In order to do this, you will first need to spend some time researching a copy trader that meets your long-term financial goals. With that being said, the trader has an average holding time of just 3 days – which illustrates that he is more of a short-term swing trader. This is further highlighted by the average number of traders that the individual places each week – which stands at just over 12. Marco Monserrati – or ‘Abbroush’ as he is known on eToro, has a track record of making consistent, low-risk gains. In particular, this copy trader likes to focus on equities and funds. As such, your portfolio will be lively throughout the trading day. Whether you can afford to take the high risk of losing your money.

  • The reward schemes serve to stimulate traders to allow others to monitor and copy their trades instead of trading privately.
  • One of the important processes in copy trading is the signal replication process.
  • This also applies to trades that are carried out automatically, which is why it’s best to copy only US traders.
  • However, like all things related to trading, there is always the risk of losing your funds, as no one can read the future.
  • For beginner traders, it is a good tool to generate trading income, but they must be sure the person you are copying knows what they are doing.
  • Copy trading is a way to automate your trading by copying the trades of other traders.

In a nutshell, eToro will automatically assign a risk rating to each and every copy trader. The score itself is calculated based on several factors that are linked to the trader’s activity. At eToro, you will have access to two asset classes that yield dividends – stocks and ETFs. If regular income is something you are looking to achieve on top of capital gains, then you are best off choosing a copy trader that focuses on the aforementioned assets. Copy trading is also suitable for those of you that seek a liquid investment. By this, we mean that you will always have the option of cashing out your copy trading portfolio at the click of a button.

What is Copy Trading?

You can look after the decisions of others, but the risk is not dodged away. Social trading allows investors to learn and contribute to the community, and it provides access to numerous investing resources. Copy trading methodology allows traders to follow and replicate successful and profitable traders with a proven track record. Copy trading works by relying on social networks and social trading systems. Copy trading is popular with traders who lack expertise in a specific market and those who have limited time to commit to trading. I’ve tried, tested and reviewed over 100 products and services in the forex, crypto and stocks industries over the past decade, making the mistakes so that you don’t have to.

This is because you will be able to buy and sell assets passively – as your chosen copy trader will make investment decisions on your behalf. Everything that happens with copy trading either leads to a profit or loss. Once you have found your “trading soulmate”, you can simply follow that trader. It is very simple and helpful, since it also gives you a chance to copy pro traders with conditions suited to your needs. BingX does not have any minimum investment, which means that people can start copy trading with an investment as low as 1 USDT. It is not mandatory to use stop loss and take profit while trading. However, we strongly recommend using them as they’re a very useful risk management technique.

What is copy trading

EToro is one of the best copy trading platforms, and it offers a wide range of assets . The platform is based in Tel Aviv, and it was launched in 2007 by Ronen Assia , David Ring, and Yoni Assia. The copy trading feature was added in 2010, and it established itself as the world’s leading social trading network. If you are more risk-averse than the trader you are following, you can limit the risk per trade.

Fahad Alhajri  (Alnayef) – Hugely Profitable Forex Trader

All Principal Traders go through a strict audit to ensure outstanding performance and stable earnings. Copy trading is a great innovation tactic for new traders to enter the scary world of trading. Although it doesn’t guarantee success and profits, you can diversify your portfolio and manage risks according to your risk management policy.

What is copy trading

For example, you can view the traders ROI since they joined eToro. That is to say, when you click on a copy trading profile, you can view a range of thought-provoking statistics. In the sections below, we explore some of the key research factors that you should look out for in your search for a profit-making eToro copy trader. Don’t forget, you would only be able to realise the above gains if you were to exit your copy trading position.

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Traders can get access to trends or opportunities that are inaccessible without the assistance of other traders expertise. After receiving a signal, one can edit the trading settings and parameters to fit the current trades. IG International Limited is licensed to conduct investment business and digital asset business by the Bermuda Best Providers Of Copy-Trading Monetary Authority. Before you start copy trading, you should do your own market research – especially if you are unfamiliar with the way that a particular asset works. IG Academy and IG Community can help you here, with resources and message boards to bring you up to speed with anything that you feel you could know more about.

What is copy trading?

Seasoned investors will often specialise in a specific financial marketplace. For example, the most successful forex traders will rarely touch shares or ETFs. At the other end of the spectrum, long-term equity traders are unlikely to touch anything outside of the stock exchange scene. For instance, the above list shows traders who have been classified as more conservative. They are trading different asset classes or financial instruments, which means that the traders who want to follow them need to make sure that they are not expecting a huge pay-out. In case of conservative strategies, the lead traders always put low risk and are usually looking at a longer time horizon. 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.

Moreover, you can also make some money while continuing to learn from experienced traders you copy. You can stop being a copy trader in the future but in the beginning, no other way is more suitable for beginners with paper trading.

After you have found the trader to copy, everything else is automated. You can copy trend-following traders or choose to focus on range-bound environments. Ideally, copy traders put together a “portfolio” of different traders to copy, so that they will always have a few successful ones running. In this sense, copy trading can be a good idea for experienced traders looking to take a step back, but it is likely unwise for people just starting out. Not only should you make sure that the traders you copy have a solid risk management system, but you should also limit your risk per trade you copy. For example, you could choose to only allocate 3% of your funds to a certain trader or use a stop loss when the trader goes more than 20% into drawdown.

The platform registers over 2 million trades every month and has a monthly trading volume that surpasses $70 billion. This makes AvaTrade one of the best copy trading platforms for traders interested in all financial markets, not just cryptocurrency.

Social investing systems are highly functional because they allow Trader B to copy Trader A’s trades with a single mouse click. Copy trading requires a powerful trading platform, such as MT4 and MT5. Discover the range of markets and learn how they work – with IG Academy’s online course. At the same time, you would hope to get some experience and expertise in a market that you wouldn’t normally get exposure to. Founded in 2006, eToro is the leader when it comes to copy trading services. For Australia based clients, a Product Disclosure Statement and a Financial Services Guide for our products are available to download from our Legal Documents page.