Copy trading is a form of investing that allows regular investors to copy the trading behavior of others, whether they are “experts” or “retail” investors.
Usually, and obviously, these investors that allow others to copy them, get a return – it can either be a profit-sharing, fixed monthly fee or other fee type.
Copy trading requires little knowledge about financial markets – all you have to know is how to assess the investor’s performance and profile, to determine whether you should or not follow him/her.
However, this is HARD! There are probably good traders to copy in all these platforms, but it takes some time and skills to find them. Most of them are beginners with bad bankroll management skills and high risk profiles. You should be careful when choosing traders to copy.
Copy trading enables traders in the financial markets to automatically copy positions opened and managed by a selected investor, usually in the context of a social trading network.
Unlike mirror trading, a method that allows traders to copy specific strategies, copy trading links a portion of the copying trader's funds to the account of the copied investor.
Any trading action made thenceforth by the copied investor, such as opening a position, assigning Stop Lossand Take Profit orders, or closing a position, are also executed in the copying trader's account according to the proportion between the copied investor's account and the copying trader's allotted copy trading funds.
The copying trader usually retains the ability to disconnect copied trades and manage them themselves. They can also close the copy relationship altogether. Copied investors are often compensated by flat monthly subscription fees on the part of a trader seeking to copy their trades.
Does copy trading works ? Yes it does.
Is it really Profitable ? : Not exactly
Copy trading is more profitable to the Platforms and Popular investors than the small traders who copy.
Most of popular investors are morre LUCKY than skilled. They have made profits when CRYPTOS were going always up or when Stocks were going up.
Many Popular investors have a very high risk ratio: they will make money fast more often with crypto and then go down -20%, -30% or more.
When you copy a popular investor you are not getting the same price-entry as he got si while HIS stock are still green yours may turn red. Side advice : never copy open trades !
It is much better get educated about investing than making rich someone else. Yes : Popular investors earn money each time someone copies them.
Copy trading has become quite popular in recent years and many forex brokers have started offering it on their platforms.
Copy trading is OK if a regulator, or the trader doing the trading, allows you to copy, meaning the information is public. Front running and insider trading is illegal because you are taking advantage of non-public proprietary information. Knowledge which is public is ok to use because it’s freely available. For example, you can copy the portfolio mix of a fund that publishes it’s stock holdings. Publishing is in the public domain.
A lot of copy trading occurs now on social media. Because this information is discussed publicly online it’s considered freely available and not subject to regulatory sanction. The issue becomes more dire when a stockholder promotes a stock to rise, thus building volume to unload their shares in an illiquid market. This is called a “pump and dump” or false promotion and is illegal. Traditionally a promoter or stock analyst is supposed to document their holdings or declare any conflicts. Regulators are still grappling with social media platforms like “wallstreetbets”, where small investors are collectively trading in bulk. Technically, there is nothing wrong with this. As long as any information is honestly acquired from a public source and disseminated appropriately then acting on opinions is not illegal. In fact it could be argued that social media is providing a service since public discussion or disclosure of information provides more transparency and thereby market efficiency. Again the regulatory issue is with false promotion and how to objectively assess it.
While some forex brokers offer their own copy trading platforms, the majority of them support third party platforms.
Below, I have listed the names of popular forex brokers that supports copy trading, you can have a look:
ECFX (https://www.easycashbackfx.com/forex_brokers_reviews.html)
Since most brokers offer more than one platform you have a choice to try different copy trading platforms and choose the best one.
