If you are interested in Forex, then you need to learn about trade copiers. Even if you decide not to use one, it is essential that you at least learn about how they work.
Trade copier software can be one of the best ways to get started in Forex as an amateur, because it gives you direct access to the trading of professional Forex traders. This can help you diversify your investment accounts, so the trading process is not entirely up to you.
Without some form of trade copier, you will be learning on your own, but that can be a long and expensive process. Allowing professional traders to trade for you gives you an opportunity to earn while you learn.
In this post, we will show you how this powerful software works and how you can leverage it to your advantage. We will also give you the advantages and disadvantages, so you can decide if it is for you or not.
What is Copy Trading?
Copy trading is the practice of linking your trading account to someone else’s account, so that your account carries out the exact same trades as the source account. Hopefully you are copying the trades of a professional trader.
Copying your Uncle Bob’s trades might not be such a good idea…no matter what he says.
It does not need to be the same amount of money that the professional has in his/her account. This is a huge advantage because most people don’t have that much money, when they first start out.
Most copy trading software works on a percentage basis, so your account trades the same percentage of its bankroll on each position as the target account. Be sure to check this before you sign up for a signal service.
All of our signals and managed accounts do this.
Benefits of Copy Trading
Copy trading allows you to directly benefit from the experience of professional traders. Wouldn’t it be great to have George Soros trade for you?
He is not one of our traders, but you get our meaning. Our traders have been doing this professionally for years and we have done our due diligence to make sure that we only bring you traders who we have complete confidence in.
At some point, you may also choose to give up on trading for yourself. There is no shame in that, trading is difficult and the generally accepted stat is that 95% of traders fail.
However, by using trade copier software, you give yourself the opportunity to participate in the Forex market, without the stress of trading for yourself. If this sounds good, our complete guide will give you more details on how to leverage copy trading.
When you are using copy software to follow a trader, you can’t be sure that they will actually perform well at any given time, no matter how good their reputation is. Past performance does not predict future results.
That means you need to pay attention to your account. Copying trades is more like cruise control than autopilot.
You should check your account statement once a month, to be sure that you are getting what you expected. Remember, there will be losses in trading. Sometimes, there will be extended periods of losses. But at the end of the day, that is part of the game and you will have to deal with it.
However, if you feel that the losses are way outside of what has happened in the account in the past, then you can choose to reduce your exposure in your account, move your money to another account or close your account.
Many times, taking out some of your gains can be a great strategy for keeping the money you make in your account. Opening an account or adding more money when an account is in a drawdown can also be a good strategy for maximizing your returns.
Websites that Utilize Copy Trading
There are many platforms and forex brokers that offer copy trading as a feature. It has become more common and popular, because it is so useful to beginning traders.
However, not all of these sites provide the proper guidance for how to use copy trading. They simply market it as a feature without informing traders of the potential risks.
This is problematic, because the people who are most likely to use and need copy trading are beginning traders without much experience. They are the ones most in need of information, but sites like eToro and MyFxBook don’t always tell the whole story about copy trading.
Many of the traders on these sites are random people from who knows where. There is no vetting process on these sites and that is why there are thousands of traders that you can copy trades from.
We screen all of our traders and that is why we only have a few. We bring you the best of the best.
Copy trading can help you diversify your investment portfolio. But they don’t come without some caveats, so you need to understand the potential disadvantages of copy trading before you risk any money on it.
Many people do very well with copy trading, but just like anything else, being informed is much better than going in blind.
That’s why our ebook is so valuable. It’s totally free and it will give you all of the background you need to get started.
Again, you may choose not to use copy trading in your portfolio. It’s not for everyone. But we want you to have all the facts and make an educated decision.