Copy Trading – How to Easily Trade on Forex
Forex stands for the largest financial market – The International Interbank Foreign Exchange. Foreign currencies are traded on this market, so this is an exchange market. Do you know why this market is so special? It is because approx. $4 trillion is traded daily here. Forex works on the principle where you use strategy-based feedback data, which gives you a strategic advantage, and this gives you an opportunity to capitalize your capital. This means that thanks to Forex, a foreign exchange market, you can start making money from home.
The article is informative; it is not an ad. It is written for trade enthusiasts and for those looking for some ways of how and where to invest their money.
The overall Forex success is 60% based on your psychology, 30% on your money management and 10% on your entry strategy. Up to 95% of beginners don’t survive their first year on Forex. The issue is not with their trading system, as many believe, but with themselves. Copy trading is here for people, who are interested in trading, for small traders, who know Forex and tried trading or for traders, who used to trade, but weren’t successful.
What Is Copy Trading?
It should be clear what this is just based on the term. This type of trading allows to directly copy positions entered by other traders and connect part of your trading portfolio (trading account) with them. By connecting your profile to other traders, you will simply copy all of their entered positions on the market.
Should the selected trader open a new deal, you will open it as well. Should he close the deal, you will close it as well. Should he close it with a profit, you will close it with a profit as well. Unfortunately, should he close it with a loss, you will lose as well.
However, this does not mean that you don’t have any control over given result. On many platforms, as soon as you are connected, you have the option to close deals, open new deals and manage your overall result. However, by copying other traders, based on their skills and results, you can (but don’t necessarily have to) make easy money, and you don’t have to know a lot about trading.
How Does It Work?
There are several ways of doing copy trading. It all depends on what platform you choose. However, the basic principles remain the same everywhere.
Trading is as follows: you invest part of your portfolio (your money) in given trader and begin to copy all of his deals. These deals are not copied at random; they are copied using the percentage method. If you are interested in diversifying your account, there aren’t a lot of pages that allow you to invest more than 20% in the “hands” of a single trader. This is a very good policy, because sometimes the traders look better than they actually are in given moment, and they can simply lose your money.
You invest in the knowledge and statistics of others. Like normal trading, copy trading is also based on tracking graphs and statistics (or at least it should be). But in this case, we track the current or long-term statistics of traders instead of stock exchange movements. It is very important to track the trader’s portfolio before you start copying him. You should know what currency pairs does he predominantly trade; how often does he trade and what risk management does he show.
In the beginning, it is important to choose the right trader, someone, whose trading strategies will suit you. You can learn a lot of important things from him. You have the possibility to track graphs and statistics just like he does; you can start to think like him and maybe in time you will become a successful trader as well. Then you can turn off copying and start trading on your own. But it takes some time.
Does Copy Trading Make Sense?
Of course, if you want to try something new, you also want to know, if it makes sense. Different statistics have focused on the success rate of copy trading. Based on them it was proven that traders that copy more experienced traders, primarily based on their statistics and portfolio, are more successful than traders trading on their own. The difference in their success rate is around 10%.
Why Is Copy Trading So Popular?
This type of trading is becoming increasingly more popular because it allows new traders to make money on Forex. In fact, there are many traders who create their portfolio “based on people”. This means that instead of investing in shares or trading on Forex on their own, they invest in an experienced trader.
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Forex Robots – Automated Trading Systems – in the article you can read a little about the Forex robots, how do they work and what are the pros and cons of such trading.
Brokers Offering Copy Trading
There are several brokerage companies offering copy trading these days. In this article, we will mention a couple of them, which in my opinion are worth the while. These are: Etoro, Instaforex, Tradesto and probably the best known and the most popular broker among the users worldwide, the recipient of many awards – IronFX.
If you are looking for an established and quality broker company, Etoro could be one of your choices. Etoro is the largest global broker in the world, trading in more than 140 countries around the world! In addition to classic broker services, Etoro.com offers also a social network to make things as comfortable for you as possible, where you can connect with other traders, share your experience, and much more.
The basis is a very sophisticated brokerage platform established in 2004. It is a clear trading platform, which you will immediately love. Whether you are a beginner or a professional, you won’t get lost using the platform of this Internet broker. You can trade smoothly in the currency pairs market with Etoro and build your own quality passive income.
Etoro.com offers a clear table of the most successful traders of given month. You can take a look at graphs and analyses of trader’s steps and thus select the best one. With copy trading you can entrust your “fortune” to the trader for as little as $20 and try to expand it.
When creating your account, you can look forward to two bonuses. You will get the first one with your initial deposit, up to $100. Furthermore, if you bring your friends to Etoro, you can get interesting commissions from them you can use to trade for yourself.
You would have a hard time finding a more quality online broker company than InstaForex. InstaForex is among the leaders of the online brokers market. It is owned by a Russian online broker operating with the most complex and very wide range of offers.
InstaForex.com offers the best trading conditions in addition to a perfectly developed platform system. These conditions have been praised by several of the world’s leading financial magazines as the very best.
InstaForex offers many financial tools for your deals to be the best and most profitable, which will make your online trading much easier. InstaForex also offers the most competitive swats across the broker spectrum. And this is what earned them the above-mentioned awards of world financial magazines.
This broker company trades at MetaTrader and offers excellent customer service that will help you even with the most complicated issues. Copy trading, which InstaForex.com polished to perfection, is also a given. Then it’s just up to you to select the right trader you will copy.
Tradesto is another online broker company, where you can use copy trading to make money. The Tradesto.com has a New Zealand license and it is suitable also for absolute beginners especially thanks to copytrading.
This broker does not have its own platform, it is leased from another company, which in no way decreases its quality. On the contrary, the platform is tried and true, so it’s great to work with both for professionals and novice traders alike. Tradesto also offers traditionally large market liquidity.
You can trade like with any other broker; 24 hours, 5 days a week. If you find the right trader you like to copy, you can make some really decent money.
The last broker company on which we will look in this article is Iron FX. This online broker was established in 2010 under a Cyprus license and the Cyprus bank institutions seek it out also. Ironfx.com focuses on Forex online trading, different currency pairs and commodities. Iron FX doesn’t even charge any fees for some of these investments.
Ironfx.com offers its services in more than 180 countries across Europe, Asia, Middle East, Africa and Latin America. This broker company has 26 offices worldwide.
Iron FX also prepared a high-quality e-book for novice and experienced traders alike, where you can find out about the most important things in the online trading world. You can also take a look at different videos.
Iron FX also offers resources for automated trading systems and it can offer a lot of different trading platforms to its clients, so it’s up to the customer to choose the best one.
Copy trading is most appropriate for inexperienced amateurs, who do not have much knowledge about Forex trading and want to learn from more experienced traders.
I recommend you to pick a couple of experienced traders and follow their statistics before you start any trading. Do not rush to choose the right trader. It is very important to choose the one, who is successful in the long-term and whose trading strategy will fit you the most.
It’s hard to advise which broker company you should choose. Each one of them has its pros and cons. It may be the best to try all of them out and pick the one that fits you the best afterward.
You didn’t find in this review what you were looking for? Then try to take a look at the discussion forum. Maybe there you can find some interesting information about this topic.
Have you already tried copy trading? Do you have experience with one of the above-mentioned brokers? If you do, share your experience and join the discussion.
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My name is George and I currently work from home as a freelancer for a PR agency selling advertising. I also freelance as an online marketer for an e-shop, and I am actively involved in creating this website. I am always looking for interesting opportunities on how to make money online. I share my findings with my readers on this website. I consider this to be my hobby. I hope, that you can find some legitimate work from home, or perhaps you might be able to earn a little extra money.