What is copy trading?
Copy trading is a technique in which one trader copies the other’s position when there is a requirement. The process works in the financial markets. It is a most suitable technique for the people who do not get enough time to do the trading and either do not have the experience of doing it independently.
Then these inexperienced investors/traders copy the opened and managed positions by some of the expert traders. But at the same time, once you wish to start copy trading, you should have a little basic analysis of what is going in the financial market. Then you can think of investing once you have identified it all.
The working of copy trading depends on when the traders open the position. This is done through social trading; for example, if one trader opens the position and then spread a word about this opening to the other traders whether they want to copy the same position or not.
The trader can do this, or also, there are automatic systems that can do the same for them. This trading helps the other customers spend very little time analyzing the financial market themselves. The market grows very fast. It needs somebody to monitor it from time to time.
Copy-trading has given certain reasons for the investors to invest in some other traders as it helps in:
- 1. Leaning ability: Copy trading can be one of the best ways for investors to learn about the market lacking expertise in trading. It might also open you up to learn the trading strategies and keep coming up with doubts if you have any.
- 2. Saves times: It is one of the best ways to save time for individuals who do not have sufficient time to study each second of the market. They can copy and then invest. It is highly recommended that a trader who does not know this should opt for copy trading instead of taking any risk.
- 3. Exposure to global markets: As an inexperienced trader, you might have a weaker portfolio of not getting exposure to the market across the globe. But if you do copy trading, you can get good knowledge, and then you also get access to the global market. As in trading, it is almost impossible to be an expert in all the global markets.
- 4. Diversification: If you have a diversified profile, you will not only be a trader with a strong profile, but you will also have a lesser risk. Copy-trading allows you to get along with the good traders and earn well from time to time. In today’s world, every trader will advise you to follow copy trading with the best tools.
The idea of copy trading has grown more popular with the growing years because it gives a chance to add so much diversification to your portfolio and get along and copy some of the best expert traders. It is also a cheaper way of trading in comparison the mirror trading.
It allows you to depend on the experts for training. But that does not determine there is no time you need to give; you will have to study the market and flow the best trader experts if you want to depend on them. Getting the best experts is itself a task. There might be times that you get to copy highly successful traders and get profit.
To clarify if there is any doubt about the legality of copy trading. The process of copy trading is legal and comes with laws and regulations, so you do not have to worry about this trading legality.
Ten Platforms for Copy Trading:
1. Zulu Trade
The reason why Zulu Trade should be amongst the top is the quality that it gives to copy trading and its services. The Zulu Trade gives the person a pro advanced system of signal provider and portfolio management. The person trading through Zulu Trade can also explore the different features if they wish to customize the signal replication. Zulu trade is fully free for you to join. You need to pay the spread on trades. It also provides a platform for the investors who have already made a brokerage account to link to a new account with the existing one.
2. E Toro
The E Toro is considered to be one of the best copy trading systems in this market. It was established in the year 2006 and is widely used by a large number of traders. The eToro is also ranked as one of the best social and copy trading platform for beginners who want simple usability. eToro deals in commodities, stocks, forex, social trading, indices, cryptocurrency, index-based funds, exchange-traded funds, stocks CFDs. You can also build a crypto-based portfolio on eToro. These are the platforms that you can use web trader, tablet, and mobile apps.
It was founded in the year 2011. FXTM is also a popular one for copy trading and is an international ECN broker who is very stable in Asia and Africa markets. If you want to start copy trading with FXM, you can start with a deposit of $100. It provides access to all the trading accounts you have from one place, making it more convenient. It also gives access to live price updates that help you stay updated with the real price updates around the market. One other major advantage of FXTM is it allows you to have commission-free trading.
AvaTrade is one of the best copy trading platforms based in Ireland and regulated by the Central Bank of Ireland in Europe. It was founded in 2006, providing a huge range of copy trading platforms for you to choose from. In copy trading, AvaTrade is considered the best for automatic real-time copying of trading from one trading account to another. It is also one of the global regulated best copy trading broker.
Meta Trade 5 was bought in the year 2000 with the best interface. This is considered to be a fast, easy, and flexible method of copy trading. It issues the MQL5 language. This copy trading platform gives you the benefit to open 100 currency or stock charts at a time. The 21 timeframes also help in the evaluation and analysis of the slightest price movement. It gives you access to great visual display, colour, and time frame as well. The analysis of the trade can be done very simply through Meta Trader 5. It might be a platform that is too advanced for beginners.
Darwinex is considered to be the most innovative platform for copy trading. The idea behind Darwinex is the same that the people can benefit from the other traders whose performance levels are high but there a slight change to it. In Darwinex, you are not allowed to copy other traders; instead, you need to buy the assets called synthetic assets and are also named Darwins. The asset price depends on the trader’s performance; the higher is the performance, the more price grows for the assets.
7. Hot Forex
This platform is best suited for beginners because they provide articles, videos, and live webinars to help you advance your trading skills. This free education attracts more beginners to this platform to learn about the trading market. They have a very prominent international presence, and their office spaces are spread around the globe. They also have this system of multiple awards for some traders, which are very attractive.
One of the biggest advantages of OctaFX is that it gives you space to open a demo account for an unlimited time. The second advantage it has is that it can start with a shallow deposit. It is amongst the winning platform for copy trading. It comes under one of the fastest execution speeds in the market. The only limitation is that the assets are limited, and the portfolio will not be largely diversified.
FBS was founded in the year 2009. With their money protection measures to keep your funds safe and sound, they also offer negative balance protection. Which says you cannot lose more than what you have deposited. They have won 40 awards since the year of their foundation and have received the Best EU Broker in 2019. The other two awards are backed up by the Best Broker in the Asia region and the Best bRoker in Indonesia, Vietnam, Thailand, and others. They are spread with 15 million customers from 190 different countries in the world.
10. NAGA Trader
Naga Trader was founded in the year 2015 with its major office in Germany and Cyprus. You can create an account with no least deposit once you are on for regular trading. Their one of the significant benefit is that they offer an extensive range of payment method. They also give varieties in Crypto deposits. It offers 5 risk management tools: Stop Losses, Take Profits, Limit Orders, Trailing Stop, and Margin Calls.
Here are some of the tips to start copy trading:
- Search and choose the best copy trader broker.
- Then create a demo account to habit and understand the market.
- Then choose the best copy trader who you wish to follow.
- The trader’s risk rating is significant, which you need to determine in terms of profit and loss.
That is all you need to do to start with copy trading.