Is Copy-Trading the Best Way to Trade Forex ?

According to Statista.com, the number of people using social media is projected to hit 2.77 billion in 2019. What does this mean for online trading? Well, trading is not an exception. This is because, in the last 5 years, the social media influence has seen the fast rise of copy-trading.

As a matter of fact, many people like to make a profit with the least amount of effort, right? This is why many traders who don’t have the time or learning interest find copy-trading a breakthrough in the finance market.

What is Copy-Trading ?

Copy-trading is the act of replicating the trading strategies of expert traders. This implies that when they perform a trade, you do too. The concept of this kind of trading is that it is an attempt to copy the performance of the trader you are following.

How is Copy-Trading Different From Social Trading ?

Is Copy-Trading the Best Way to Trade Forex

source of image: FXDailyReport.com

Despite the fact that these terms are often used to mean the same thing, they are not the same. In a social trading platform, a trader is free to publicly share his/her trades. It does not necessarily involve copying techniques.

However, a number of social trading platforms have the copy feature, whereby investors have the option of copying trades shared by their preferred traders.

How Do You Find a Signal Provider?

While copy-trading might be simple to execute, finding the right trader or system to copy could be difficult.

To begin with, who is a signal provider? This is the person or the system that generates trades that you copy. There are platforms that offer signals, you only need to open a brokerage account on a third party.

The choice of your preferred platform largely depends on your investment amount and your level of experience. If you are a beginner, I suggest that you select a platform that offers both the signal and the copying mechanism. By so doing, you will be able to access everything in one account.

If you are a forex trader, then you certainly possess a brokerage account, hence, you can find signal providers to integrate with your broker.

Where Do You Find Signal Providers?

Here are some of the leading signal providers in forex trading:

eToro

eToro combines trading and social trading network in one platform. It enables its traders to share their trades thereby allowing investors to copy anyone’s trades within the platform.

This platform currently has the most users with over a million traders. eToro has been in the market for some time now which has earned them the badge of trust by its users and since it’s under the regulations of EU.

eToro gives you access to a wide range of products. To start investing with eToro you need $200 and the least amount that you can use to copy a trader is $100.

Ayondo

Ayondo is an all-in-one copying platform that is quite easy to use. Its users are able to browse traders in a bid to identify the trader they wish to copy, then drag them into their portfolio.

Starting with Ayondo might cost you a little more — 1000 euros to be exact. However, this gives you the opportunity of copying the top 5 traders which enables you to spread the risk.

If you are a beginner, don’t worry because Ayondo has got you covered with their demo account which is a simulation of how your real account would look like.

Wikifolio

Wikifolio is a new player in the industry that allows you to invest in trading techniques from experts.

Despite being a new startup, they have managed to raise money from investors, which means that it could be rising fast.

They provide a signal to their users and one needs to register with a third party broker to access their services. Investments start from as low as $100.

How Do You Make Money Through Copy-Trading?

Here are some of the best tips that you can use to earn a profit in copy-trading:

  • Copy-trading multiple people or signals,
  • Copying only real people or real strategies; forex robots are scams,
  • You have to be active; keen monitoring of account,
  • Set stop losses,
  • Target only moderate returns; between 10-15% mark,

How Do You Start Copy-Trading?

Despite the fact that copy-trading lowers the risks involved in forex trading, chances are involved. One of the best ways to start is through utilization of practice account to gain experience.

Since most of the platforms have practice accounts, I suggest that you should begin with them. Sadly, signal providers do not have practice accounts hence you need to pay in advance.

Conclusion

It is important that you first understand that all trades entail taking risks. You should only use the amount that you can afford to lose. By selecting the best signal providers and maximization of copy-trading tips, the risks involved are lowered. Prior knowledge of this information is useful in ensuring that your copy-trading experience is better.

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