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Trading 101: What Is Copy Trading?

The Axi Copy Trading platform can be used free of charge, with the benefits of the same ultra-low spreads and lightning-fast execution that are a feature of traditional MT4 trading. Some signal providers will charge a subscription fee for their services, while others might provide it free of charge. Although no prior trading experience is necessary for copy trading, doing so requires a solid understanding of CFDs, which are complex and high-risk financial instruments. Effective participation requires an understanding of leverage, margin requirements, and potential gains and losses. Mirror trading and copy trading are similar, but there are some key differences. With mirror trading, you are copying whatever the master trader does, including the same position size they place on their trades.

what is copytrading

Copy trading allows participants to replicate the trades placed by other, often more experienced traders in real time. The idea is to find a trader with a proven track record and begin copying their trades. This is a useful statistic that lets you know the average duration that the copy trader keeps a position open for.

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Even so, most top brokers can be connected with a copy trading service which will allow you to get into copy trading. As the name suggests, mirror trading entails mirroring a trading technique.As a mirror trader, one replicates other traders’ trading styles. Previously, traders searched for algorithms with excellent returns and copied the results after requesting access to these strategies. Followers can rank a providers’ entire investment history to view their trade size, investment technique, losing trades, profitable trades, and general success.

It offers traditional financial markets along with cryptocurrencies and virtual goods. After exploring the countless copy trading platforms on the market, we settled on eight that merit mention. Find out which copy trading platform suits your needs best by reading through each of the bios below.

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With copy trading, you are following the same trading strategy and the exact trades the signal provider is taking, but crucially you can adjust position sizes. This means that if you are not fully confident in all the trades of the master trader, you can reduce the size of your position on certain trades you follow. If all you want to do is copy trades, there is no manual intervention required. You simply click ‘copy,’ and your account will automatically start copying the trades of your chosen signal provider. Copy trading allows you to trade in a 100% passive manner – as your chosen investor will place all buy and sell positions on your behalf. Seasoned investors will often specialise in a specific financial marketplace.

what is copytrading

As soon as you start using this type of platform, you’ll be able to easily filter through trading results from experienced traders. This makes it simple to find the best fit for your trading style and risk tolerance. Nowadays copy trading is one of the most popular features for traders (according to the research in BeInCrypto Trading Community) and many exchanges offer such functionality to their users. Replicate the trading activities of financial experts and earn a passive income without spending time researching every investment you make. SmartAsset Advisors, LLC (“SmartAsset”), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S. SmartAsset does not review the ongoing performance of any RIA/IAR, participate in the management of any user’s account by an RIA/IAR or provide advice regarding specific investments.

How To Successfully Copy Trade

With little or no experience, you may not know the best trades to make, particularly during uncertain market times, or with most volatile forex currency pairs. Copy trading is also popular when it comes to trading cryptocurrencies, such as Bitcoin, Ethereum, and Litecoin. Just like copy trading in forex, traders can mirror trades on crypto pairings.

  • 81% of retail investor accounts lose money when trading CFDs with this provider.
  • US customers can get in on the act, but there are some limitations.
  • EToro does not charge any additional fees to copy trade – which is great.
  • They are also free to cancel an agreement if it does not suit them.
  • We do not manage client funds or hold custody of assets, we help users connect with relevant financial advisors.
  • Blain Reinkensmeyer has 20 years of trading experience with over 2,500 trades placed during that time.

The price the trader chooses to close out a live trade in order to limit your losses if the market moves against you. FXTM offers the industry’s leading FX trading platforms MT4 directly on your PC, MAC, mobile or tablet so that you can trade at your convenience whenever and wherever you like. Copy trading allows you to follow the trading activity of experienced traders, some of whom have years of expertise and know-how.