Copy Trading Easy profit or a big risk

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Copy Trading: Easy profit or a big risk?

If you want to make profit trading forex, you need to be smart enough to leverage on potential opportunities. To do this, you need successful forex trading hacks. Part of it is knowing the right tools and strategies that can make trading easier and more successful. This guide discusses forex trading profit hacks that help you to make money consistently in the market. If you follow the tips and put them into practice, they’ll definitely improve your trading results!

5 Simple ways to make profits in Forex

Forex Trading hack 1: Get organized and be disciplined

To succeed as a forex trader, you must, first of all, get organized and learn to practice self-discipline. You clearly need to know what you are looking for in the markets to be able to build an organized and disciplined trading approach around it.

Thus, ensure you know your trading edge and try to master it. Generate a trading plan. You require a forex trading plan; try to create it around the trading strategy you have mastered. There are a few ways to get this done:

Pinpoint your trading personality

There are four different types of trading personalities. Discovering yours can help you to trade your strengths and minimize your weaknesses. If you are a novice in the market, you may find it difficult to know your trading personality but these tips will help you to figure it out. You will fall into any of the following four categories:

  • The Now Trader: The now trader prefers to trade the market quickly and get out. He wants to get in, get his pips and exit the market. Now traders commonly trade with smaller time-frames, spend less time everyday trading and capture smaller pip numbers but may trade more frequently.
  • The In-The-Game Trader: These traders prefer to review the market every day, but take action that lasts long and aim to capture larger pip over a longer period of time. These groups of traders go for medium range timeframes and are cautious of reversals and analytical flaws.
  • The Adrenaline Junkie Trader: These traders only trade once, or a few times every month following major financial news like quarterly or earnings reports. This group of traders mostly engages in swing trading.
  • The Low Maintenance Trader: These traders follow the set it and forget trading approach. They trade with longer time frames by using trading strategies that help them win big over a long period of time which may last for many months. They only concentrate on safer trade choices that hold high-profit potential.

Establish a Personal Set of Trading Rules

Success in the markets is determined by how much control you have over your own trading habits. Knowing when to get in is important for making money, but knowing when to get out is equally as important when it comes to not losing money.

Knowing when to exit the market is an important rule to have, but it should be one of many that you utilize when you trade. You should have many rules that cover everything from your winning and losing percentages, to how much you risk per trade and more.

Set Your Trade and Go Away

Emotion is one of the reasons your trade fails . To deal with your emotions, you need to set your trade and let it be till when it is completed. If you view the chart constantly, each time the market fluctuates you’ll drive yourself crazy. When the market reverses direction you’ll tend to want to pull out too soon or over-correct the position and end up losing more money. You need to get reliable trading software and have faith in it. To avoid overreacting emotionally, only look at the trade when you place it and when you exit it.

Know the right time to trade

Get to Know the Euro Open Strategy. The European session known as The London Daybreak opens at 3 AM EST, and this session is massive for traders because roughly 75% of the entire Forex transactions occur during this session.

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This is also when the market’s highest highs and lowest lows will occur.

With the use of either your charting software or a market scanning tool, you ought to target the Euro session as your best time to trade.

Forex Hack 2: Learn to manage your risks

To achieve this there are a few things you can do, lets take a peak at them down below.

You place a trade order and set your stop and discover that you are consistently being taking out just prior to your big win. The solution is to always set a stop loss.

Stop-losses prevent you from losing all the money in your account in a single trade. You set a minimum number for the market to hit as soon as the market hits that number your trader would automatically exit on your behalf.

Alter your stop-losses as the market situation changes

As the market ebbs and flows, stop-losses get bigger. This volatility generates higher highs and higher lows, which could give higher profits to smart traders.

Smart traders alter their stop-losses to reflect the market. How you can correctly use a fluid stop-loss number is to move the minimum number based on the market movement.

When to move your stop-loss

Search for a high or a low that has two candlesticks to the left side and two candlesticks to the right which are higher or lower from that position.

  • A high commonly have two lows to the left and right
  • A low commonly have two highs to the left and right

Use Reversals to Your Advantage

Forex trading goes on 24 hours and is made up of 3 major trading sessions: the European, U.S. and Asian sessions. The European session has the most movement, which is followed by the U.S. and lastly the Asian markets. Frequently, the market will reverse directions when one session ends and the other starts. By trading these reversals, you are likely to capture the most pips.

Thus, if the European session is trending bullish, as soon as the American session starts to set in, it will start a reversal and the market will turn bearish.

By using this strategy you can identify the reversal points, leverage on the market movement and know when a market high or low could happen. With 3 trading sessions occurring every day, there is the potential for 2 reversal positions every day. This implies that utilizing a single strategy can determine how you view three different markets.

Forex Trading Hack 3: Trade in baskets

Follow the tips below to get it done:

You can Save Time and Multiply Your Profits by Trading in Baskets

This is a strategy that allows you to have it both ways and it involves selecting a currency and placing it into one of two sections:

  • The Control Section
  • The Pegged Section.

The control section is when the currency like the USD is on the left side of the slash of the currency pair – USD/CHF, USD/JPY etc.

The pegged section is when your chosen currency is on the right side of the slash like EUR/USD, GBP/USD etc.

The first step is to select a currency to concentrate on. As soon as you do it, you create your control and pegged baskets.

The next step is to conduct research on your chosen currency. Then, based on your research, you will get information on how your currency performs against the currency it is paired with. You can trade both bearish and bullish move at the same time when you split the currency pairs into baskets.

If for instance, you want to trade the USD and, based on your research, you’ve discovered that it is strong against the Swiss Franc, but weak against the Japanese Yen.

You would create a basket trade that allows you to buy the USD/CHF pair , and sell the USD/JPY pair .

This lets you trade bullish against the Franc and bearish against the Yen concurrently. Trading in baskets gives you the opportunity to make double gains.

Locate Your Basket data

The solution to succeeding by trading in baskets is to conduct research on the currency you have chosen. You should start this by using your charting software and studying candlesticks.

If a currency is growing in strength, you would check the charts to confirm the bullish uptrend. When the currency’s control of the currency pair rises, it has extra control.

Forex Profit Hack 4: Know your risk limit

Follow the tips below:

Never Risk More than 2% to 5% of Your Trading Account

A great forex management tip is to never risk more than you’re willing to lose. The amount of money you risk must be what you can comfortably living your life without it. We advise you to limit it to merely 2-5 per cent of your trading account.

Before placing any trade, have it at the back of your mind that every trade comes with some risk. You will not always win. You’ll definitely lose at some point but the key is your ability to properly manage this risk to give you the chance to have money to trade again.

If you are just beginning it is better to stick with trading risks of only 2 per cent of your trading account. You can increase it as you grow your experience but it must never exceed 5 per cent.

Identify and Trade Candlestick Formations

One of the trendier candlestick formations is the Head and Shoulders pattern. This occurs when a bullish trending market makes a peak and begins to retract.

The problem with this candle formation is that the market will frequently overcorrect itself and you’ll take a huge loss before you know it. To avert this it is better to trade with The King’s Crown pattern. With the King’s Crown pattern, you are trading beyond the “shoulders” of the Head and Shoulders pattern. As soon as the market takes out a low of support, it tends to bounce back up before the market finally falls.

Here is how to trade this pattern:

Label your highest point on the chart as labeled ‘A” and label the previous high as the “left tip.” The left tip is significant because it informs us how high the market was trading earlier which signifies to us how low the market will trade eventually.

Moving back to the A mark, you can draw a line from the fresh highest high to the new lowest low, the B position. Follow that trend to the next highest position to get to position C, and finally to the next low which is your “D”.

In this instance, what you need to do is to buy when the market starts to rally after the D mark. You won’t lose your trade until the market goes beyond the D to reach the newest low.

You know when this will occur because you know the value of the previous high before the start of the King’s Crown started (the left tip).

In instances like this, what you are trading is not the neckline but the breaking point beyond the lowest low. This extra movement in the market lets you see the true indication of the markets and could minimize your future chances of making losing trades.

Best Copy Trading Brokers in 2020

The ForexBrokers.com annual forex broker review (four years running) is the most cited in the industry. With over 50,000 words of research across the site, we spend hundreds of hours testing forex brokers each year. How we test.

The ascent of copy trading – also known as social trading, mirror trading, or auto trading – has been ongoing for over a decade. Thanks to social media and an increasingly faster web, financial news and market analysis propagate at lightning speed.

The idea of 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. This way, every time they trade, you can automatically replicate (copy) their trades in your brokerage account.

Best Forex Brokers for Social Copy Trading

Based on over 105 different variables, here are the best forex brokers for copy trading.

  • eToro – Best overall platform for copy trading
  • Pepperstone – Numerous copy trading platforms
  • FXCM – FXCM App store for automated trading
  • Darwinex – Unique social copy trading community
  • AvaTrade – Multiple copy trading platforms
  • HotForex – Full MetaTrader suite
  • FxPro – Full MetaTrader suite

Best overall platform for copy trading

eToro is a winner in 2020 for its easy-to-use copy-trading platform where traders can copy the trades of other users across over 1,900 instruments, including CFDs on popular cryptocurrencies. Read full review

Numerous copy trading platforms – Visit Site

Pepperstone offers a small set of tradeable products but provides forex and CFD traders with competitive pricing, excellent customer service, and one of the largest selections of third-party platforms, including numerous options for social copy trading. (73.6% of retail CFD accounts lose money.) Read full review

FXCM App store for automated trading

While its range of tradeable markets is narrow and pricing is just average for everyday trading, FXCM caters to multiple trader types. High-volume traders, algorithmic traders, and, overall, traders that appreciate robust trading tools alongside quality market research will find FXCM to be a good fit. Read full review

Unique social copy trading community

Darwinex provides forex traders with a unique social copy trading community that enables investors to buy and sell trader-developed strategies. Copy trading aside, while Darwinex also offers the full MetaTrader suite, the offering is just average. Read full review

Multiple copy trading platform options – Visit Site

While AvaTrade provides multiple platforms for algorithmic and social copy-trading, the broker’s overall client experience trails industry leaders. Customer service is terrible, pricing is just average, less than 1000 instruments are available to trade, and research is underwhelming. (71% of retail CFD accounts lose money.) Read full review

Copy Trading History

Without social trading technology, the act of copy trading would be considered a managed account and require a power of attorney. Or, in other cases, a trader would need to monitor their account continually for signals to manually copy. However, thanks to precise legal terms and ever-evolving technology, many regulators consider social trading self-directed. In almost every jurisdiction, copy-trading is self-directed because the client must decide who to copy, even if the copying happens automatically (for each signal). It’s important to note that not all trading platforms with social features provide copy trading.

Many of the early pioneers in social trading technology started out first as third-party platform developers, such as Tradency, ZuluTrade, and eToro. While some of these firms are still independent service providers (ISPs), eToro became a broker, for example.

Best Copy Trading Platforms

From the 30 international forex brokers we reviewed for copy trading, eToro, is our top pick for 2020. The broker has continued to innovate within its next-generation eToro platform, which delivers an impressive user experience packed in a modern web-based user interface.

Overall, the eToro platform experience sets the bar high for social trading and is again the clear winner in 2020. eToro continues to lead the industry forward and almost exclusively focuses on social copy trading.

Indicative prices for illustration purposes. Indicative prices; current market price is shown on the eToro trading platform.

Pepperstone took second place this year as it offers a comprehensive range of third-party social copy-trading platforms, in addition to the native forex signals market available in MetaTrader 4 (MT4) and Spotware Systems’ cMirror platform. The firm also offers the ZuluTrade platform, AutoTrade by Myfxbook, Tradency’s MirrorTrader platform, in addition to the developer’s RoboX solution.

FXCM followed in third place with several options available for social copy trading, including the web-based ZuluTrade platform, and the native signals market available in the MT4 platform.

Darwinex, our fourth-place finisher, provides traders access to nearly 1,200 trader-developed strategies that are traded like securities (ticker symbols) on the Darwinex platform. The best performing strategies on the platform receive funding from the broker itself, which allocates $4.5 million among the most successful traders, during each competition period.

AvaTrade came in fifth place for its array of social copy-trading platforms such as ZuluTrade and Tradency, and including its most recent addition of DupliTrade.

Copy Trading Platforms Comparison

Using our forex brokers comparison tool, here’s a summary of the trading platforms offered by eToro, Pepperstone, FXCM, and Darwinex.

Feature eToro Pepperstone
Open Account
FXCM Darwinex
Proprietary Platform Yes No Yes Yes
Desktop Platform (Windows) No Yes Yes Yes
Web Platform Yes Yes Yes Yes
Social Trading / Copy-Trading Yes Yes Yes Yes
MetaTrader 4 (MT4) No Yes Yes Yes
MetaTrader 5 (MT5) No Yes No Yes
cTrader No Yes No No

What is the best copy trading platform?

Our testing found eToro to have the best copy trading platform for 2020. eToro is regulated in countries across the globe, offers over 1,700 different instruments for copy trading, and provides a robust trader community. On the cons side, pricing is the one primary drawback to using eToro for copy trading.

Copy trading is legal in most countries, pending the broker itself is properly regulated. When investing in the financial markets through a regulated-broker, procedures during the account opening process help ensure it is legal for you to trade, depending on your country of residence.

How does copy trading work?

With copy trading, a trader (signal provider) shares their real-time trades with other traders (users). Using a copy trading platform, the users can, in real-time, automatically copy the trades of the signal provider. Each copy trading platform provides optional controls to protect investors. For example, traders can customize the amount of capital they are risking and which signals to copy.

Can you make money copying trades?

Like any investment, you can make money or lose money copy trading. The idea with copy trading is that you can assess the profitability of each trader before choosing which signal provider you want to follow. However, as the market adage goes, “Past performance is not indicative of future results.” Copy trading is risky, and many traders lose money. Only invest what you are willing to lose, start with a small amount of capital, and do thorough research before committing to a strategy.

How do I choose the best trading system to copy trade?

The best trading system to copy isn’t necessarily the most profitable. It is crucial to align your risk-parameters with the strategy that best suits your investment goals. For example, a more conservative investor may choose a system with a lower average loss per trade, relative to the average profit. On the other hand, a more aggressive investor may choose a strategy which has higher volatility, which means higher risk for losses.

Many modern copy trading forex platforms contain hundreds or even thousands of signal providers. As a result, it can be difficult for traders to decide who to follow. Thus, it is always important to do research, start with a small amount, and never risk more than you are willing to lose.

Closing Thoughts

Understanding how social copy trading networks calculate trading performance is an essential aspect as it affects the ordering of trader rankings. The method used to measure and track profit and loss also influences trade copiers.

Instant backfill bias is just one example of the challenges social trading technology developers face if they permit traders to instantly upload their entire trading history at the click of a button.

Such challenges have been known for years, and thanks to broker procedures, regulation, and robust technology, these concerns are mostly non-issues, especially for top-rated fx brokers. Nonetheless, if in doubt, it’s always prudent to check and ask questions.

Bottom line, for 2020, the above forex brokers provide traders the tools and capabilities they need to confidently copy trade.

Methodology

For our 2020 Forex Broker Review we assessed, rated, and ranked 30 international forex brokers. Each broker was graded on 105 different variables and, in total, over 50,000 words of research were produced.

While encouraged, broker participation was optional. Each broker had the opportunity to complete an in-depth data profile and provide executive time (live in person or over the web) for an annual update meeting.

All data submitted by brokers is hand-checked for accuracy. Ultimately, our rigorous data validation process yields an error rate of less than 1% each year, providing site visitors quality data they can trust. Learn more about how we test.

Forex Risk Disclaimer

“There is a very high degree of risk involved in trading securities. With respect to margin-based foreign exchange trading, off-exchange derivatives, and cryptocurrencies, there is considerable exposure to risk, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or related instrument. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable, or that they will not result in losses.” Learn more.

About the author: Steven Hatzakis Steven Hatzakis is the Global Director of Research for ForexBrokers.com. Steven previously served as an Editor for Finance Magnates, where he authored over 1,000 published articles about the online finance industry. Steven is an active fintech and crypto industry researcher and advises blockchain companies at the board level. Over the past 20 years, Steven has held numerous positions within the international forex markets, from writing to consulting to serving as a registered commodity futures representative.

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Copy Trading or Transactions Copying: Earnings on Forex for Lazy Persons

Content

Forex trading seems to be something incredibly difficult. Do you know that it is not necessary to trade on the foreign exchange market in order to have profit? Copy trading has been on the market for a long time. It’s an automatically copying of successful traders’ transactions into your account. It is enough to connect to the service, select an account to copy and get profit.

How does it work?

Copy trading is a kind of an automated trading, where transactions are being copied from one account to another. How does it happen? There are special platforms for transactions copying. You get registered in such a platform, choose a provider of signals and subscribe to his trading signals. After this trader’s transactions are automatically replicated in your trading account.

You can copy all of the transactions in full, or put certain restrictions, such as the number of transactions per day or fraction of deposit involved.

If you don’t like some transaction, you can close it.

Of course, copying of other people’s signals is not free of charge.The trader takes a certain percentage of profit or fix the price of his services for a month. The platform, where the copying happens, also has an interest, such as a percentage of the subscription fee. The platforms for copying, in turn, work with brokers to attract providers and subscribers. The cooperation scheme looks like this:

A successful trader gets registered in the platform for the automated trading and publishes his profile with signals for subscription. So he becomes a provider of signals.

A subscriber chooses a provider for copy trading in that platform or on the broker’s website and subscribes to his signals. The provider carries out transactions on the trading account by his broker, transactions are transfered through the platform to the subscriber’s broker server, and then to his trading account.

Note that you can not transfer funds to the signal provider’s account, as in the case with PAMM-accounts. Trading is carried out with money on your trading account.

It would be better if the amount in your account will be approximately equal to the provider’s balance. For example, if the trader has $ 10,000 on deposit, and you just $ 100, trading will be unreal for you. The trader can open a lot, which will be equal to your entire deposit. On the other hand, some services adjust to scale volume of transactions, depending on the ratio of the provider’s and the subscriber’s balance. Read the terms of use of the service carefully in order to understand what will be the ratio of profits and losses from the provider and you.

Copy trading = social trading?

Copy trading is often confused with social trading. But these terms are not synonyms. Copy trading is one of the elements of social trading.

Social Trading is a relatively new approach to the trading process. It is implemented through special services, resembling social networks for traders, where users can exchange information with other members of community in online mode. Traders are putting there their strategies, chatting with other traders, upvoting.

Newbies are observing the professionals’ actions, and then repeating their deals. Everyone has benefits from experience and knowledge sharing.

How to choose a reliable provider for signals copying?

Here is like on the market – providers show goods with their faces with ratings. The higher the rating, the more expensive subscription for signals. Choose a provider carefully, like a watermelon:

Large and light: Trading history should be long (not less than 60 days), and there must be quite a lot of deals.

Bright stripes: A large number of subscribers says about the trader being in demand.

Hollow sound while tapping: Estimate the trader’s strategy, how many trades per day does he carry out? If he is a scalper, is his strategy not too risky?

Read about the methods of risk management at the link and about methods of money management here.

Dry tail: Maximum drawdown should not exceed 25-30%.

Yellow spot on the side: An average monthly income is 15-30%.

Providers are evaluated according to a rating, and the higher it is, the more signals cost. New providers often sell signals for free to earn a rating. If you have not enough money for signals of demanded suppliers, risk and try to use free ones.

Pros and cons of copy trading

Advantages of traders’ signals copying:

  1. Earnings without knowledge
    You get profit from transactions, regardless of skill level. Professional traders will do everything instead of you.
  2. Trading style
    You choose the signals provider whose trading style suits you.
  3. More free time
    You don’t spend a lot of time monitoring the market.
  4. Multitrading
    You choose the providers of signals as many as you want. In such a case you diversify risks. Thus, you minimize possible losses and won’t lose everything at once. One losing deal may be hedged by another profitable one. Profit also becomes smaller, but the chance of losing all the money decreases.

There only three disadvantages of copy trading:

  1. High risks
    Forex is ambiguous and changeable. Despite the good profitable trades, the signals provider can once make a mistake and go into minus. Therefore, you should understand all the riskiness of copy trading.
  2. Professional degradation
    When you copy someone else’s deal, you lose your own flair. You monitor the market not so carefully, do not learn from mistakes, do not use technical and fundamental analyses. The brain relaxes without new knowledges, as the muscles without exercises.
  • 24/5
    Trading platform/terminal must always be turned on.
  • Services for orders copying

    So, to copy the signals you have to register on a special website or service designed for copy trading. There are many such sites, the most popular are:

    • MQL5 signals;
    • ZuluTrade;
    • Mirror Trader;
    • Signal Trader;
    • eTorro;
    • xSocial.

    Each platform has its own conditions of copying, advantages and disadvantages. We will discuss them in series of articles devoted to services for copy trading. Copy the signals and make money! Wish you successful trading!

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