What is copy trading?
Copy trading is one of the best ways to utilize another trader’s expert knowledge. It also implies that you simply don’t lose any control over the result. You still have the capacity to close trades, and open new ones when you want. But by copying another trader, you'll possibly make cash based on their skills.
You don't need to have any input on the trades, and you get the indistinguishable returns on each trade as your chosen trader. It’s all in the title! Copy trading permits you to directly copy the positions taken by another trader. You decide the amount you wish to invest and basically copy everything they do automatically in real-time – when that dealer makes a trade, your account will make that same trade as well.
You don't need to have any input on the trades, and you get the indistinguishable returns on each trade as your chosen trader.
Most suited market to copy trading?
It is exceptionally simple to trade in and out of distinctive markets in the event that you need more exposure in one over another. Maybe you're less familiar with technology stocks but have continuously wanted to trade Apple or Netflix?
You can copy trade across all markets, including: FX, indices, stocks and Commodity markets. If you need to enter the FX market but are short of time, copy trading allows you to get involved without having to learn advanced technical skills. This could be exceptionally time-consuming.
- FX trading daily volume is 53x more than the NYSE
- Over 85% of FX transactions take place solely on the majors i.e. EURUSD, USDJPY, GBPUSD, USDCAD, AUDUSD, NZDUSD and USDCHF.
- The global FX market is worth $1,934,500,000,000
- This is 27x larger than the equities market
- Find out more about FX and how it works
Copy trading terms
There are some basic terms that you should know before stepping foot into the world of copy trading. We’ve put together a useful list right here:
| Stop Levels |
The price the trader chooses to close out a live trade in order to limit your losses if the market moves against you. Stop loss levels depend on the trading strategy. |
| Social Trading |
Allows you to copy transactions made by one or more investors inside a trading network. |
| Diversification |
Allows you to hedge trading risks by incorporating different trading strategies and assets in a variety of market conditions. This is a key benefit of copy trading. |
| Slippage |
The pip difference between the order price and the execution price of a trade execution. Due to market volatility or slow internet connection, the order price could change before it reaches the broker for transaction. |
| Symbols |
Currency ticker symbols are used in the forex market to represent the pair that is being traded. A currency, such as the dollar, is never bought or sold in absolute terms, but always in relation to another. |
| Technical Analysis |
Often means charts which a trader uses to interpret historic price action and behaviour for future direction. |
| Investor |
Is the person who follows other traders to utilise their information or directly copy trades from them. |
| Mirror trading |
Allows you to copy a trader’s actual strategies. |
| Money/Risk management |
Is the way to control risk and the most important factor is determining success or failure. How much should we assign to each provider and each strategy? |
| Signal Provider |
Is the trader who identifies the signals to be followed by the investor or follower/copier. |
| Fundamental Analysis |
Is the understanding of all news including economic and political to forecast future price movement. |
| Equity Line |
Is the graphical representation of the signal provider’s account balance. |
| Drawdown |
Is the fall in equity in a trader’s account, normally from a relative peak to a relative trough. It can be expressed in absolute terms or in terms of percentage. |
