Are you a novice forex trader looking for a portfolio that matches the incredibly amazing performance of the investing pros? Well, copy trading can help.
Copy trading dates back to a decade ago when some forex brokers launched the services for the first time. The developers combined the features of a social platform with its trading systems to conventionally help investors to copy trades.
That is the simplest idea of copy trading – to emulate the stock market trades done by the pros or the experienced traders.
Today, this form of trading has gained a lot of popularity, thanks to advancements in tech, increased internet speeds, easy access to financial news, and market analysis.
Here is what copy trading is, its advantages, and how it works.
What is Copy Trading?
In a nutshell, copy trading allows one to leverage technology identify active investors in the forex market that you wish to follow and copy their trading movements or real-time trading activities (forex signals).
During the process, you can buy when the investor buys, and sell when they sell. Consequently, when they adjust their stop loss, you emulate the activity as well on your trading account.
How Does Copy Trading Work?
Anyone can do copy trading on their own through a copy trading platform. The platform is the one that allows you to emulate the trading activity. Since the trades happen automatically, there is little you have to do.
To get started, here is a guide to help you:
- •Choose the right trader to follow
The key to successful copy trading is to choose the right trader in the trading platform whose trading styles yields good returns and have good profit factor. If your focus is on building you trading capital with minimum risk then you will have to choose some whose performance in the social trading platform shows a smooth return growth. MTrading copy trading dashboard is one of the simplest and easy to get started as an investor when selecting the performing trader to copy trade from.
While doing this, you might want to consider their profitability and that of their followers, the risk level, the funds they manage, as well as their return on investment. This way you know what you are getting into.
- •Decide on the amount you want to invest
This step is highly important, especially if you are following different traders — of course, you can’t put all your eggs in one basket. Make a decision on how much you wish to deposit in your trading account and how you’ll distribute the amount among each investor you follow.
In MTrading platform, you will have to open an investor account and then fund your account after verifying your details, like national identity card or passport among others items.
Also, ensure that there is enough money in your trading account to cover the activity.
- •Choose the right trading platform
There are several Forex copy trading platforms you can choose from. These platforms have different minimum deposits. As such, go with the one that agrees with your cash allocation. While at it, also ensure that it can seamlessly replicate the trading signals you desire from your selected trader.
- •Diversify your portfolio
Do not invest too much in a single trader. Aim at minimizing the risk; therefore, if the performance of one forex trader impresses you, you can inject more funds. Similarly, you can replace those that don’t perform well.
It is worth noting, however, that you will require separate accounts for every trader you choose to copy their Forex activity from.
Usually, there are no special fees charged for using the copy trading function; that is, apart from the small commission you pay whenever they make a profit. Otherwise, any brokerage fees that typically applies to a normal trade is also applied to copy trades.
Advantages of Copy Trading
There’s a plethora of advantages to copy trading. Here we’ll only mention a few.
For one, amateur forex traders or first-time forex market investors can easily familiarize themselves with copy investing. Through this process, they can understand how well the financial markets fluctuate and gain the confidence to wade through.
These market entrants also learn how to easily trade by observing and noting how the experts they follow act or respond to the market.
Also, copy trading creates a community of investors — both beginners and the experts — where they can exchange ideas and strategies on how to conquer the market and improve their trades.
This is not to forget that one can copy trade on various markets including foreign exchange, stocks, commodities, and more.
If you are looking to invest in any of these instruments, you need not stress yourself on analyzing the market or the various indicators. With copy trading at MTrading, you can leverage the abilities of other investors to increase your chances of success.
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