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Copy trading. A simple guide on how to copy trades to earn money
Many people have the desire to earn money in the financial markets, but not all of them have the time, knowledge and desire to trade on their own. Forex brokers offer affordably and simple-to-use solutions for all categories of customers. Copy trading is one of the most appealing passive income options.
Copying positions using a special social platform, you can achieve expert-level profitability. These kinds of platforms are quite popular, with millions of people joining them. Read on and learn about the steps you need to take to copy traders: which brokers offer this service, how to choose a suitable trader and the copy trading platform and the risks this type of investment involves.
Interested in Copy Trading? - Try RoboForexWhat does copy trading mean?
First social trading platform was launched in 2010, introducing copy trading on the Forex market. Inspired by the rapid growth of social media, the developers decided to adjust their philosophy to the sphere of finance.
The idea was equally innovative and simple – to unite the beginners and expert traders on a single trading platform. Professional traders are doing what they love the most – trade, while novice traders have the option to subscribe to them and copy their trades automatically or semi-automatically, using a special set of functions.
Today’s copy trading platforms feature a wide set of functions, including searching for a suitable manager and setting up risk management settings. Here are the key features:
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Analytics of the traders’ trading results;
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An option to distribute equity among dozens of traders with different strategies and trading instruments under their management;
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An option to stop copying at any given moment;
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An option to set up the maximum risk level for each investment.
Every copy trading platform usually also has other unique features.
Pros and cons of Forex copying traders
Also noteworthy, copy trading platforms do have certain drawbacks, the biggest one being that the excellent results of a trader now do not guarantee that the same will be achieved in the future.
So, let’s sum up the information we have divulged so far.
👍 Pros
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Low entry threshold
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A possibility to enter the market without a big trading experience
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It is potentially possible to earn as much as the top traders
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Possibility of flexible setting in terms of risk management and search of traders
👎 Cons
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Successful trading in the past does not guarantee high profit in the future
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Even the most experienced traders may suffer losses
Top 9 brokers to copy trades on Forex
The first step towards copy trading on Forex is finding a suitable broker that offers this kind of service. We have listed the Top 10 Brokers that meet the following criteria:
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They are regulated at one of the world’s largest financial centers;
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They provide exhaustive information regarding all the important conditions and risks of copy trading;
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They offer beneficial trading conditions: low commissions and fees, wide selection of trading instruments, good quality of order execution;
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They own their own advanced set of features for copying, or one of the several top social trading platforms, developed by a third party.
Broker |
Minimum Investment Amount |
Assets for copy trading |
Social Trading Platform |
Regulator |
|
---|---|---|---|---|---|
$100 |
Over 250 assets: Forex, Stocks, Cryptocurrencies, Commodities, CFDs, Bonds, ETF. |
AvaSocial, DupliTrade, ZuluTrade, MetaTrader MQL5 |
Central Bank of Ireland, ASIC, FSCA, Japanese FSA, ADGM, FRSA |
||
$100 |
Markets: Forex, CFDs, Stocks, Commodities |
FXTM Invest |
CySEC, FCA, FSCA, FSC |
||
$100 |
Over 12000 trading instruments: Forex, Stocks, ETF, Crypto, Commodities, CFDs |
RoboForex CopyFx |
IFSC |
||
$50 |
Forex, Commodities, CFDs, Stocks |
Naga Autocopy |
CySEC |
||
$200 |
Markets: Forex, CFDs, commodities, Crypto, Stocks, Bonds |
MyFxBook, ZuluTrade |
AFSL, ASIC, CySEC |
||
$10 |
Over 300 trading instruments: Forex, Stocks, Crypto |
ForexCopy |
FSC |
||
$100 |
Markets: Forex, Bonds, CFDs |
MyFxBook |
FCA, CySEC, FSCA, Seychelles FSA |
||
$1 |
Forex, CFDs, Crypto |
Share4you |
BVI FSC |
||
$100 |
Forex, Crypto, Commodities, CFDs |
NordFX Copy Trading |
VFSC, CySEC, SEBI |
Best platforms for copy trading on Forex in 2024
All copy trading platforms can be conditionally divided into two big groups:
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1
Mono-platforms. A number of brokers use their own developments and offer to copy traders only to their own customers. FXTM, RoboForex, Forex4You have their own proprietary platforms.
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2
Copy trading platform providers. In the list above you can see that the majority of brokers use standard platforms from third-party providers. The most popular among them are MQL, ZuluTrade, Myfxbook and DupliTrade.
Every platform has their own pros and cons. Our experts chose the best ones and compiled a rating. In the table, we specified which brokers use the platform, what the minimum deposit is and the type of the platform — a mono-platform or a provider.
Social Trading Platform |
Platform type |
Compatibility with trading platforms |
Minimum deposit |
Brokers that use it |
---|---|---|---|---|
Provider |
MT4, MT5 |
$0 |
AvaTrade, XM, IC Markets, Pepperstone, WForex, HotForex |
|
Provider |
ZuluTrade, MT4, MT5 |
$300 |
AvaTrade, IC Markets, FxOpen, Weltrade, Think Markets |
|
FXTM Invest |
Mono |
MT4, MT5 |
$100 |
FXTM |
CopyFX |
Mono |
MT4 |
$100 |
RoboForex |
What is specific of copying traders on Forex?
Copy trading on Forex is quite similar to other markets. It is just as important here to really focus on carefully searching for the right broker and traders to copy. Some brokers offer an option of choosing traders who specialized in this market and show great results.
As for the peculiarities, one must keep in mind that the currency market is, usually, calmer in terms of volatility. In order to increase returns, many traders try to use a big leverage. This practice leads to increased risks. That is why it is always important to check the maximum slippages that a trader you plan to copy has had.
High liquidity makes this market attractive for high-frequency strategies. In this case, control over the expenses for paying broker’s commissions will play an important role.
Can you make money from copying traders?
Of course you can. If copy trading did not bring profit to a large number of investors, it wouldn’t have been so popular. However, just as with any investment, there are always risks. You can make a good profit, but you can also lose some of your equity. For this reason, copy trading on Forex should not be viewed as the only area of investment. Do not invest more than you can afford to lose.
The main risks of copying trades
The markets are essentially volatile and the strategies that bring excellent results to traders today may turn out to be totally ineffective tomorrow. Profit in the past does not guarantee returns in the future.
The advice we gave earlier will help you minimize the risks. Let’s repeat the three main recommendations:
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1
Diversification of the portfolio among traders
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2
Monitoring trading history of the trader for the period of one year or longer and excluding the traders that allowed major slippages of the portfolio
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3
Limiting the level of maximum losses for automatic stopping of copying
In addition, it is recommended to invest a smaller share of your capital in higher-risk strategies and the bigger part – into less risky strategies.
What the main costs of copying traders
The costs largely depend on the chosen broker and copy trading platform.
As for the peculiarities, one must keep in mind that the currency market is, usually, calmer in terms of volatility. In order to increase returns, many traders try to use a big leverage. This practice leads to increased risks. That is why it is always important to check the maximum slippages that a trader you plan to copy has had.
High liquidity makes this market attractive for high-frequency strategies. In this case, control over the expenses for paying broker’s commissions will play an important role.
Summary
Copy trading is certainly a quite promising area for making money on Forex and other financial markets. Thanks to this service, even novice traders with small investment amounts can earn a profit at the level of a professional trader. However, one should always keep in mind that profit and risks are always close to each other, which is why one should not overestimate the possibilities of copy trading. Do not forget about the rules of diversification and do not try to chase excess profit, and then you will have a better chance at earning some real profit.
Expert commentary
Antony Robertson, Traders Union Financial Analyst
At first glance, copy trading seems like a very simple task. Indeed, the platforms are trying to
improve
usability as much as they can, build the search logic and filters in a way that any customer can
understand.
However, this type of investment should be treated just as seriously as any other. Analysis of
trader
statistics, building an investment portfolio, setting risk management criteria – these are the
actions you
have to understand, otherwise you risk getting ‘burned’.
If you treat this seriously, your chances to achieve success will improve substantially, but
still won’t be
guaranteed, simply because that is how the market works – the strategy that works well today may
turn out to
be unsuccessful tomorrow.
Copying traders reviews
Copying traders on FXTM turned out to be a lost time for me. I got hooked on the promise of big returns. At first, things were going well, but as soon as there was volatility on the market, my traders started to slip; I chose different ones, but the picture was mixed there – a month of profit, then a month of loss. In the end I broke even and decided it was good enough. Maybe I wasn’t patient enough.
Riana Young, 28
Sales Manager
Glasgow
Huge profit is the thing that one should not expect from copy trading. Of course, you may get lucky, if you choose a good trader at the right moment. However, often, those who have big profit later lose it just the same. I believe that the ideal strategy is to build a pool for copying several traders with conservative strategy. The chances to get 15-20% annual profit are much higher than 150%.
Sean Fulton, 33
Business owner
Indianapolis
My experience with ZuluTrade turned out to be fully successful. The platform is very convenient, with many filters that can help you choose the strategy to any taste. There are a humongous number of traders. I use a portfolio. I invest the investment part into conservative traders that trade fundamental analysis and the speculative part – into highly profitable traders. In reality, the result is more or less the same. Still, I dream of getting at least some excess profit together with somebody!
Robertо Faber, 27
Dentist
Madrid
FAQ
What kind of profit can I expect by copying traders?
Profitability depends on many factors. There is no universal answer. Firstly, it is important to choose a good broker with beneficial trading conditions. Secondly, you need to find an effective trader, who shows stable financial results. And, naturally, market situation and other circumstances also play a certain role in this.
Can I lose money by copying traders?
Yes, this is a probability. Trading on the financial market always involves a certain degree of risk. This is why it is important to observe the rules of risk management and not to invest more than the amount you are prepared to risk into financial instruments.
Which broker should I choose for copy trading?
This largely depends on your individual preferences. According to Traders Union expert assessment, AvaTrade currently has the best offer. The broker offers a combination of a convenient copy trading platform, good trading conditions and reliability.
Who is the best copy trading broker today?
As of today, AvaTrade is on the top of the list. The broker boasts the most advanced platform, beneficial conditions for copy trading and the largest choice of signal suppliers.
Team that worked on the article
Knows about
Trading strategies, technical analysis, Forex, stock market, long-term investing
Andrey Mastykin is an experienced author, editor, and content strategist who has been with Traders Union since 2020. As an editor, he is meticulous about fact-checking and ensuring the accuracy of all information published on the Traders Union platform. Andrey focuses on educating readers about the potential rewards and risks involved in trading financial markets.
He firmly believes that passive investing is a more suitable strategy for most individuals. Andrey's conservative approach and focus on risk management resonate with many readers, making him a trusted source of financial information.
Experience
Andrey's passion for finance began in 2009, and he has since accumulated extensive experience in trading and investing across various asset classes, including stocks, Forex, and cryptocurrencies.
He has spent over 15 years managing his own capital and working with financial portals, financial institutions, and IT companies, as a financial writer and analyst, further refining his investment expertise.
He is the author of several training courses on investing and trading in financial markets. Led multiple FX/Stocks/Crypto webinar educational presentations. Authored hundreds of articles on the global economy, stock, cryptocurrency, and Forex markets, along with trading strategies. He has also penned hundreds of professional reviews of financial firms.
Throughout his journey, Andrey has been heavily influenced by the works of renowned authors and investors like Benjamin Graham, Ray Dalio, Robert Shiller, and Nassim Taleb.
Bruce Powers is an expert trader and technical analyst with over 20 years of experience in Forex, commodities, ETFs, cryptocurrencies and other assets. He is an active trader, technical and fundamental analyst, media commentator, educator and a writer. As an author for Traders Union, he contributes his deep analytical skills, expertise and understanding of the global economy and financial markets to provide market analysis and insights. Powers is also a frequent guest on business TV news shows.
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). Mirjan is a cryptocurrency and stock trader. This deep understanding of the finance sector allows her to create informative and engaging content that helps readers easily navigate the complexities of the crypto world.