HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
Vantage information and reviews
Vantage
85%
XM information and reviews
XM
82%

What is Copy Trading and how does it work?


Are you interested in trading the financial markets but feel like you don’t have the time to learn new strategies? Maybe you already trade but can’t find a way to take your trading up to a professional level, or perhaps you’re just looking for an easier way to improve on the strategies you are already using. If this is the case, copy trading may be for you.

Whatever your reasons, copy trading opens up a world of unique opportunities in the markets. In this article, we’ll explain what copy trading is and how simple it is to get started.

What is copy trading?

Simply put, copy trading allows you to copy trades placed by other traders. The basic goal is to find another investor with a proven track record, and begin copying their trades. Their success may continue and you will be on the winning side of things but if trades do not go in their favour then you will also be copying their losses. Remember to always monitor and keep up to date with the trading performance of the signal providers you are copying.

When we talk about copy trading, there are usually three parties involved:

How does copy trading work?

To be able to start copying someone's trades, first you need to open your own live MT4 trading account. This is the account you will use to follow other traders. It’s worth noting here that once you’ve got a live account, you always have the option to open additional sub-accounts, which gives you extra flexibility. For example, you could use one account for manual trading and another for copying trades.

Next, you need to link your live MT4 account(s) to the Copy Trading app. Once that’s done, you’ll be able to see a list of providers whose trades you can copy. Now it’s simply a case of clicking on a trader to view their stats – this includes things like their past performance, drawdown and the things they typically trade. While copy trading is especially popular in the forex market, it’s not limited just to currency pairs. Each provider or master trader will have their own expertise and preferences for what they like to trade, such as forex, indices, commodities, single stock CFDs, crypto CFDs (not available for FCA retail clients) and more.

Before you confirm that you want to copy a trader, you can adjust the overall risk settings to suit your own goals and risk tolerance. This is important because all traders come from a different starting point – for example, an experienced trader might have more money to trade and a higher tolerance for risk than someone who is only new to trading. The flexibility to follow top traders makes copy trading for beginners the perfect way to start in the financial markets – especially those who lack the time or resources to trade on their own – but more experienced traders do use it as well.

Either way, the ability to change your individual settings helps ensure you remain in control over how much you are risking on each trade.

If all you want to do is copy trades, there is no manual intervention required. You simply click ‘copy’ and your account will automatically start copying the trades of your chosen signal provider. If you would like further information on how to become a signal provider, our guide covers it in detail. You’re then free to go off and do other things while the app will keep running in the background. However, you should always keep an eye on your account, not only to track the performance but also to ensure that you always have enough margin in your account.

Which copy trading platform should I use?

The Axi Copy Trading app allows you to easily connect to your MT4 account and start copying a variety of traders. The in-built leaderboard will give you quick insights about the top provider's performance and help you in choosing the one that suits you. 

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. Furthermore, you can control your risk by either mirroring the provider's level of risk and position size or by setting a fixed size per trade.

You can download the Axi Copy Trading app from the Apple Store and Google Play Store now!

Can copy trading be profitable?

If you find a successful trader to copy, copy trading can certainly be profitable. However, trading in general is inherently risky and copy trading is no different. No trader wins every trade, and even though you might have picked them because they have positive results overall, the provider you choose to copy might go through a period of drawdown – meaning that you would be facing losing positions. One way to try and mitigate this risk is to use multiple providers, preferably with different trading strategies/styles to achieve diversification.

Advantages of copy trading

Discover four advantages of copy trading below:

Disadvantages of copy trading

Discover four disadvantages of copy trading below:

Is copy trading too risky?

All trading involves a degree of risk, therefore so does copy trading. However, it is your account, you have full control of it and you can adjust risk parameters to suit your own requirements. Even though you’re copying another trader, it’s always your responsibility to conduct due diligence and not just blindly follow someone because they have proven success in the past.

For example, the trader with the highest return might experience massive drawdowns or could have a very short trading history. Other traders might have lower returns, but demonstrate greater consistency. Unfortunately, there is no way to remove risk from trading, but you can help to reduce it.

What is the difference between copy trading and mirror trading?

Mirror trading and copy trading are similar, but there are some key differences. With mirror trading, you are literally copying whatever the master trader does, including the same position size they place on their trades. With copy trading, you are following the same trading strategy and the exact trades the signal provider is taking, but crucially you can adjust position sizes. This means that if you are not fully confident in all the trades of the master trader, you can reduce the size of your position on certain trades you follow.

#source


RELATED

What are defensive stocks and why you should consider them?

The market has fallen sharply this year, and investors have seen losses. Question: Can defensive stocks help hedge against risks? What are their advantages?

Mastering Gold CFD Trading: Your Comprehensive Guide

Few assets hold the allure of gold. It serves various roles – a hedge against inflation, economic fragility, or a counter to the US dollar's influence. Regardless of its driving force...

Common Trading Mistakes Every Trader Should Avoid

Trading in financial markets can be both exhilarating and profitable, but it's essential to navigate this world with caution and discipline. Many traders, especially beginners, often fall into common pitfalls...

MT4 Web Trading to trade Forex directly from your browser

The MetaTrader 4 (MT4) trading platform offers almost everything a trader needs for forex trading. Its powerful trading and analysis tools are what have earned the platform...

What Is a Market Maker?

Anyone who's generally familiar with trading has heard about buyers, sellers and brokers. But there's one type of market participant that often gets...

Why trade shares?

Why trade shares, continue to read and learn more. Trading shares involves buying and selling company shares listed on a stock exchange. Traders choose to trade shares...

What is forex and how does it work?

Throughout history, we have seen the transition of trading from one form to another. From the exchange of one material to another and this hasn't stopped for a moment...

Embarking on ETF Trading: A Beginner's Guide

Entering the world of Exchange Traded Funds (ETFs) trading might appear daunting to newcomers, but it's a surprisingly accessible endeavor, thanks to the abundance of online resources and tools available today...

Altcoins, Bitcoin, DeFi, NFTs: Various Types of Cryptocurrency Explained

According to the current running total on cryptocurrency price aggregator CoinMarketCap, there's over 9,000 types of cryptocurrency in the crypto market today...

Addressing Trading Biases: Managing Psychological Factors In Day Trading

In the intricate world of day trading and investing, psychological dynamics play a crucial role in shaping decision-making and overall success. Traders, regardless of their level of expertise...

How to Stop Exiting Trades too Early

One of the biggest struggles traders face daily is the temptation to exit trades too early. There are numerous reasons one might opt to close a trade too early, ranging...

IronFX: Leverage in Forex. Complete Guide

Leverage is simply borrowed funds that traders use to trade. In other words, it refers to the ability that traders have when opening an account with a forex broker...

Forex Trading - The Actual Financial Solution

Forex trading has proven to be a steady source of income for many traders across the globe. The amazing statistics in 50+ Forex & Trading Industry Statistics...

If you invest in stocks

Having a portfolio which includes shares of roughly 20 different companies almost eliminates unsystematic risks. Thus, the portfolio risk with one share...

The Moving Average Convergence Divergence (MACD)

The Moving Average Convergence Divergence (MACD) is a versatile and widely used technical indicator that offers insights into trends, momentum, and potential reversal points in the forex market...

What is a Fan Token?

With the invention of social networking sites such as Facebook, Instagram, and YouTube, you can now engage and connect with famous people continuously. The cryptocurrency industry...

Get Exposure in Amazon Stock Via CFDs: Insights for Traders

Amazon is unarguably one of the world's most successful companies. Amazon is a marketplace for vendors and buyers of different products from across the globe...

The Comprehensive Guide to Copy Trading

Copy trading, an innovative and adaptive strategy in the trading realm, offers participants the opportunity to emulate the trades of often more seasoned traders, all in real-time...

Understanding Copy Trading: A Comprehensive Guide

Copy trading, an increasingly popular strategy in the world of online trading, offers a unique opportunity for individuals to mirror the trades of experienced traders...

What is Spread, and Are You Better Without It?

Spread is a central element in Forex trading. Traders are keen to know and ask a lot of questions about it. While spread exists in various sectors of the financial market...

FP Markets information and reviews
FP Markets
81%
RoboForex information and reviews
RoboForex
77%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.