Best Copy Trading Apps in Germany

What is Copy Trading?

Copy trading is an increasingly popular kind of social trading. This strategy allows new traders to either automatically or manually copy the trades of professional traders on the Forex and other financial markets.

In 2010, eToro was the first major broker to provide a copy trading platform. The creators combined the features of a social network for traders with a platform for copying trades.

Modern copy trading platforms have features that let users subscribe to traders and start copying their trades, either with a small amount of money or their whole account balance. Each position created by the copied trader, including stop-loss and take-profit orders, is immediately executed on the account of the copier. It is also possible to generate a portfolio analogue from multiple signal providers.

How to Choose a Copy Trading Broker in Germany

• 1

  Reliability and regulation assessment. It's crucial to select brokers regulated by recognized bodies. Traders Union experts recommend brokers regulated in the UK (FCA), EU (CySEC), Australia (ASIC), and other developed nations due to their stringent oversight

• 2

  Trading conditions. One must examine the broker's commissions, range of trading instruments, and quality of order execution. Some brokers might inflate the spread when offering copy trading, affecting your overall returns. It's essential to discern such details beforehand

• 3

  Studying the scale of the network. A more extensive social trading network presents more opportunities. It allows investors a wider selection of managers; conversely, managers can attract more capital

• 4

  Transparency. Ensure all statistical data related to the managers is publicly accessible and open to independent audits

• 5

  Platform’s technological effectiveness. Superior platforms provide comprehensive settings for selecting traders and risk management criteria, enhancing success probabilities

How can I find good traders to copy?

• 1

  Trusted traders. The number of followers a trader has can be a good indication of their trustworthiness and success. When selecting whom to copy, look not just at the sheer number of followers but also the amount of real capital these followers have invested with the trader. A high number of followers with significant capital suggests confidence in the trader's abilities. On the other hand, if there are only a few copiers, it may either signify a lack of confidence or indicate that the trader is still relatively new to the platform

• 2

  Returns. While past performance is not always indicative of future results, evaluating a trader's past returns can offer insights into their potential. Be wary of traders boasting extremely high returns as this might be a sign of high-risk trading strategies or mere luck. Analyzing monthly returns rather than just overall returns can provide a clearer picture of their trading style and reliability

• 3

  Number of trades. A trader's activity level can often hint at their experience and engagement. Those with numerous closed trades typically indicate a history of active, strategic trading rather than sporadic or random activity

• 4

  Risk score. Most copy trading platforms will provide a risk score for each trader, ranking them based on their trading behaviors. A lower and stable risk score typically implies a trader who adopts a more conservative and possibly more sustainable approach

• 5

  Consistency. It's essential to focus on traders who have demonstrated consistent profits over a significant period. This consistency suggests they employ a sound strategy that has proven effective over time, rather than relying on occasional big wins or pure luck

• 6

  Open trades. A quick review of a trader's currently active trades can provide insights into their ongoing strategies and risk appetite. Traders with fewer open trades but with a high win ratio (like 60-80%) tend to demonstrate strategic selectiveness and prudence in their decisions

• 7

  Drawdown and winning trades. A trader's drawdown-how much they lose from their peak before achieving new highs-can indicate how well they manage risk. Lower drawdown percentages show a trader's ability to navigate market downturns and bounce back from losses effectively

• 8

  Trader level. Platforms usually rank traders based on a combination of performance metrics, engagement, and longevity on the platform. Those ranked at higher levels have typically demonstrated consistent results and reliability, making them potentially safer bets for copiers

How much can I earn?

Your earnings as a copy trader can depend on various factors. As a beginner, you will find it difficult to copy the trades of professional traders, hence, you may end up making low earnings. However, after choosing and copying professional traders, you might earn more.

As it said above, usually the best professional traders can make from 5% to 30% per month, however such a range is not constant. Remember that the risk of loss remains in any kind of investment.

Is Forex copy trading risky?

Yes, Forex copy trading has inherent risks, much like other investments. A significant factor determining your risk is your choice of broker and trader. When diving into copy trading, it's essential to understand that while you control the amount you invest, the trader's decisions are out of your hands.

Hence, it's advisable to diversify among various managers and set limits like a maximum drawdown to manage potential losses better. Market dynamics can sometimes result in the trader suffering losses, which would directly impact your invested funds.