Choosing the best Copy Trading Forex Broker
At I AM A TRADER, we provide expert insights and resources to help you make informed decisions in copy trading and more. Copy trading allows you to automatically mirror another trader’s positions in real-time on a copy trading platform. You choose the amount to invest and copy their trades instantly, benefiting from their strategies without needing to intervene. Whether you’re into forex copy trading or copy trading crypto, the process remains the same. Although trades are automated, you maintain control, with the ability to close or open positions. Copy trading forex or crypto is ideal for those without advanced market knowledge, leveraging expert traders’ skills.
The Evolution of Copy Trading
Originating in 2005, copy trading began with algorithm copying. Platforms like eToro and ZuluTrade popularised it, allowing users to link accounts and automatically replicate trades.
How it Works:
- Select a trader based on factors like risk level, profitability, or followers.
- Decide your investment amount, diversifying across multiple traders if needed.
- The platform copies trade automatically in your account.
- Adjust your investment based on performance.
Typically, there are no additional fees, aside from the standard brokerage charges or trader’s commission.
What markets are suitable for Copy Trading?
If you want 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 can be very time-consuming.
It is very simple to trade in and out of different markets if you want more exposure in one over another. Perhaps you are less familiar with technology stocks but have always wanted to trade Apple or Netflix?
Let’s remind ourselves about the FX market, which is by some distance the biggest traded global market:
- The global FX market is worth $1,934,500,000,000
- This is 27x larger than the equities market
- 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.
Benefits of Forex Copy Trading:
- Leverages Expertise: You can mirror the trades of experienced traders without needing in-depth market knowledge.
- Time-Saving: It automates trading, freeing you from constant monitoring of the market.
- Diversification: You can copy multiple traders to spread your risk.
- Accessible for Beginners: No advanced trading skills are required to participate.
Risks of Forex Copy Trading:
- No Guaranteed Profits: Success depends on the performance of the trader you’re copying.
- Potential Losses: You may incur the same losses if the trader performs poorly.
- Over-Reliance: Relying solely on others can reduce personal growth in trading skills.
- Market Risk: copy trading, like with any trading in financial markets, involves putting some of your capital at risk. Inevitably, the market risk associated with this means you can lose that capital as the assets your chosen trader has bought and sold may prove unsuccessful.
Copy Trading Terminology
- Investor: This is the person who follows other traders to utilise their information or directly copy trades from them.
- Slippage: This refers to 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.
- Technical Analysis: This refers to charts which a trader uses to interpret historic price action and behaviour for future direction.
- Drawdown: Refers to 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.
- Mirror trading: Allows you to copy a trader’s actual strategies.
- Social Trading: Allows you to copy transactions made by one or more investors inside a trading network.
- Equity Line: This is the graphical representation of the signal provider’s account balance.
- Money management: This 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?
- Stop Levels: This refers to 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.
- Fundamental Analysis: This refers to the understanding of all news including economic and political to forecast future price movement.
- Signal Provider: This refers to the trader who identifies the signals to be followed by the investor or follower/copier.
eToro
Copy Trading Platform:eToro CopyTrader Regulation:FCA, CySEC, ASIC
Additional Information
Key Features: User-friendly platform, social trading, extensive community
Minimum Deposit: $200
Cons: Higher spreads
XM
Copy Trading Platform:XM Copy Trading Regulation:CySEC, ASIC, IFSC, FSCS
Additional Information:
Key Features: Low minimum deposit, diverse asset offerings
Minimum Deposit: $5
Cons: Limited proprietary tools
Pepperstone
Copy Trading Platform:DupliTrade, Myfxbook Regulation:FCA, ASIC
Additional Information:
Key Features: Multiple platforms supported, competitive spreads
Minimum Deposit: $200
Cons: No proprietary copy trading tool
AvaTrade
Copy Trading Platform:AvaSocial, DupliTrade Regulation:FCA, ASIC, CFTC
Additional Information:
Key Features: Integrated social trading app, diverse markets
Minimum Deposit: $100
Cons: Inactive fees
OctaFX
Copy Trading Platform:OctaFX Copy Trading Regulation:CySEC, FSA, FSCA
Additional Information:
Key Features: Low fees, intuitive platform
Minimum Deposit: $25
Cons: Limited regulatory oversight
IC Markets
Copy Trading Platform:Myfxbook AutoTrade Regulation:ASIC, CySEC
Additional Information:
Key Features: Low spreads, ECN execution
Minimum Deposit: $200
Cons: Complex platform for beginners
FXTM
Copy Trading Platform:FXTM Invest Regulation:FCA, FSC, CySEC & FSCA
Additional Information:
Key Features: Customizable strategies, beginner-friendly
Minimum Deposit: $200
Cons: Withdrawal fees
RoboForex
Copy Trading Platform:CopyFX Regulation:FSC
Additional Information:
Key Features: Very low minimum deposit, cashback rebates
Minimum Deposit: $10
Cons: Limited global regulation
HFM
Copy Trading Platform:HF Copy Regulation:FCA, CySEC, FSCA, DFSA, FSC
Additional Information:
Key Features: Flexible risk management, diverse instruments
Minimum Deposit: $0
Cons: Higher spreads for smaller accounts
Alpari
Copy Trading Platform:Alpari CopyTrade Regulation:FSC (Mauritius), FC, MISA (Comoros)
Additional Information:
Key Features: Low minimum deposit, good analytics
Minimum Deposit: $50
Cons: Limited global regulation
FP Markets
Copy Trading Platform:Myfxbook AutoTrade Regulation:ASIC, CySEC, FSCA, FSA
Additional Information:
Key Features: Tight spreads, advanced tools
Minimum Deposit: $100
Cons: No proprietary copy trading solution
Tickmill
Copy Trading Platform:Myfxbook AutoTrade Regulation:FCA, CySEC, FSA, FSCA, LFSA
Additional Information:
Key Features: Low spreads, fast execution
Minimum Deposit: $100
Cons: Limited educational materials
PU Prime
Copy Trading Platform:PU Copy Trading Regulation:Cyprus and Seychelles
Additional Information:
Key Features: Reasonable spreads, fast execution
Minimum Deposit: $20
Lite Finance
Copy Trading Platform:MT4/MT5 Regulation: FSC in St. Vincent & the Grenadines.
Additional Information:
Key Features: low spreads, fast execution
Minimum Deposit: $1
HYCM
Copy Trading Platform:HYCM Copy Trading Regulation:FCA, CySEC
Additional Information:
Key Features: Trusted broker, competitive pricing
Minimum Deposit: $100
Cons: Limited platform features
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