Copy Trading Guide: How to Copy Trade

01 Sep Copy Trading Guide: How to Copy Trade

what is copy trading

Dalvin Cook’s offseason signing should be viewed as an even bigger deal now. He agreed to a one-year, $7 million deal to join the Jets less than a month ago. But the 28-year-old ball-carrier brings a proven track record with four straight Pro Bowl seasons of over 1,100 rushing yards. The Jets held Bills starting running back James Cook to an average of 3.8 yards per carry. Aside from Stefon Diggs, who is one of the game’s best route-runners, no other Buffalo target managed more than 32 receiving yards.

  • Think of it as a way to get the most out of the forex market without needing to be there around the clock.
  • Copying trades is becoming increasingly popular as it allows traders with minimum experience to make money.
  • However, there is a manual way to copy trade by watching the portfolio selections your peers are buying and selling.
  • Simply put, copy trading aims at discovering successful traders who have a proven trading track-record.

Skilled traders conduct a thorough market analysis and avoid high-risk trades during volatile times. Illiquid market hours in forex trading or significant news releases tend to impact the market. This type of trading is becoming increasingly more popular due to the fact that it allows new traders to make money on the market.

Finally, copy trading allows you to get exposure to markets you are not familiar with yourself. In this, even a crypto trader can easily take advantage of the volatility in stocks or forex, without having to learn the ins and outs of the industry. In addition to copy trading tools, eToro allows for community discussion, which helps traders to learn from the traders they copy. Firstly, you need to understand the trading system of the trader you want to copy. Although you can select the amount you wish to invest, you have no control over the actions of the trader you are following.

You also need to be aware of other areas like what costs are included in the copy trader’s returns and is the bid/offer spread already included in published returns. Select a trader who best matches your goals to follow, by using sectors that benefit from rising interest rates the tools provided by the platform FXTM Invest to filter the available traders. Perhaps it’s their number of followers, or profitability, risk level, the total amount of funds they manage or their return on investment.

How to Select a Copy Trader at eToro

Milan Cutkovic has over eight years of experience in trading and market analysis across forex, indices, commodities, and stocks. He was one of the first traders accepted into the Axi Select programme which identifies highly talented traders and assists them with professional development. It’s worth remembering that you retain full control over your account, meaning you can pause or completely disable the copy trading for each provider at any time.

what is copy trading

Think of it as a way to get the most out of the forex market without needing to be there around the clock. So, whether you’re going to invest or trade, copy trading is something you really need to try. The risks still exist, however, so be cautious when setting your budget and choosing the right money manager. It is important to choose an expert trader to follow, then copy the trading positions.

High-risk strategy:

One important aspect to keep in mind; past results do not guarantee future returns. Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission. If you liked our article What is Copy Trading and How to Invest in a Copy Trading Portfolio, please give it a like and share with your fellow traders. As is the case with all online brokers that are in possession of tier-one licenses – you will need to verify your identity. The process takes just a couple of minutes with this broker, as it is able to validate your documents instantly.

Additionally, you also need to decide whether you want to copy the individual’s current portfolio only, or if you also want to mirror all ongoing trades. Not only because of its strong commitment towards regulation – but the fact that everything is 100% transparent. As we have discussed throughout our guide, each and every position that a copy trader has ever placed at the platform is publicly viewable.

What are the Risks of Copy Trading?

It has been prepared without taking your objectives, financial situation and needs into account. Axi makes no representation and assumes no liability with regard to the accuracy and completeness of the content in this publication. Allows you to hedge trading risks by incorporating different trading strategies and assets in a variety of market conditions. Copy trading is one of the easiest ways to use another trader’s expert knowledge. It also means that you don’t lose any control over the outcome.

For example, the news of interest rate hikes has caused volatility in crypto markets before, which could cause your position to get stopped out. Copying a trader that takes these factors into account will help you survive during times of uncertainty. For example, copy traders can profit from the market without having to spend much time on analysis. After you have found the trader to copy, everything else is automated.

Copy trading platform

To simply explain what a copy trade is, it’s best to imagine copying someone’s homework in school. You will copy other traders and rely on their experience and knowledge to gain profits. When a skilled trader you’re following buys or sells an asset, you automatically do the same in the retail investor account on a copy trading platform. It allows you to venture into the scary world of finances and potentially make some profits.

How to start Copy Trading: A Definitive Guide for Beginners (

Whether or not copy trading is profitable mostly depends on the trader you are copying. Most people have copy-traded at least once in their lives, by following experienced traders on Twitter or Discord into a trade. This way of manual copy trading is available for purchase as well, with many “influencers” acting as paid signal providers, usually in private Discord groups. The first rule in copy trading is to not select only based on the gains of the money manager but you have to monitor the performance over time. Another important tip is to avoid copying the money managers after they have achieved their earning peak.

The Copy Trading Process

If you use copy trading, you may consider copying multiple investors. One of them is copying the trade entirely including entry, stop loss and profit levels. Another one is to copy the trade while modifying it according to personal preferences and risk ratio, for instance.

Suppose you want to start trading in stocks, indices, or other assets. It can be challenging to know where to begin, especially since you lack experience. Gaining relevant knowledge takes time, effort, and, ultimately, money. While you are copy trading, it is likely that you will choose to copy the trades of an experienced, and profitable trader. Before this though, there are a few key steps that you still need to follow in order to set yourself up for success. There are a number of factors that will influence this outcome.

Just like normal trading, copy trading is based on looking at graphs and statistics (or at least it should be). However, in this case we are observing actual people instead of market movements. Its really important to look at a traders portfolio before copying them. You need to see their strategy, how successful they are, what risk management they exhibit and more.

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