Forex Copy Trading – Is It Profitable?

Forex copy trading, also known as mirror trading or social trading, has been gaining popularity over the past couple of years. However, if you’re a beginner seeking to venture into this field, you might be wondering just how profitable it is.

Stick around to learn everything you need to know about this type of trading and how to become a successful copy trader.

What is Forex Copy Trading?

Copy trading, as the name implies, is a forex investment strategy where a trader copies the trades executed by a more experienced or successful investor. Copy trading aims to attain the same positions as the trader you’re copying.

The history of copy trading goes back to 2005, when financial market traders copied strategies developed through automated trading. Initially, traders could only copy the strategies of other traders. However, as the strategy developed over the years, traders could eventually copy the trades in other investors’ personal trading accounts.

Today, there are various ways you can employ copy trading. For instance, you can copy the entire transaction history of another investor, including their trade entry, stop-loss order, and take-profit.

Is Copy Trading Legal?

Yes. Copy trading is legal in many countries and jurisdictions worldwide, as there are no legal statutes barring signal providers from sharing trading signals, opinions, and knowledge. On the other hand, investors on trading platforms accept the terms and regulations put forth by the forex broker, which includes the right to have their trading signals shared with other traders.

With that said, you should only work with copy trading forex brokers that are licensed and regulated by a recognized body.

How to Become a Successful Forex Copy Trader?

If you’re looking to start forex copy trading, here is a simple step-by-step guide on how to do so:

1. Choose a trader that best matches your goals. Some of the parameters you might want to consider when picking a trader include their number of followers, risk level, and their return on investment.
2. Decide how much you want to invest in your portfolio. It’s best to spread your investment among several traders rather than one, as this will help you manage your risk.
3. The copy trading platform will automatically copy your selected trader’s position into your trading account.
4. If you’re pleased with how your trader performs, you can increase funds in your trading account and continue diversifying your portfolio.

What Are Some of the Best Copy Trading Platforms?

To begin forex copy trading, you’ll need to find a reputable and reliable trading platform. Here are a few popular copy trading apps you can sign up on:

• NAGA – This platform requires a minimum deposit of $50 with 0.01 pip spreads
• B2B Broker – The minimum amount to trade on this platform is $20,000, with monthly fees of $2,000.
• Ava Trader – This app requires a minimum deposit of $100. You will also be charged a $50 fee for account inactivity.
• ZuluTrader – This platform charges $21 per investor with spreads starting from 0.01.