What Is Copy Trading?
Copy Trading is basically a way to let amateur traders, or complete beginners, automatically copy the trades of more experienced traders.
Also sometimes known as ‘mirror trading’ or ‘auto trading’, it lets you browse through the profiles of experienced traders, and see their trading statistics.
For more experienced traders, it can enable them to step away from their screens if they need to, as all trades are automated.
By linking your profile to another traders, you copy all of their current positions on the market, and any action they make henceforth. If they open a new trade, you open a new trade; if they close, you close; if they win, you win and sadly – if they lose, so do you.
This doesn’t mean that you don’t have any control over the outcome. In most platforms, once you’ve established a connection, you still have the ability close trades, open new ones and otherwise moderate the overall outcome. However, by copying another trader, you can easily make money based on their skills.
How does copy trading work in Forex?
There are two types of persons involved in copy trading activities: Investors and Professional Traders.
1️⃣ Investors/Newbie/Loss Traders.
- First step first, investor needs to open a copy trading account in their selected broker’s website and invest a certain amount of fund. Then, they can browse through the names of available professional traders (usually called strategy managers/providers) and decide which one to follow. Investors are free to decide the amount of money they allocate to the professional trader. Later, all of the trades will be copied and automatically calculated based on the proportion the investors have allocated.
2️⃣ Fund Manager.
- If you are an experienced trader who fully understands how Forex trading works, you can join copy trading as a Professional Trader (or Strategy Manager/Provider). Your job is to formulate the best trading strategy and appropriate trading actions, not only for the sake of your deposited funds but also for the sake of your followers’ who are copying your trades.
- Copy trading will give you the incentive to conduct your trading actions more productively – extra risks and more income. When your account is followed by the investors’ accounts, all your trading strategies, fund proportions, and future trading activities are copied into their accounts. Therefore, if you successfully close your trades with a profit, the same thing happens to all your followers’ accounts. They will gain profits, and there is also a chance that you will gain extra income by charging a special commission from investors (for example, you charge 15% of the generated profits in their accounts).
Advantages of Copy Trading
✅ Allows first time traders to familiarize themselves with the financial markets and gain the confidence to trade.
✅ Helps new traders to learn how to trade, by watching the actions of other, sometimes more experienced traders.
✅ Enables more experienced traders to take part in the market, even when they are too busy, and not able to invest the time and research they should normally devote to trading.
✅ Joining copy trading means that you will be assisted by people who have way more experience than you. This way, you can also be mentored by those professionals. You can even ask questions and review the reasons why they made certain trades.
How To Copy & Which Fund Manager To Select?
1️⃣ First, you will need to select a broker to partner up with. Choose a regulated broker like Xero Markets (Read: Why We Choose Xero Markets) that offers you security, a wide selection of assets and customer support.
2️⃣ Select a trader who best matches your goals to follow. You may join this telegram channel if you’re interested to Copy our trades: https://t.me/MonsunAsia_Copytrade
3️⃣ Decide your investment amount. Be balanced and don’t put all your eggs in one basket, so choose how much to allocate to each chosen trader if you have selected more than one person to copy. For further guidance,
4️⃣ The copy trading platform will then automatically replicate all the selected trader’s positions in your trading account.
5️⃣ Add more funds if you like how the trader is performing. Or, reduce your exposure to one trader and keep your portfolio diversified by not investing too much in a single trader.
6️⃣ There are no special fees to use the copy trading function, apart from the ones you pay the Fund Manager whenever they make a profit. This is called profit sharing.
⚠️ TAKE NOTE
Ultimately, it is not 100% guaranteed that copy trading will work for everyone because Forex trading is a risky business. Nevertheless, it is considered a great start for novice traders and a popular way of earning additional income for investors!
OPEN YOUR TRADING ACCOUNT WITH XERO MARKETS AND START COPY TRADING WITH US NOW! CONTACT US HERE: https://t.me/MonsunAsia_Copytrade