quickly lose $1,000 on a move of 100 pips. So adjust your lot size to your situation and what your account can handle.
_ Slippage : This is the difference between the price at which a trade was executed in your account and the price at which the trade was executed in the account of the trader you followed or copied on the social trading network. It can be positive (i.e. you got a better price) or negative (i.e. you got a lower price). Several factors affect slippage, including the time between trade execution and the broker’s spread (which may be different between your broker and theirs). Since the trader normally trades in the direction of a trend, most often the slippage will be negative as the price will move in the direction of his buy or sell.
Is it a Full-Time Activity or Just a Hobby?
You are probably wondering if you can make a living from copy trading. It all depends on the trader! For some people, this activity is just a hobby, just a stepping stone to manual trading. Others practice copy trading full-time because of the ease this activity offers.
Should we remember? Just click "Copy Trader" and let your chosen trader handle all the technical details of trading, such as technical or fundamental analysis, spreads, margins, or even financial instruments. However, ideally, you would use this activity to learn how to trade to eventually do manual trading.
The Best Times to Do This Activity.
It is recommended to do copy trading during the day. This stops the bleeding and limits possible losses as much as possible. But those who intend to make a living from copy trading are tempted to constantly follow traders to be on the lookout for the best deals.
It is also necessary to take into account the different opening and closing periods of the market.
Is Copy Trading a Good Investment?
Just like any investment, you can make or lose money by copy trading . The principle of copy trading is that you can evaluate each trader’s rate of return before choosing the signal provider you want to follow.
How Much Should I Invest in Copy Trading?
However, as the market says, "past performance is no indication of future results." Copy trading is risky and many traders lose money. Only invest what you are prepared to lose. Start with a small amount of capital and do your research thoroughly before committing to a strategy.
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What Type of Account for Copy Trading as a Beginner?
As a beginner, this activity can allow you to generate a monthly passive income without any special trading knowledge. Therefore, you will not have to give up your usual activities. We advise you to always use the broker’s demo account first to determine if it is right for you.
Risk Management.
The best way to manage copy trading risk is to copy multiple traders instead of just one. Additionally, you should limit the total amount of capital you place in a trader to 20%. Choosing a reliable and recognised platform is also a determining factor.
Is Copy Trading Profitable?
Whether you are a beginner trader or an experienced trader, it is important to understand that success rate is not the most important element in copy trading. In reality, you can be 20% successful in this business and be more profitable than someone who is 60% successful.
The key to success is money management; in other words, the distribution of gains and losses. Practically, it is necessary to ensure that winning positions bring in the most money possible and to limit losses from losing positions as much as possible.
What Should I Look For in Copy Trading?
The activity itself does not require training, but common sense and a more or less thorough analytical mind. All you have to do is choose the right broker and trader to copy.
Here are some search parameters we recommend:
_ Annual Return From 10 to 30%: If a trader drops below 10%, all investors will have a difficult month. But what you should be concerned about are the traders who have a 12-month return of 80%, 100%, and 200%+. These dangerous numbers are usually the result of an inexperienced investor using too much leverage and just being lucky. It will not be able to reproduce such profitability in the long term.
_ 1-Year Trading Experience: Don’t copy traders who don’t have at least a 1-year trading history. Otherwise, you won’t be able to determine whether they can achieve good long-term results.
_ Active Traders: Look for traders who make at least one trade per day.
_ Low Risk: Any trader you copy should have a sufficiently low-risk score. This is proof that he uses reasonable trading strategies.
What Should I Look For When Copying a Trade?
Although copy trading is automated, it is always useful to know if the strategy provider you are following is making good trades. You also need to know if his trading plan is solid, repeatable and profitable in the long run. What exactly does this mean?
Who is the Best Trader To Copy?
First, orders must be placed based on a proven trading plan or strategy. The best forex copy trade service traders have developed a plan over time and follow it even when a loss occurs because they know it works. The more time you spend watching a pro in action, the easier it will be for you to see their trading pattern. If it’s effective, so are the trades you’re copying.
Then orders must be placed based on reliable configurations. For example, a trade can be made due to the uptrend in the market and a two-front retracement from the moving average (MA). If the same price action occurs in the future, you will be able to take a new position.
Of course, you want a business that will generate profits for you overall. Not all trades are profitable, but if a large portion is, you are on the right track. Keep a record of all transactions and review them periodically to determine profitability. Be careful not to evaluate the results, but rather the reasons why the buy or sell order was placed and whether you can reproduce it.
Copy trading has gained a lot of popularity among traders in recent years. Still, selecting the right broker that offers a quality service can be quite troublesome. Here at Acorn 2 Oak, we present you with the opportunity to get access to leading copy trading forex brokers that offer state-of-art copy trading modes. The service is completely free and allows you to compare different quotes all in one place.
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Some Tips.
Here are some tips for success in copy trading.
_ Diversify Your Portfolio.
As mentioned before, spread your risk by following several good strategy/signal providers. If you can copy more profitable trades, you will be in a better position to grow your capital.
_ Reinvest Your Profits.
While it may be tempting to withdraw your winnings, you will benefit more if you invest them in larger trades. Of course, you may lose on a trade, but the cumulative effect of your profits will allow you to make huge profits. Don’t forget to set a stop loss to protect your capital.
_ Build Your Trading Confidence.
Copy trading allows you to carefully watch other traders and gain confidence in doing so. So you can switch from a demo account to a real money account. Once you have gained more knowledge and skills, you can move on to manual trading.
How to Become Good at Forex Copy Trading?
Becoming a copy trading expert is not directly dependent on your trading skills, but on the profitability of the trader or traders, you have chosen to follow. Of course, to become good at this, you need to master and apply to the letter the selection criteria we saw above.
Psychology for Success in Copy Trading.
Unlike manual trading, where the psychology of the trader is a determining factor, copy trading does not require special psychology. This is simply because you are not the one executing the trades, but a signal provider.
Copy trading allows you to get rid of the psychological aspect of online trading. Indeed, when you leave your portfolio management to a professional, you have less pressure on your shoulders and everything is automated.
Copy trading is a strategy that doesn’t require much thought or effort. You can invest in anything you want. You can start right away or take the time to observe other investors before you decide to follow their lead.
If a particular investor is not successful, you can always switch to another investor to follow. Best of all, it’s something you can do in your spare time. You can negotiate at your convenience, so you don’t have any psychological pressure.
Find the best forex copy trading platform.
The best forex copy trading platform is not necessarily the most profitable. You must adjust your risk parameters to the strategy that best suits your investment objectives. For example, a more conservative investor might choose a system where the average loss per trade is less than the average profit.
Conversely, a more aggressive investor may choose a strategy that exhibits greater volatility, which means a greater risk of loss.
Many modern Forex copy trading platforms contain hundreds or even thousands of signal providers. Therefore, it can be difficult for traders to decide who to follow.
So it is always important to do your research, start small, and never risk more than you are willing to lose. To choose the best copy trading platform, you need to consider three main factors: delivery time, copy trading traders and customer service.
_ Completion Time.
To copy a transaction, you always need a system that executes the copy commands as quickly as possible; ideally in less than 1 second. A difference of one pip is very large depending on your portfolio allocation. This is why your order should be validated at the best possible price and simultaneously (or close) with the trader whose strategy you are copying.
_ The Copy Trading Trader.
The platform should also give you all the details you need to choose a copy trading trader. Since making money with this technique is inherently dependent on the trader you are copying, the minimum expected from a platform is to provide as much information as possible regarding the financial statements of the traders to be copied. You need to be able to determine whether it is making consistent returns over the long term (at least one year) or not.
_ Customer Service.
Most importantly, the trading platform you choose should offer customer service at all levels, regardless of the size of your account. Ideally, customer service is available 24/7 to assist you and answer any concerns you may have.
How Much Does it Cost to Start Copy Trading?
Of course, whether you copy a trade or place one manually, you must pay the trading fees that each broker applies. However, the big question is whether you have to pay extra fees to copy a merchant. Well, it depends on the platform you are using.
For example, on many of them, there is no additional fee for copy trading. The trading platforms allow you to copy other traders of your choice so that the trades they open are automatically opened in your account with a proportional percentage of your allocated funds.
Commission comes from the spread on the buy or sell orders for the trades you place and the good news is that the spreads remain the same whether you copy someone or fill your trades manually. Best of all, if you are a successful trader, you can get paid to be copied by subscribing to popular investor programs.
On some platforms, such as cTrader, on the other hand, Copy Trading is paid. For example, you have to pay the management fees (at most 10% of the investor’s capital) set by the signal provider. In addition, you must also pay the performance fee, which is the percentage of the total net profit generated by a strategy on the trading account.
The commission must not exceed 50% of the profit made. You also have to pay a volume fee, which is the amount an investor pays for one million volumes copied. The maximum commission is $100.
Things to Consider Before Carrying Out This Trading Activity.
Below are three things to consider when it comes to this activity.
What is the Minimum Investment in Copy Trading?
_ Relatively High Minimum Deposit.
To copy some experienced traders, you will need an initial balance of several thousand dollars. There are even merchants who require their followers to have around $20,000.
This makes sense, as a floating position can drain your account before reaching your desired goal if the account balance is not adequate. However, some people are not given such an amount.
It is okay for those with a large amount of money to afford copy trading, but it is not advisable for those with a micro or mini account. On the other hand, using baby trading services can be very rewarding for those who have a lot of money and don’t want to spend time researching the financial market.
_ Past Performance Does Not Indicate Future Results.
We can never say it enough! If you follow some of the top professionals in a copy trading forum, you will see that their performance fluctuates considerably. There are usually some folders on the network where you can see the past and current performance of a person, but future results are quite different.
Someone who has had dramatic results may experience an extreme drop in performance within days. Someone who is in first place this week could be relegated to third place the following week and then fall into total obscurity within a month.
Copy trading will benefit those who do not have time to trade Forex themselves and those who do not particularly care to be confused by fundamental and technical analysis.
However, that doesn’t mean you can leave it to the professionals. They are experienced, but even professional athletes make mistakes from time to time. Therefore, you should frequently monitor your account and make any necessary adjustments.
_ The Emotions.
Some people are more comfortable making decisions for themselves than relying on unknown characters. It’s not fake. However, deciding on your own, means there will be traces of emotion. Emotions run high when you’re faced with choices that determine your fortune, and this feeling is the main culprit affecting many traders’ accounts.
By copying trades, copy trades crypto you might think that the decision to open or close a position will always be made without the influence of your emotions, no! Sometimes copycats indulge their emotions and close a position, but certain trend changes prove them wrong.
Conclusion.
Copy trading is the ideal starting point for a novice trader. It allows you to experience the successes and failures of others in real-time and learn directly from their mistakes. It is a good way to make money in the financial markets, but it is not without risk.
You have to be very careful in choosing the platform according to the degree of control you want to have over the transactions. You should also be careful about the trader you choose because, at the end of the day, you are handing over part of your portfolio to a complete stranger.
Although some traders make money from this activity, it should be remembered that copy trading may not be suitable for others. Think carefully before you start. Keep in mind that even if you don’t trade in person, copy trading crypto etoro that doesn’t mean the risk factors magically disappear. In other words, just because you’re following the advice of a professional and experienced trader doesn’t mean the advice is necessarily perfect.
What is Copy Trading in Crypto?
Another way to take advantage of professional forex traders trading for you is to sign up for a managed forex account. You can find out more on our dedicated page – www.acorn2oak-fx.com/managedforexaccounts.html.
Our main priority is to assist you with selecting the most suitable broker for your requirements that provides copy trading, saving you precious time and money. To take advantage of this FREE service and receive quotes from top ranking forex copy trading brokers that offer cutting edge copy trading, please fill the form above.
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