Copy trading is among the methods a Forex trader, whether novice or otherwise, can make money from the world’s biggest financial market , on autopilot. Anyone who is new to trading can benefit from the copy trading platform, without having to learn about the market. Experienced and intermediate traders can profit from the ease that trades are made without the requirement for monitoring market conditions or registering as signal providers, and then have their trades copied, and increase their followers.
In the same way the two parties involved in copy trading will profit either way.
However, copying trades is not as easy as it may sound. Although it takes away the burden in market research or the fundamentals of analysis however, there’s an element of analysis to be completed.
In this blog we’ll explore the various elements of trading with copy that prospective traders should be aware of and that investors can take advantage of.
How do you define copy-trading?
Copy trading is a strategy that newer investors and traders use to test their luck within the Forex market, armed with the bare minimum of understanding and experience. For some, it’s an opportunity to invest in those who offer signal and strategy services who have experienced the game and are familiar is copy trading profitable with the strategy better than the people who offer it.
In order to begin it is necessary to join a small portion of your portfolio with that of a specific trader , and copy the trades. Follow the position they take or open.
You may choose to follow more than one broker and spread a portion of your portfolio as well as the risk associated from Forex trading. In the ideal scenario, you shouldn’t take on more than a total of 20 percent of your portfolio to one particular strategy provider, and you should not risk more than one percent per trade.
Now, you may be thinking, how does copy trading actually work?
Yes, it is. However, you’ll need to be savvy about the strategies you use to make sure that you earn greater than what you risk.
Why should you copy trade instead of trading manually?
If you’re brand new to Forex and would like to see professionals in the action
If you’re not in a position to follow the market the entire day, or even for the largest portion of the day, you can’t afford to miss a single
If you are only looking to trade in part-time work instead of full-time
If you prefer to have you let someone else trade on your behalf , you simply collect the profits
For certain traders, copying trades can be their path to understanding the Forex market more deeply and comprehending how the system functions. When they gain the skills and knowledge, and are confident the next step is to switch into manual trades.
Imagine copy trading as an exercise bike’s training wheels. They are used until you are able to master driving and are able to get rid of them. iq option review But in this scenario you earn while you are learning.
What is it that you mean by duplicating an entrepreneur?
You replicate the entire activities of traders until you decide that you do not want to be the follower of their strategies. If a trader initiates trades, so will you. If a trader is able to make profits, so will you.
Features, such as the allocation of risk and trade and risk allocation, are different for every copy trading platform.
In CopyPip, for instance, the CopyPip platform for instance trades are replicated proportionally. If your account balance is USD10,000, which is five times higher than the balance of the strategy supplier (USD2,000). If the provider of your strategy is able to trade 1 lot for USD100 an equal trade will be made to your bank account. It will allow you to trade five times the amount (5 tons) and earning five times that amount (USD500).
In contrast to mirror trading copies of signals typically permit you to alter the quantity and risk to trade. Based on the platform you choose to use, you are able to define a maximum loss acceptable to you.
What are the benefits of copying trades?
Trade like a professional even if you have no knowledge regarding the Forex market
It isn’t necessary to follow trades for the entire day, or look over the market before you trade
There is no need to delay a trade when you follow a full-time trader
You can reduce your risk while diversifying your portfolio by using several strategies offered by different companies
Watching the professionals in action can help you know the psychology that is behind every position a professional trader takes. What made them enter at this time? How did they escape? What made the decision be the way it was?
If you put in the effort to learn and study the most effective strategies, you may be one of them. Sooner or later you could become the strategist rather than a one who follows.
How do you choose the best copy trading platform?
When it comes to choosing the best copy trading platform, there are three main factors you must consider–lightning-fast execution, detailed information on strategy providers, and helpful customer support.
You need an application that allows you to trade without slipping. It is important to buy the currency at the most affordable cost. Even though you may not be purchasing it and you’re not buying it yourself, you need your service provider in a position to make the purchase to get the most effective result. A difference of just 1 pip is quite a bit dependent on your allocation to the portfolio.
It must include all the information you require in order to decide which trader you want to copy. From performance charts, to the maximum drawdown , you should have this information to aid you in making educated choices.
The most important thing is that whatever copy trading system you select should provide support at any time and regardless of how big your bank account is. If you are able to contact assistance 24/7, all the better.
How do you choose which trader to duplicate
We now move to the most important step–choosing the right strategy provider. As opposed to following people on social media there are financial risks that come with copy trading. That means that you shouldn’t duplicate signals from any trader in the market.
One of the aspects you need to consider is the performance of a trader over one year or more. The past performance may not be a guarantee of identical results in the future, but you’ll be able to see the trends in the performance of your portfolio in the long run.
Keep an eye out for steady returns, and where you’re guaranteed 3% growth every month for the following 12 months, as an example instead of gains over a 6-month period and losses for the next six.
It is also important to determine whether the provider of your strategy is trading and is risking real money. This will help you determine the trust they have in their approach and their capacity to minimize the risk.
What is the best way to identify a quality trade?
Although copy trading is an automatic process, it’s still important to be aware of whether the company you’re using is making good profits. It will be clear if it’s by a sound trading strategy, is able to be replicated and generally profitable.
What exactly does this mean?
The first thing you should consider is to make a decision using a trading strategy or a method that has been proven to be effective. The most successful traders have developed plans over time and follow it, even when they are on an unprofitable streak. Because they are confident that it will work.
The longer you’re watching a professional in action and in action, the more easily you’ll be identifying patterns. If it’s a successful one and you copy it, then the trades you copy will be as good.
You’ll want to make the trade to be repeated using solid strategies. For instance, a transaction is created due to the upward trend in the market as well as it is a pullback that has two legs in the direction of the moving mean (MA). When the exact price movement will occur in the near future, you may make a trade again.
Of course, you’ll need a trade that will bring you the most profit. Certain trades will not be profitable however if a significant range of your trades is profitable, then you’re on the right path.
Keep track of all trades you make and then review them to assess their value. Be sure to not evaluate the results based on the reasons you made the trade and if you could duplicate the same trade.
Where are you going from here?
Try copy trading
Learn more about Fullerton Markets’ copy trading system, called CopyPip Check out the way it operates and the special advantages you can gain from it.
The PROVIDERS page lets you look at different profiles of providers of strategies that can be copied. Click on a profile and you’ll be able to see the number of followers that an individual trader has.
Begin to create an income stream that is passive after you open an account.
Diversify your portfolio
As we’ve mentioned before you should spread your risk by using a range of reliable strategies and signal providers. If you can replicate more profitable trading strategies and strategies, you’ll be in a position to increase your wealth.
Reinvest your profit
While it could be tempting to cash out your winnings, you’ll gain more from investing it into bigger and more exciting trades. Yes, there’s an opportunity to lose an investment, but the cumulative impact of your profits can help you reap massive benefits. Make sure to set the stop loss so that you can protect your investment capital.
Increase your confidence when trading
Copy trading gives you the chance to watch closely the other trader and build confidence by doing it. This is how you can switch to a real account trading with real money.
Once you’ve gained more experience and experience, you are able to then shift into manual trading. We’ll give you education-based resources, such as weekly tips for trading to help you to boost your Forex trading experience.