As long as you choose a reliable platform and an effective trading tool, copy trading is a legal activity that can make you money, provided you pick the right platform and are clear about what you expect from the service. You also need to choose carefully the person you are going to copy and make sure their trading strategy fits your expectations and your risk profile.
What is copy trading? How can you profit from it? Which brokers offer it? We cover it all in this copy trading guide: Trade Like the Pros!
Copy trading or mirror trading is one of the ways a trader, whether a beginner or not, can make money on the world’s financial markets almost on autopilot. With this technique, beginners can use a platform to copy trades without having to study the market.
Intermediate and experienced traders can benefit from how easily trades are executed without having to watch the market. They can also choose to become signal providers and have their own trades copied. In other words, both parties involved in mirror trading can profit from it in one way or another.
However, copying a trade is not as simple as it looks. Although this method removes the hassle of market research such as technical analysis and fundamental analysis, there are still some very important parameters to take into account. In this article, we look at the different aspects of mirror trading that aspiring traders need to know and how to use them wisely.
Copy Trading: Definition and How It Works
Copy trading is a technique that novice traders and investors use to get started on the Forex market with minimal knowledge and experience. For some, it means investing in signal providers and trading strategies that have already proven themselves and understand the system better than they do. To get started, you link part of your portfolio to that of a specific trader and replicate their buy or sell orders.
You can choose to follow more than one trader, spreading a percentage of your portfolio, and the risks that come with Forex trading, across them. Ideally, you should not risk more than 20% of your total portfolio on a single trader and no more than 1% per position.
If you are wondering whether mirror trading works, the answer is YES: it is a system that produces fairly positive results. However, you will need to be smart about which trades you replicate to make sure you win more than you lose.
How Does This Type of Trading Work?
With copy trading, a trader (the signal provider) shares their trades in real time with other traders (the copiers). Using copy trading software, users can automatically copy the signal provider’s transactions in real time. Every copy trading platform offers optional controls to protect investors. For example, traders can customize the amount of capital they put at risk and which signals to copy.
Some sites and platforms include a feature that lets users enable free copy trading by choosing the trader whose strategy they want to copy. Copying a trader therefore means directly replicating the current and future positions they take in the market for as long as you wish. If they open a buy position on a currency pair, an index or a stock, you do the same.
The same goes for a sell position. When they make a profit, you make a profit too. If the position loses, however, you also lose part of your capital in proportion to what you put at risk. Settings, as well as how trades and risk are allocated, differ from one mirror trading platform to another.
How It Works on a Trading Platform
On some platforms, positions are replicated proportionally. Suppose, for example, that your account balance is €100,000, five times the balance of the trader you are copying (€20,000). If they place an order and make €1,000, a proportional trade will be opened on your account.
Your position will be five times larger than theirs, so you will make five times what they made, i.e. €5,000. You can, however, adjust the risk and the lot size you trade. Depending on the platform, you can also set a maximum acceptable loss.
Mirror Trading: Is It a Reliable Activity?
Copy trading is legal in most countries, provided the broker offering the feature is itself properly regulated. When you invest in the financial markets through a regulated broker, the account opening procedures ensure that your transactions are legal based on your country of residence.
In France, for example, brokers that let their clients copy trades are regulated by the AMF (Autorité des marchés financiers). This is because the activity is not classified as investment advice. The decision is in fact highly controversial in France, as some people consider mirror trading to be nothing more and nothing less than portfolio management.
Supporters of this view argue that “pro traders” should hold a management mandate, since they are comparable to fund managers. If that happens, “copy traders” will no doubt be better protected.
Mirror Trading Reviews
User
Review
Source
Anthony Verger
I discovered your content a few days ago. I started with CopyTrading at eToro after looking at several platforms; so far I’m up 4.47% in 1 month. Like many others, I think, I would have liked you to name sites to avoid and, on the other hand, sites that are genuine and serious, even if you don’t really like them.
See Review
Victor zarkos
I tried copy trading on a demo account. As soon as I started following a trader I liked… they started taking heavy losses…. Watching them trade, I told myself I would sell my own currency swing strategies. For that I would have needed to work semi-automatically. I contacted professional developers (one of whose partner works at a well-known broker) to have my system send a text to my smartphone so I could step in if needed. They were so professional that I never heard back. It’s like advertising: sure, it works… As a result, for now I’ve put copy trading aside, both as a follower and as a provider, but I check in from time to time…
See Review
Why Use This Kind of Trading?
If you don’t want to trade manually, with all the difficulties that market analysis involves, copy trading is the right activity for you. It lets you earn additional passive income while keeping your regular job. You will therefore depend on a trader to take care of your annual returns. If, on the other hand, you don’t want to depend on a trader, then this activity is not for you.
Copy Trading vs. Social Trading
Social trading and copy trading share the same foundation, but they differ in many ways. Social trading is a broader term, and copy trading is part of it. This means copy trading can be considered a type of social trading (which is where the confusion comes from).
With social trading, you don’t let someone else manage your trades automatically. You can use information from other traders and base your decisions on it, but ultimately, if you decide to open a position, the decision is yours. You have much more control over your portfolio and your trades. It is a double-edged sword, however, since you also have to manage your emotions.
Copy trading is a very strict form of social trading that links your account to another trader’s account. Their transactions are mirrored on your account. Their profits are your profits and their losses are your losses. You don’t choose to open positions; the process is automated. On some platforms you can manage them, while on others all you can do is stop copying the trader.
Copy trading literally requires nothing from you other than clicking the “copy trader” button. From that moment on, all of their actions will be copied to your account (including their open trades). The advantage is that you don’t have to do anything else: the system is automated and takes care of everything.
If the trader wins, you win; if they lose, you lose. It’s that simple! The downside is that if you pick a bad trader, or one going through a rough patch, your portfolio will suffer, so you need to know how to assess losses.
To succeed at copy trading, you need to study several criteria before getting started. The most important are choosing the copy trading broker and choosing the trader to copy. The most reputable and best-known platform in this field is eToro. On this platform, you can copy the best traders for free. All you need to do is open a trading account with this broker.
You should also take the time to analyze the profitability statistics of the trader you want to copy. This step can take time, but it is worth it. It is also advisable not to copy just one trader but to diversify your portfolio by copying several (around 5).
Which Broker Should You Choose for Trading?
How Much Money Do You Need to Start?
The amount you need to start copy trading depends on the broker. On eToro, for example, you can start with $200. Depending on how profitable the activity is for you, you can gradually increase your budget. However, it is advisable never to put more than 20% of your capital on a single trader.
Benefits and Risks of This Trading Activity
Benefits
There are several reasons why someone interested in Forex might turn to copy trading rather than placing trades themselves:
Gaining more knowledge by watching professional traders in action;
Skipping market analysis due to a lack of time or resources;
Trading part-time rather than full-time;
Simply collecting the gains while letting someone else handle the technical side.
For some traders, mirror trading is their entry ticket to learning the Forex market in depth and understanding how the system works. Once they have acquired the necessary knowledge and skills and gained confidence, they move on to manual trading. In fact, it is recommended to treat this activity as training. Its biggest advantage is that, as a bonus, it lets you earn money while you learn.
Risks
The risks you face when you trade currency pairs regularly are still present when you copy other people’s trades. The only difference is that you are not the one making the trading decisions, and the professional traders you follow do most of the risk assessment and part of the management for you.
That said, you can be more profitable by taking active steps to manage your own risk. By diversifying your investment portfolio with Warren Buffett copy trading, for example, you can easily spread your risk and mitigate it more effectively. You can also use the “Copy Stop Loss” system to limit your risk.
In addition, you can filter which trades to copy based on their risk level. The better you understand the styles and habits of expert traders, the better you can pick the best trades and manage your risk.
Inappropriate settings
Your account does not match the permitted leverage, which could cause a premature stop.
Lack of diversification
Trading signals that are not diversified enough.
Signals that are too correlated in the same direction.
Insufficient diversification across asset classes.
Lack of reasonable data
Inaccurate or manipulated statistics at the copy trading broker could make risky signals look better than they really are.
Following a signal that is supposedly traded manually but is actually a trading robot running without human supervision. Major news events or programming bugs could lead to significant losses.
Survivorship bias could lead to an inaccurate analysis of signals, making some of them look more attractive than they really are.
Following a supposedly live account that is actually a demo account (or too small to matter to the trader) overexposes the follower to risk.
Market risk
Major news, such as a central bank intervention, could trigger a sudden, rapid and massive move in currency markets, which could cause a stop out or a negative account balance (for example, the Swiss National Bank’s intervention in 2011, triggered by the Greek sovereign debt crisis).
Broker selection
The broker’s minimum lot size is too high, which could cause malfunctions on some platforms.
The follower’s broker reaches its maximum limit of open positions, which could cause malfunctions on some platforms.
The margin call and stop out percentages of the follower’s broker are too conservative, which could lead to a premature stop out.
Signal provider risks
The signal provider stops their signal without notice and you have no backup plan.
The signal provider changes their trading strategy or becomes too aggressive, which can mean riskier trades.
The signal provider could be stopped out by their broker because of a large drawdown.
Technical risks
The signal disconnects because you forgot to renew the signal subscription or pay the monthly VPS fee.
The VPS shuts down or MetaTrader closes without restarting.
The follower’s account falls out of sync with the signal without them knowing.
The copy trading network servers (MQL5, ZuluTrade, etc.) go down during trading hours.
Here is a list of terms you need to become familiar with if you want to get started in this activity.
Autotrading platform: the technical solution that executes positions on your own trading account without your intervention. The signals for these trades can come either from automated robots (for example, MetaTrader expert advisors) or from other traders, as is the case with trading signal providers.
Broker: a broker is an agency that arranges trades between a buyer and a seller and earns a commission when the transaction is executed. You need a brokerage account to copy the trading signals of the traders you follow.
High Water Mark: a term used by account managers to calculate their performance fees. It ensures they are not paid unless the account’s overall profit reaches a new peak.
Pip: most currency pairs have an exchange rate quoted to four decimal places, for example EUR-USD 1.3105. A change of 1 in the last decimal place equals one pip. So a move from 1.3105 to 1.3115 is a 10-pip move.
Signal provider: the name used to identify the 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 per trade.
Micro lots are the smallest tradable lot size available. One micro lot equals 1,000 units of your account currency. For example, if your account is in euros, a micro lot is worth €1,000 of the base currency you want to trade. So if you trade a euro-based pair such as EUR-USD, a one-pip move in the currency will equal a 10-cent move in your invested capital.
A mini lot equals 10,000 units of your account currency. So a 1-pip move in an EUR-USD trade would be worth about $1.
A standard lot is a lot of 100,000 units. So with a USD account, a 1-pip move in EUR-USD would mean a gain or loss of €10 on your account. Note that in currency trading, the market can easily move 100 pips in a day, and sometimes in a minute during certain news events. For example, if you trade standard lots, you can quickly lose $1,000 on a 100-pip move. So match your lot size to your situation and to what your account can handle.
Slippage: the difference between the price at which a trade was executed on your account and the price at which it was executed on the account of the trader you followed/copied on the social trading network. It can be positive (you got a better price) or negative (you got a worse price). Several factors affect slippage, including the delay in executing the trade and the broker’s spread (which may differ between your broker and theirs). Since the trader normally trades in the direction of a trend, slippage will most often be negative, because the price will have moved in the direction of their buy or sell.
Is It a Full-Time Activity or Just a Hobby?
You are probably wondering whether you can make a living from copy trading. It all depends on the trader! For some people, this activity is just a hobby, simply a step toward manual trading. Others practice mirror trading full-time, given how easy the activity is.
Need we repeat it? All you have to do is click “Copy trader” and let the trader you have chosen handle all the technical details of trading, such as technical/fundamental analysis, spreads, margins or even the financial instruments. Ideally, however, you should use this activity to learn how to trade, with a view to eventually trading manually yourself.
It is recommended to copy trade during the day. This lets you stop the bleeding and keep any potential losses to a minimum. But those who plan to make a living from copy trading are tempted to follow traders around the clock so they don’t miss the best trades. You should also take the different market opening and closing times into account:
Forex opening time
Sunday evening at 11 p.m., Paris time
Forex closing time on Friday
Friday evening at 10 p.m., Paris time
Forex trading hours
Continuously, from Sunday at 11 p.m. to Friday at 10 p.m., Paris time
Forex volatility hours
Generally, the times of economic announcements
Paris Stock Exchange closing time
5:30 p.m. for the cash CAC 40 contract
Stock exchange closing days
Stock exchanges are closed on Saturday and Sunday
New York Stock Exchange opening: 3:30 p.m., Paris time
Forex holidays: New Year’s Day and Easter
What Gains and Losses Can You Expect When Starting Out?
As with any investment, you can make or lose money with copy trading. The principle of mirror trading is that you can assess each trader’s rate of return before choosing which signal provider to follow.
However, as the market saying goes, “past performance is not indicative 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 thorough research before committing to a strategy. Overall, eToro is one of the platforms where traders lose the least money when copy trading.
Which Type of Account Should Beginners Use for Mirror Trading?
As a beginner, this activity can help you generate monthly passive income without any particular trading knowledge, so you won’t have to give up your regular job. We always advise starting with the broker’s demo account to see whether it suits you.
Demo Account
For anyone who wants to invest real money in trading, the best way to start is to try a free demo account first. It will help you get familiar with the concepts and the interface, while helping you understand how to manage your money and set your risk levels when you start investing real money.
To get the most out of a copy trading demo account, it is obviously best to try the same investment amount and the same level of risk you plan to use once you switch to real money. Otherwise, your expectations are unlikely to be met once you invest real money. Here are some brokers that offer free demo accounts for copying trades:
ZuluTradeDemo Account: the ZuluTrade account is fully functional, and you can open it in 5 base currencies (USD, EUR, GBP, JPY and RUB) with a starting balance and leverage of your choice. It is obviously best to choose the base currency and amount you plan to invest with real money. As for the leverage setting, unless you are an expert trader, simply leave it at 50:1.
eToro Demo Account: this account lets you invest $10,000 in virtual money. The demo account settings are identical to those of the real-money account. This means you cannot invest more than 20% of your funds in a single trader and can copy a maximum of 10 traders. When your eToro demo account runs out of funds, eToro tops it up automatically. Needless to say, this will not happen with a live account.
Ayondo Demo Account: with their virtual account, you can build a portfolio of up to 5 of their “Top Traders” and evaluate performance over 15 days. After 15 days, you must recreate the portfolio or open a live account to keep copying trades. The platform gives you €1,000 in virtual money to start. The demo account is fully functional, giving you access to all the tools to evaluate Ayondo’s traders, simulate your portfolio, adjust your lot sizes and track your performance.
AvaTrade Demo Account: when you complete the process of opening an AvaTrade demo account, you will get access to a slightly different account type depending on your region. This is necessary because the broker is regulated in 6 jurisdictions in total, and within the EU it must remain compliant with local regulations.
The best way to manage risk in mirror trading is to copy several traders instead of just one. You should also limit the share of your total capital placed with any one trader to 20%. Choosing a reliable, well-established platform is another key factor.
What Success Rate Should You Expect?
Whether you are a beginner or an experienced trader, it is important to understand that the success rate is not the most important factor when copying trades. In reality, you can have a 20% success rate in this activity and be more profitable than someone with 60%.
The key to success is money management, in other words, how gains and losses are distributed. In practice, you need to make sure your winning positions earn as much as possible and keep losses on losing positions to a minimum.
Training
Knowing the definition of copy trading is not enough to practice it. The activity itself does not require training, but it does require common sense and a reasonably sharp analytical mind. All you have to do is choose the right broker and the right trader to copy. So how do you choose the most profitable trader? Here are some search criteria we recommend:
10 to 30% annual return: if a trader drops below 10%, all their investors will have some tough months. But what should really worry you are traders with 12-month returns of 80%, 100%, 200%+. Such dangerously high figures are usually the result of an inexperienced investor using too much leverage and simply getting lucky. They won’t be able to repeat that kind of performance over the long term.
1 year of trading experience: don’t copy traders who do not have a trading history of at least 1 year. Otherwise, you won’t be able to tell whether they can deliver good long-term results.
Active traders: look for traders who make at least one trade a day.
Low risk level: any trader you copy should have a sufficiently low risk score. This shows they use sensible trading strategies.
Although copy trading is automatic, it is always useful to know whether the strategy provider you follow is making good trades. You also need to know whether their trading plan is sound, whether it can be replicated and whether it is profitable over the long term. What exactly does that mean?
First, orders must be placed on the basis of a proven trading plan or strategy. The best traders have developed a plan over time and stick to it even when they lose, because they know it works. The more time you spend watching a pro in action, the easier it will be to see their trading pattern. If it is effective, the trades you copy will be too.
Next, orders must be placed on the basis of reliable setups. For example, a trade might be taken because the market is trending up and has made a two-legged pullback to the moving average (MA). If the same price action occurs in the future, you can take a new position.
Of course, you want an activity that generates profits overall. Not every trade will be profitable, but if a large share of them are, you are on the right track. Keep a log of all trades and review it periodically to assess profitability. Be careful not to judge the outcomes, but rather the reasons why the buy or sell order was placed and whether you can replicate it.
A Few Tips
Here are a few tips for succeeding at copy trading.
Diversify Your Portfolio
As mentioned earlier, spread your risk by following a number of 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
Although it may be tempting to withdraw your gains, you will benefit more by investing them in larger trades. Of course, you may lose on a trade, but the compounding effect of your profits can help you reap substantial gains. Remember to set a loss limit to protect your capital.
Build Your Trading Confidence
Copy trading gives you the opportunity to watch other traders closely and gain confidence in the process. This way, you can move from a demo account to a real-money account. Once you have acquired more knowledge and skills, you can move on to manual trading.
Becoming an ace at mirror trading does not depend directly on your trading skills, but on the profitability of the trader or traders you have chosen to follow. Naturally, to get good at it, you need to master and strictly apply the selection criteria we covered above.
The Right Psychology for Mirror Trading Success
Unlike manual trading, where trader psychology is a decisive factor, copying trades does not require any particular mindset. This is simply because you are not the one executing the trades; a signal provider is. Copy trading takes the psychological burden of online trading off your shoulders. When you leave the management of your portfolio to a professional, you are under less pressure and everything is automated.
Copy trading is a strategy that does not require much thought or effort. You can invest in whatever you want. You can start right away or take time to observe other investors before deciding to imitate what they do. If a particular investor is not successful, you can always switch to following another one. Better still, it is something you can do in your spare time. You can trade whenever it suits you, so there is no psychological pressure.
Finding the Best Broker
The best mirror trading platform is not necessarily the most profitable one. It is essential to adjust your risk settings to the strategy that best matches your investment goals. For example, a more conservative investor may choose a system whose average loss per trade is smaller than its average profit. A more aggressive investor, on the other hand, may choose a strategy with greater volatility, which means a higher risk of losses.
Many modern Forex copy trading platforms list hundreds or even thousands of signal providers. As a result, it can be hard for traders to decide whom to follow. So it is always important to do your research, start with a small amount and never risk more than you are prepared to lose. To choose the best mirror trading platform, you need to consider three main factors: execution speed, the traders available to copy and customer service.
Execution Speed
To copy a trade, you always need a system that executes copy orders as quickly as possible, ideally in under 1 second. A one-pip difference matters a lot, depending on how your portfolio is allocated. That is why your order must be filled at the best possible price and at the same time (or almost) as the trader whose strategy you are copying.
The Trader to Copy
The platform must also give you all the details you need to choose a trader to copy. Since making money with this technique depends intrinsically on the trader you copy, the least you can expect from a platform is to provide as much information as possible on the track records of the traders available to copy. You should be able to tell whether they generate consistent profits over the long term (at least one year) or not.
Customer Service
Most importantly, the trading platform you choose should offer customer service at every level, whatever the size of your account. Ideally, customer service should be available 24/7 to help you and answer any concerns.
Comparison of Mirror Trading Brokers
It is important to note that eToro is not the only copy trading site.
On some platforms such as MT4 and MQL, you can do mirror trading through features such as MQL5 copy trading and MT4 copy trading. Other brokers presented below also offer social copy trading or copy trading for scalping.
FXCM
FXCM’s platforms include a proprietary trading station, as well as MetaTrader for MT4 copy trading and MT5 copy trading, TradingView and NinjaTrader 8, all of which support automated trading. FXCM also offers ZuluTrade, a copy trading app for mirrortrading, and Trader Workstation (TWS), powered by Interactive Brokers (IBKR), for stocks.
Pepperstone
For algorithmic traders and copy traders, Pepperstone offers both the MetaTrader suite of platforms and cTrader. Pepperstone also provides many high-quality add-ons to enhance the MetaTrader offering. While cTrader and MetaTrader both support automated trading, cTrader has an edge with its web-based platform, which offers a wider range of trading tools than MT4 Web. The desktop version of MetaTrader includes the algorithmic trading module, whereas cTrader requires the standalone cAlgo platform to run alongside it, a small but notable difference.
Darwinex
This broker offers Forex traders a one-of-a-kind community that lets investors buy and sell strategies developed by professional traders. Darwinex is excellent for mirror trading and has long been one of the best in this area. The platform is also easy to use and offers many unique features in its copy trading app.
Darwinex traders have access to a wide range of configurable parameters to sort more than 2,000 Darwin strategies (including closed Darwins) and can search performance rankings using predefined and custom filters, such as overall return. The Darwinex score, for example, uses the company’s own ranking to assess a strategy’s overall potential. The higher the score, the better.
Copy Trading Fees
Naturally, whether you copy a trade or place one manually, you have to pay the trading fees charged by each broker. The big question, however, is whether you have to pay extra fees to copy a trader. Well, it depends on the platform you use.
On eToro, for example, there are absolutely no extra fees for copy trading. eToro’s CopyTrader is a trading feature that lets you copy other traders of your choice, so the trades they open are automatically opened on your account with a proportional percentage of your allocated funds.
eToro’s commission comes from the spread on the buy or sell orders of the trades you place, and the good news is that spreads remain the same whether you copy someone or place your trades manually. Better still, if you are a successful trader, you can get paid for being copied by joining eToro’s Popular Investor program.
On some platforms such as cTrader, however, copy trading comes at a cost. For example, you must pay the management fees (up to 10% of the investor’s capital) set by the signal provider. You also have to pay performance fees, which are a percentage of the total net profit generated by a strategy on the copy trading account.
This commission must not exceed 50% of the profit made. You also have to pay volume fees, which is the amount an investor pays per million of copied volume. The maximum commission is $100.
What Is the Best Mirror Trading Broker?
Over the years, eToro has built a strong reputation in the industry and today positions itself as the best copy trading site. CopyTrader is the most popular feature of the eToro platform, allowing you to automatically copy the trading strategies of professional traders. eToro’s main innovation is combining automated trading and mirror trading in a single, unified trading experience. Another distinctive feature of eToro is that it is a free copy trading broker.
When you copy trades with this broker, you pay no commission to the traders you copy. Only the standard trading fees are deducted from your account. The benefits of CopyTrader include:
Financial instruments: eToro offers a wide range of markets for mirror trading. You can trade stocks, Forex, commodities, ETFs and indices. And it doesn’t just offer US stocks: you can trade shares from all over the world.
Ease of use: at the heart of the eToro platform experience is how easy it is to carry out basic operations and complete tasks quickly, such as creating watchlists and adding instruments by searching the available markets, as well as placing a trade directly from each list. These design qualities have earned eToro a best-in-class ranking.
The CopyPortfolios tool: this other innovative eToro tool groups all the traders you can copy into a single list. CopyPortfolios help bridge the gap for investors who want to use eToro passively, as they can build a portfolio based entirely on one or more CopyPortfolios. Self-directed traders can also use CopyPortfolios to diversify their trading, which makes the tool potentially useful for all eToro clients.
The ability to copy the trading strategies of experienced traders: all eToro traders place their orders manually. Fully automated trading systems, such as those supported by MetaTrader, are not allowed on eToro. So when you copy another trader on eToro, you can be sure they place every buy or sell order manually.
This is an important point, because many other trading platforms that aggregate trader performance generally allow both discretionary (manual) trading and automated strategies, whereas eToro’s network consists only of manual trading.
eToro Reviews
Copy trading
Review
Rating
andy5201314
“Excellent platform!
Easy to use for a beginner like me. The best feature is CopyTrader. Thumbs up!”
★★★★★5/5
nicholasalexis
“The Facebook of Trading!
After trying two other trading platforms and several other demo accounts, I have to congratulate eToro on its interface and user experience. Keep it up…”
★★★★★5/5
theglobalfund
“Investing has become fun Watching professional traders place orders lets me learn and interact with amazing people all over the world.”
★★★★☆4.5/5
Read Reviews
What to Consider Before You Start Copy Trading
Below are three things to consider when it comes to this activity.
A Relatively High Minimum Deposit
To copy some experienced traders, you will need a starting balance of several thousand dollars. Some traders even require their followers to have around €20,000. This makes sense, because a floating position can wipe out your account before reaching its target if the account balance is not adequate. For some people, however, that kind of money is hard to come by. Those with a large sum of money can rightly afford mirror trading, but it is not advisable for those with a micro or mini account. On the other hand, copy trading services can be very rewarding for those with substantial means who don’t want to spend time scrutinizing the financial markets.
Past Performance Is Not Indicative of Future Results
This cannot be said often enough! If you follow some of the top pros on a copy trading forum, you will see that their performance fluctuates considerably. The network usually keeps records where you can see a person’s past and current performance, but future results are another matter entirely. Someone who has achieved spectacular results could see their performance drop sharply within a few days. Someone in first place this week could slip to third place the following week, then fall into complete obscurity within a month.
Copy trading will benefit those who don’t have time to trade Forex themselves and those who don’t particularly want to get tangled up in fundamental and technical analysis. However, that doesn’t mean you can leave everything to the pros. They are experienced, but even professional athletes make mistakes from time to time. That is why you need to monitor your account frequently and make the necessary adjustments.
Emotions
Some people are more comfortable making decisions themselves rather than relying on people they don’t know. That is not wrong. However, making your own decisions means emotion will inevitably creep in. Emotion intensifies when you face choices that affect your wealth, and this feeling is the main culprit behind many blown trading accounts.
When copying trades, you might think the decision to open or close a position will always be made without the influence of your emotions, but no! Copiers sometimes let their emotions get the better of them and close a position, only for a change in trend to prove them wrong.
Conclusion
Mirror trading is the ideal starting point for a beginner trader. It lets you experience other traders’ successes and failures 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 need to be very careful when choosing your platform, based on how much control you want over your trades. You also need to be careful about which trader you choose since, ultimately, you are entrusting part of your portfolio to a complete stranger.
Although some traders make money with this activity, it is worth remembering that mirror trading may not suit everyone. Think carefully before you start. Even if you don’t place the trades yourself, that doesn’t mean the risk factors magically disappear. In other words, following the advice of a professional, experienced trader does not mean that advice is necessarily perfect. The best broker for copy trading is therefore eToro, as it offers its users first-class social trading.
What do you think of copy trading? Share your experience and leave us a comment!
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Le stockage ou l’accès technique est strictement nécessaire dans la finalité d’intérêt légitime de permettre l’utilisation d’un service spécifique explicitement demandé par l’abonné ou l’utilisateur, ou dans le seul but d’effectuer la transmission d’une communication sur un réseau de communications électroniques.
Préférences
L’accès ou le stockage technique est nécessaire dans la finalité d’intérêt légitime de stocker des préférences qui ne sont pas demandées par l’abonné ou l’internaute.
Statistiques
Le stockage ou l’accès technique qui est utilisé exclusivement à des fins statistiques.Le stockage ou l’accès technique qui est utilisé exclusivement dans des finalités statistiques anonymes. En l’absence d’une assignation à comparaître, d’une conformité volontaire de la part de votre fournisseur d’accès à internet ou d’enregistrements supplémentaires provenant d’une tierce partie, les informations stockées ou extraites à cette seule fin ne peuvent généralement pas être utilisées pour vous identifier.
Marketing
Le stockage ou l’accès technique est nécessaire pour créer des profils d’utilisateurs afin d’envoyer des publicités, ou pour suivre l’utilisateur sur un site web ou sur plusieurs sites web ayant des finalités marketing similaires.
