Over the last decade, Forex trading has become established as a veritable means of earning passive income. However, due to the level of regulation, standardization and sophisticated data analysis involved, it can be a very cumbersome experience for beginners.
Industry reports show that over 70% of Forex traders lose more money that they earn from trading annually. And by all indications, the majority of the losers are beginners and less experienced traders.
As a result, trading platforms and market influencers often create helpful tools for traders who are new to forex trading to tag along and earn some money while they continue to learn the ropes.
One of the most efficient ways of achieving this goal is Copy trading. In case you’re curious, Copy trading is very useful for beginner traders who lack knowledge in a specific market and those who simply don’t have the time to conduct extensive research.
WHAT IS COPY TRADING?
Copy trading is an aspect of social trading in which a leading trader’s position is copied by another trader’s account. This can be done manually through spread of information across digital channels or by dedicated automated tools.
This means that anytime the leading trader opens a position, he shares the information and the individual traders may then choose to place the same trade. Hence, they also earn some income each time the more experienced trader makes a profitable trade.
POPULAR TOOLS FOR COPY TRADING
Copy trading has become significantly popular among Indian forex traders. So if you’re looking to begin forex trading, there are many tools available to help you copy deals of successful traders. The tools vary widely depending on the software provider or brokerage platform that you choose.
Here are some of the most popular copy trading tools among Indian forex traders;
v MetaTrader 5
Just like MT4, this one allows you to automatically replicate the trades of others via the MT5 trading tool. They will connects you with traders across continents and brokerages. This tool offer their service via fixed subscription.
v PrimeXBT Copy Trading
Here is another copy trading platform that allows both novice and experience traders to copy trade. This platform also help experts to monetize their skills, they do this by allowing others to copy their strategies.
This another platform that happens to be one of the best forex copy trading platform with office in India and some European countries. This happens to be one of the only few top forex brokers that gives fixed spread forex trading.
Here’s another copy trading platform which you can copy trade automatically. They will help you to find other investor’s statistics on the trading leader’s board, and this will allow you to choose who to copy so you can make profit in your trade.
Why Copy Trading Is Popular Among Beginners/Less Experienced Traders
1. Authorized practice: Since copy trading is recognized by the regulatory agencies which includes ESMA, CySEC, MiFID and the FCA, so getting a licensed and reliable broker will ensure safety of your funds.
2. You can start with demo accounts: With copy trading, you will find lots of brokers who would offer you demo copy accounts. This is a good deal for new traders who want to first test the platforms without committing so much capital.
3. Ability to diversify portfolio: Every copy trader gets exposure to new opportunities and trends which wouldn’t have been available. You can choose where and how to diversify your portfolio.
4. It’s convenient: Convenience is one of the major benefits of copy trading. This means you don’t have to understand copy trading to be part of the market. Likewise, you do not have to spend long hours conducting complex market research before opening trades.
We have been able to share with you how copy trading can allow you to experience the successes of trading by observing what trading experts are doing. But note, like every other legitimate investment endeavor, Copy trading involves some level of risk, especially as it gives you little control on the trades that you execute.
And if you decide to go with the auto-trading option, there’s always a risk of software malfunction or data entry errors. So, ensure that you play close attention to every trade that you open.