The idea behind copy trading is simple: use technology to copy the real-time forex trades (forex signals) of other live investors (forex trading system providers) you want to follow. So, every time they trade, you can automatically copy their trades in your brokerage account.
Most countries allow copy trading as long as the broker is properly regulated. When you open an account with a regulated broker to invest in the stock market, there are procedures in place to make sure it is legal for you to trade (depending on your country of residence).
How do you copy trade?
With copy trading, a trader (called a "signal provider") shows other traders how to trade in real time (users). Users can automatically copy the trades of the signal provider in real time using a copy trading platform. Each copy trading platform has controls that investors can choose to use to keep their money safe. For instance, traders can choose how much of their capital to risk and which signals to follow.
Is it a good idea to copy trade?
Even though automating your trading strategy might seem like a good idea, copy trading still requires active account management. It's not a quick fix or an easy way to make money. Copy trading isn't for everyone, but if you use it right, it can help you diversify your portfolio, and the best copy-trade brokers will give you tools to help you manage your account.
Whether or not copy trading is a good idea for you depends on your preferences, overall goals, willingness to take risks, and how much of your portfolio you plan to put into it. You'll still have to choose different risk/reward parameters, maximum drawdown thresholds, and which providers, if any, to copy.
Copy trading still requires work to set up because it is considered a self-directed account in most countries, unlike a set-it-and-forget-it investment fund or other passive investments where other people make investment decisions for you.
How do you copy a trade?
To start copy trading, you must first choose which investors you want to follow on the copy trading platform and then give each of them a certain amount of your account balance.
For example, if an investor you are copying buys 100,000 units of the EUR/USD currency, you will see the same proportionally-sized trade in your account, depending on how much you put in (the trade size in your account may be smaller or larger, depending on how you configure your account when initially subscribing to copy each investor).
How do I choose the best forex copy trading system?Features in MTX are what make the exchange platform special. Our special trade and the PAMM CopyTrader system are both made to help traders find new ways to make money.
It is very important to match your risk parameters with the investment strategy that fits your goals best. A more cautious investor, for example, might choose a system with a lower average loss per trade compared to the average profit. A more risk-taking investor, on the other hand, might choose a strategy with higher volatility, which means there is a higher chance of losing money, but also a higher chance of making money.
There are hundreds or even thousands of signal providers on many new copy trading forex platforms. Because of this, it can be hard for traders to figure out who to follow. So, you should always do your research, start with a small amount, and never put more money at risk than you can afford to lose.
There are hundreds or even thousands of signal providers on many new copy trading forex platforms. Because of this, it can be hard for traders to figure out who to follow. So, you should always do your research, start with a small amount, and never put more money at risk than you can afford to lose.
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