When investing in Forex, there are several options available. Some may want to use their own knowledge to make a profit, whereas others will want to consider the expertise of experienced investors.
Although there is a learning curve to copy trading, some can find it the perfect fit for their investment requirements, although it should be noted that it won’t be suitable for all investors.
Copy trading allows investors to copy the trading positions of skilled investors. Although this may sound like a simple way of making money, factors still need to be considered before starting with copy trading.
Forex investors themselves can carry out copy trading, but many will use a platform that automates the process for them. When choosing a trader, their trading style must align with yours. It is also vital to ensure the available budget can cover the investment.
If you have been considering copy trading but are unsure where to begin, then using the right comparison site is necessary. In a recent post, FX Scouts lists the best brokers offering copy trading and can be the ideal starting point for those searching for a platform that aligns with their investment goals.
Several factors have been considered when determining the best copy trading platforms, an overview of which is as follows.
Given that copy trading comes with risks, it’s vital that people feel confident when choosing a trading platform. Pepperstone is an ASIC-regulated ECN/STP broker that allows its users to view an endless stream of investment strategies and real-time alerts. Hence, there are never any issues staying on top of copy trading investments.
Users of the Pepperstone platform can choose between three copy trading options: MyFxBook, MQL5 and DupliTrade. As well as being able to choose from a wide range of experienced investors, Pepperstone users can also edit the options to find traders who fit their requirements easily.
Regulation is a critical factor that must be considered when searching for a reputable forex provider, which is why Avatrade can be a popular choice among copy traders. In addition to Forex, those using the Avatrade platform can also invest in ETFs, bonds, and options.
Avatrade allows users to copy trade on its platform for free and offers increased functionality thanks to its implementation of Mirror Trader and Zulutrade. Users can choose from a series of copy trading options, including manual copy trading, semi-automatic, and automatic trading.
MetaTrader 4, often abbreviated as MT4, is a trading platform that allows for the seamless integration of strategies, regardless of their complexities. Axi is an Australian broker that aims to offer its users a customisable MT4 experience. It includes many tools that give users access to analytics and plenty of data regarding copy trading opportunities.
Traders wanting to brush up on their trading skills can also take advantage of free seminars, e-books and videos to enhance their experience and can keep track of progress via a dedicated app via the App Store and Google Play for Apple and Android devices, respectively.
Although plenty of copy trading platforms are available, there is not always flexibility regarding the device it can use. Fortunately, this is not the case with FP Markets, as it offers versions of its platform tailored for specific operating systems, including iOS and Android.
In addition to the flexibility FP Markets offers, it also provides a fantastic series of options when searching for copy trading opportunities, including the ability to copy multiple traders at once.
Users can also be confident that the ASIC-regulated will provide fast-trade execution and fantastic customer support.
Finding the right fit when you are a beginner can be overwhelming at first, but platforms are available, including IC Markets.
IC Markets offers support to users of the MT4, MT5 and cTrader platforms and includes a variety of tools that allow the process to be streamlined further, including Zulutrade and Myfxbook Autotrade for those searching for copy trading opportunities.
Factors to Consider When Copy Trading
Many investment platforms will have pros and cons depending on the user’s requirements. The following is an overview of some factors that need to be considered when choosing a copy trader.
Understanding the Different Types of Copy Trading
Although copy trading is a straightforward concept, there can be variations that investors need to be aware of.
Automated Copy Trading
As the name suggests, automated copy trading mirrors the strategy of a selected investor in real-time. Automated copy trades can be completed by the investor at any time but can also be closed in alignment with signal providers.
Semi-Automated Copy Trader
Although like automated copy trading, semi-automated copy allows investors to choose specific positions instead of all of them.
Manual Copy Trading
Manual Copy Trading is when a trader has access to the strategies of an experienced investor but applies these strategies manually. Trades can be closed automatically, although this will usually be done via a signal. Otherwise, the trade needs to be closed manually.
Are There Benefits to Copy Trading?
As long as copy trading is used correctly, it can yield several benefits for investors. One of the main benefits is that investors can make money from the financial market with little knowledge. Copy trading also allows first-time traders to diversify their portfolios quickly.
Are There Risks to Copy Trading?
Any type of investment has risks, and copy trading is no exception. For example, those using a copy trader do not have their financial status assessed, as the investments mirror someone else’s. This means a trader’s investors can be reduced exponentially, and all capital is at risk until a trade is closed.
Experienced traders will already be aware of the main risks, but those new to copy trading need to endure that they are familiar with the risks and the benefits.