Copy trading is a trend among new and skilled traders. In definition, copy trading allows you to copy the trades of other traders. So basically, if they open a new trade, you open as well. If they win, so do you. Traders who are less experienced see this system as a way to earn profits in the Forex market. If there are copiers, there are what we call strategy or signal providers. These are usually skilled traders who let others copy their positions for a fee.
So many copy trading systems are available in the market, so to help you choose the best one, we list down some of the key features a good copy trading system should have.
A Forex broker who offers a copy trading system should provide its clients with a monitoring tool that allows them to check the performance of strategy providers. The monitoring tool should display their profitability (winning rate), average monthly return, and overall growth. Obviously, you would want to pick a provider who has a higher winning rate.
Trade and Risk Allocation
A good copy trading platform has a flexible trade and risk allocation system. For trade copiers, you should be able to take full control of your funds. You should also be able to set your own acceptable maximum loss, as well as take profit.
Flexible Fee Model
For strategy providers, choose a copy trading system that offers more choices of fee model. This gives you more opportunity to grow your wealth. A fixed fee model can sometimes become a hindrance to reach your desired income.
Unexpected issues may arise, so it’s important that your copy trading system provider should be able to resolve them in a timely manner. Make sure that you get faster, smarter and personalized support from your broker.
Copy trading may be good for new traders as it allows them to make profits without much experience. But you may want to stop copying trades in the future when you learn how things work, and find your own way to the market.
Also read: Types of Forex Brokers in the Market