What Is Forex Copy Trade?
Copy trading, AKA mirror trading, is a form of automated Forex trading. It was developed in the late 2000s. It allows investors to copy the forex trading behaviour of experienced and accomplished forex investors worldwide. It was only available to institutional clients at the early stage. Later on, it was made available to retail investors.
Forex copy trade, allows people with little knowledge in Forex trading to benefit from those experienced traders by copying their trades.
Well, I said LITTLE. The reason being, you got to understand Forex to some extend before you copying anyone’s trade. Your money can be very much in danger if you copy blindly.
The Basics of Forex Copy Trade
Forex copy trade allows you copy traders of your own choice. Normally, the list of traders will be provided alongside with their trade details like, number of trades, average number of pips earned of lost, number of following traders, annualised ROI (return on investment), etc. Then you can decide on a certain percentage of money in your account to follow the trader that you have selected. He/ She wins, you win. He/ She loses, you lose.
This is merely a simple and basic explanation on the copy trading process. There is more to it due to different Forex copy trade platform has their own settings and different way of doing things. You will have to check with those platforms to get accustomed to the settings.
Till now, I bet some of you may think you’ve found the ultimate investing method. You can finally sit back and enjoy a nice cup of coffee while watching the money keep rolling in. Well, dream on! This is not a scheme whereby you will get rich overnight. You will need to take some time to learn and find which traders to follow and which ones are best left alone.
If you never put much thought into it, chances are your account can be wiped out automatically by copying them.
Most if not all of those copy trade platform offer free demo account. Try it out before you put your hard earned money in and start copying. A demo account is a good way to get yourself familiarize on how the platform functions. Carefully select a few traders that fit your profile and copy their trades in your demo account to check what their performances are like.
Make sure you are comfortable with the demo test of copying trade before you actually start trading!