Forex copy trading has been around for quite some time now and though many vouch for its safety and its use, it has not taken off like most would have expected it to. There are many reasons for this, some of which we will be discussing during the course of this article but the most important reason is the fact that there aren’t many successful retail traders around and those that are successful, simply do not want to share their successful trades or strategies.
It does make sense in a way as they do not want to share it due to the fear that it might lead to it losing its efficiency and market edge as more and more begin to copy the trades and make use of it. So there have been many ventures built around this concept and there are few that continue to exist to this day but nothing has quite captured the imagination of the market as a whole.
What is the Best Copy Trading Platform?
As mentioned before, there are still a few forex copy trading platforms being run successfully and many brokers also have such platforms built for their own clients. The one that is quite famous and has been around for quite some time is Zulutrade. It can be said to be one of the copy trading platforms and your account will be safe there as long as you choose the right signal provider.
They list out all the signal providers on their platform along with the performance data and it is up to you to choose the right one based on your risk and return appetite. You can also gain some insights into the trading strategy used by each of the traders and this would be helpful for your own trading in the long run. The foreign exchange market is a difficult one and there are many scammers out there as well and so you must be careful in not only choosing the right platforms to copy trade with but also the right traders to copy from.
This is different from mirror trading which is basically a straightforward one-to-one copy of the trades. On the other hand, in copy trading, you would be able to customize your trading by choosing multiple traders and then allocating a specific amount of equity on each of the traders so that you can basically spread out your risk.
Why Copy Trading?
When you choose to go for a forex copy trading service, you must be clear on why you want it in the first place. There are several ways to trade and delve into the forex market. You can either trade on your own or if you are not very confident of doing that, then you can see whether there is any signal provider who gives profit forex signals. If there is, you can use those signals.
Those who go for copy trading are generally those who do not have the time or the skills to learn forex trading on their own and hence seek the help of the forex copy trading software so that they will be able to get some profits into their accounts without spending too much time or effort. Nothing wrong with that as long as the traders understand what they are getting into and are ready to take the risks involved with a pinch of salt. Copy trading is very easy to do as once you choose the right traders to follow and also set the equity correctly for each, you should be able to slowly see your account grow in due course of time. Of course, the challenge would also be to find the right traders to copy from and this is where many people fail and they blame the traders and the copy trading system for that.
Factors to Consider When Choosing a Copy Trading Broker
First of all, see whether the copy trading broker is a reputable one. Watch for the reviews and ratings online and offline as well and decide whether they are someone who can be trusted with your money. You need to remember that if things go wrong, then it could mean that your entire account blows up and you don’t have any money left for trading. And since you won’t be monitoring the trading always, this could happen when you are away and things could get out of hand pretty much quickly. So, make sure that the broker is reputable and has been in business for a long time.
Next log into the website ad sees what kind of traders and results that they have to show. Some scam websites advertise great traders with great results but as there is not much verification anywhere, it is likely that the traders are shady and aren’t very good or maybe they are even bots. This you need to analyze very carefully to make sure that the traders are genuine and the performance data is also something that can be trusted.
Next, see what kind of risk management that the platform or the broker has. Since you are going to leave the platform and go about your work and not monitor the trading very actively, it may not take much time for your account to blow up very quickly when things start going wrong or when volatility increases. In such cases, you need to have certain measures at the platform or broker end that will ensure that you will be able to regulate and control your losses. There should be measures to close all trades when things start going wrong and also measures to control the risk. If the platform does not have that, then it may not be right to continue over there.
The above are the basic things that you should be looking for in a city trading platform apart from it have a good UI, being user friendly, providing you a wide choice of traders to copy from, etc.
How to Successfully Copy Trade
How successful you are in copy trading is likely to come down to what choices you are going to make. Right from the first stage, you are faced with a lot of choices. Whether you want to copy trade or self trade or signal trade is a choice that you need to make. Once you have decided to copy trade, then you need to choose the right trade copier forex broker platform for you to begin trading. As explained earlier, choose the reputed ones, ask around among your trading circles to find the right one after due diligence.
Once you have chosen the right trading platform for copying, then you need to ensure that you copy from the right traders. In copy trading platforms, you have a wide variety to choose from and you can also usually copy from multiple traders. So do some risk analysis, find out traders that suit your risk parameters and style and ensure that you spread out your risk. Start with a small account and see whether the trades that are happening and the returns that are being generated are similar to the data that had been presented to you when you signed up. If all that is good, you can always top up your account and aim for more. Do remember that it is a long marathon, like anything associated with FX trading and it is important for you to be patient and ensure that you choose and also wait for the trading to happen and a bit of trading history to be generated before you jump to any specific conclusions in the long term.
So, as with everything that you do, perform due diligence. Copy-trading can be incredibly easy if you do it in the right way. But it can also lead you to huge losses if you do not do it the right way. If you end up at the wrong platform or if you choose to copy even one trader who does not trade well, then your entire account balance would be at a risk and you could see your account blow up in a jiffy. You need to be very careful about your choices and once the right choices are made, make sure that you wait for the results to flow in rather than making decisions on a whim and chopping and changing the traders that you copy from.
If you take care of the above points that we have mentioned in our article, then you should be in pretty safe hands and you should be able to make some good profits by doing copy trading. On the other hand, use the time that you save to learn trading yourself so that you will also be able to self trade shortly as you cannot rely on copy trading to keep giving you the profits and the returns that you need all through your life. There is nothing that can match the joy and satisfaction of achieving success through self-trading and so do make it a point to keep learning from the more experienced traders and ensure that you continue to hone your skills as a trader in the time that you do copy trading. This is the only way for true, consistent, and long-term success in the trading business.