Deriv copy trade service - Can you make money with copy trading?
Deriv copy trading can be an easy way for beginners to get started and potentially profit from the trading strategies of more experienced traders. However, copy trading is not a guarantee of making money. All trading carries risk, and even the most successful traders have losing trades or losing periods. Copy multiple traders in different assets or markets to spread out your risk..
Copy trading has emerged as a revolutionary way for investors, especially beginners, to navigate the financial market. It allows individuals to replicate seasoned professionals' trades, potentially earning as much as the experts. This review delves into the intricacies of copy trading on the Deriv platform, highlighting its features, benefits, and how to maximize its potential.
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What are the risks of copy trading?
The main risks are that the trader you copy underperforms the market or loses money. You should diversify across multiple traders to mitigate this risk. There’s also a slight lag in execution of copied trades.
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Who should consider copy trading?
Copy trading appeals to new traders lacking the skill or time to actively trade themselves. It also suits experienced traders looking to take advantage of specific niches or portfolio diversification.
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Can I automatically stop copying if a trader underperforms?
Yes, copy trading platforms allow you to set stop loss limits on each copied trader. If they lose a specified percentage over any period, copying will cease.
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Can I copy trade with a small account?
Yes. Most platforms have no minimum account balance for copy trading. However, your investment in each trader should exceed the minimum trade size to properly proportion trades.
What does copy trading mean?
Copy trading is a financial strategy where an investor copies the trades of another, typically more experienced, trader. The primary objective is to identify an investor with a consistent track record and mirror their trades. Deriv does not offer its own proprietary copy trading platform. Instead, it enables users to utilize trading signals from the MQL5 copy trading platform.
This approach has gained immense popularity recently as a passive income source in the financial market. Platforms designed for copy trading enable beginners to leverage the expertise of professional traders. Once subscribed, the trades executed by the professional are mirrored in the novice's account, either automatically or semi-automatically.
This means if the professional profits, so do the subscribers. The same is the case with losses. It's a blend of online trading and social media technologies, allowing for a communal trading experience. The essence of copy trading is trust in the professional's judgment, hoping their success continues, leading to profits.
Deriv copy trading pros and cons
👍 Pros
• Low level of the minimum deposit.
• A wide range of payment agents for replenishment of the deposit and withdrawal of earned funds.
• Availability of trading instruments of different groups: currency pairs, stocks, indices, metals, etc.
• Broker regulation by several authorities from different countries.
• Round-the-clock client support.
• No commission for maintaining a trading account and using its platforms.
👎 Cons
• The tutorials provided on the site may not be enough for novice traders.
• Deriv has only a few ways to contact support.
• The broker does not serve clients from several countries, such as the USA, Canada, Malaysia, Israel, etc.
• Deriv does not offer its own proprietary copy trading platform.
• Subscribing to trading signals requires an MQL5 community account.
How to get started with Deriv copy trading?
1. Access the Deriv login. Access the Deriv login page and log in. If you don't have one, registration is straightforward.
How to get started with Deriv copy trading
2. Make a deposit. Fund your account. The Deriv minimum deposit with VISA and MasterCard is $10.
3. Copy strategies. Browse the available traders on the platform. You can copy your trades once you've identified a trader whose strategies align with your investment goals.
How to get started with Deriv copy trading
4. Withdraw profits. You can easily withdraw your earnings from the platform after accruing profits.
How to find the right trader to copy
Choosing the right trader to copy in a copy trading platform is crucial for ensuring that your investments are in safe hands. Here's a comprehensive guide to help you make an informed decision:
Trusted traders. The trustworthiness of a trader can often be gauged by the confidence other followers have in them. It's essential to delve into the actual investments others have made with a particular trader. How much real money have they committed? And what kind of returns have they seen? A trader with only a handful of copiers might be a cause for concern. It could indicate a lack of confidence in their strategies or a relatively new presence on the platform.
Returns. A trader's past performance can offer insights into their potential future returns. While negative returns are alarming, exceedingly high returns can also cause caution. They might be a result of high-risk strategies or mere luck. Analyzing a trader's monthly returns is beneficial to understand their consistency and reliability.
Number of trades. A trader's activity level can testify to their expertise. Many closed trades, especially over 100, indicate a seasoned trader with consistent performance. It suggests that their success isn't just a stroke of luck but a result of strategic decisions.
Risk score. Most platforms assign traders a Risk Score, typically on a scale from 0 to 10. A low and stable score indicates that the trader doesn't take unnecessary risks and aligns with a more conservative investment approach.
Consistency. Consistency is critical in trading. A trader consistently delivering profitable months with minimal intermittent losses is a promising candidate. It's also advisable to opt for traders who have been active for at least a year, ensuring they aren't just beginners riding a temporary wave of luck.
Open trades. A closer look at a trader's open trades can be revealing. A trader with few open trades and a commendable winning ratio, say between 60-80%, is likely to be strategic and cautious.
Drawdown and winning trades. Drawdown represents the reduction in capital after a series of losing trades. A trader with a low drawdown is preferable as it indicates effective risk management. It measures how much they've lost before bouncing back to profitability.
Trader level. Some platforms categorize traders based on various performance metrics. Those ranked at higher levels have typically met specific criteria, showcasing their expertise and reliability.
What does Deriv copy trading cost?
Deriv offers a transparent pricing structure for its copy trading service. When subscribing to a trader's strategies, there are no hidden fees or commissions. However, if you opt for paid signals, you must fund your MQL5 account. The platform promotes free trading across all assets, ensuring users don't incur swap charges on overnight positions for selected indices and financial assets.
Is Deriv copy trading safe?
Safety and regulation are essential when choosing a copy trading platform. Deriv stands out as a legitimate and regulated broker. It operates under the oversight of several financial authorities, including the MFSA (Malta), LFSA (Malaysia), BVI FSC (British Virgin Islands), and VFSC (Vanuatu). These regulatory bodies impose stringent guidelines, ensuring that Deriv remains a secure platform for copy trading.
Best Deriv copy trading alternatives
Deriv falls short as a top copy trading broker due to its lack of proprietary trading platform. As a result, traders seeking alternative options could explore RoboForex and eToro, which offer more comprehensive copy trading features.
RoboForex CopyFx
Regulated by Belize (IFC), Roboforex is a popular copy trading platform that serves many traders.
Users of Roboforex love the platform because of its well-designed and user-friendly interface, convenient and relative analytics for traders and its low minimum deposit. It has a wide network scale of 1400 strategy providers with a minimum deposit of $10. Roboforex charges a percentage on profitable trades, the average being 40% commission on all profitable trades. RoboForex provides a social copy trading platform that functions as an affiliate program. You can earn a partner commission when referring new subscribers to the strategy provider. However, the disadvantages of using Roboforex are that the filters are not extensively developed, and the commissions being charged are pretty high, discouraging traders. Also, the broker is registered in an offshore company, which creates doubt in potential traders' minds.
eToro CopyTrader
eToro has an easy-to-use platform that allows traders to duplicate investors' trades across over 2300 instruments, including forex, exchange-traded securities, popular cryptocurrencies, and CFDs. Founded in 2007 and regulated in one tier-2 jurisdiction and two tier-one jurisdictions, eToro is a safe broker for trading CFDs and Forex.
Although the company recently introduced zero-dollar commissions and cut spreads for US stock trading, eToro is still slightly pricier higher than its competitors. Its primary innovation and product is merging copy trading and self-directed trading within a unified trading experience. With eToro, you can invest in and trade top stocks and ETFs, set up a meeting with your investors, and build your crypto-based portfolio. With a minimum deposit of $50, eToro lets you open four types of accounts: Standard account, Micro account, Islamic account, and the VIP account.
Available on Web Trader, mobile and Tablet apps, eToro’s advantages are that it supports a wide range of assets to trade, has an innovative platform, and is a highly regulated broker (CySEC, FCA, and ASIC). However, the disadvantages of eToro are that the spreads are a bit higher than the average, and it does not have the MetaTrader platform.
Team that worked on the article
Alamin Morshed is a contributor at Traders Union. He specializes in writing articles for businesses who want to improve their Google search rankings to compete with their competition.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).