We’ll help you pick a forex broker that’s great for beginners, and give you an educational introduction to forex world. Here are the best forex brokers for copy trading, based on our testing of 39 brokers across 113 variables. Kane Pepi is a British researcher and writer that specializes in finance, financial crime, and blockchain technology.
He holds dual degrees in Finance and Marketing from Oakland University, and has been an active trader and investor for close to ten years. An industry veteran, Joey obtains and verifies data, conducts research, and analyzes and validates our content. Understanding how social copy trading networks calculate trading performance is an essential aspect of successful copy trading, as it affects the ordering of trader rankings.
Depending on your goals, it can also be important to find the right balance of diversification. Copy trading can be a great idea if you wish to actively trade in a passive manner. This is because your chosen trader will perform all of the required research and analysis, and then place the required orders.
Best Forex Brokers For Social Copy Trading
Nevertheless – and unlike the vast majority of providers in this space, eToro doesn’t charge any fees to use its copy trading service. After reviewing dozens of providers that are active in the space – the best copy trading platforms can be found below. Additionally, you need to understand what fees and commissions you will need to pay to copy trade – and what financial markets you will have access to. Joey Shadeck is the Content Strategist and Research Analyst for ForexBrokers.com.
74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Between 65% and 82% of retail investor accounts lose money when trading CFDs. EToro is unique in the sense that it offers an ‘all-in’ copy trading feature. By this, mean that eToro is primarily a regulated brokerage site that allows you to buy, sell, and trade assets without paying any commission. Attempting to get your head around copy trading platforms can be a daunting task.
This means that in addition to copying the trader’s current portfolio of assets, you will also mirror all future buy and sell positions. As noted earlier, there are tens of thousands of verified copy traders – so you will need to make use of the filter buttons. You can scroll back up to our section on How to Choose Traders to Copy for further guidance on how to select an investor. US citizens need to deposit a minimum of just $50, while most other nations need to cover at least $200. Irrespective of where you live – the minimum investment per copy trader is $500 – so do bear this in mind. Of course, not all trades like the example above will result in financial gain.
What Is The Best Copy Trading Platform?
With that said, copy trading broker eToro presents a risk rating on all of its copy traders. This is automatically determined by the eToro algorithm – based on series of metrics. As you can see from the above, you are copy trading in a semi-automated manner because you first need to decide whether or not you wish to act on the signal. Then, you will need to head over to your chosen broker and place the suggested orders. Like all seasoned traders, they will make use of advanced technical indicators and chart drawing tools.
Whether or not copy trading is a good idea for you will depend on your preferences, overall goals, risk tolerances, and what percentage of your portfolio you plan on allocating to copy trading. You’ll still need to specify various risk/reward parameters and maximum drawdown thresholds and decide which providers to copy . Traders who share their real-time trades for the purpose of copy trading are known as signal providers.
On the other hand, a more aggressive investor may choose a strategy that has higher volatility, which means a higher risk for losses — but also higher relative potential profits. Copy trading is legal in most countries, as long as the broker itself is properly regulated. When investing in financial markets through a regulated broker, there are procedures in place during the account opening process that should ensure it is legal for you to trade .
Which Us Brokers Offer Copy Trading?
This will, of course, be at any amount proportionate to what you have invested – and there be might some fees or commissions involved. Since its inception in mid-2019, the Robust copy trading system has made net profits of 405%. In terms of getting started, Duplitrade requires access to your chosen brokerage account. Once again, we think that Pepperstone is the best option in this respect – due to previously discussed low commissions and spreads on offer. Since the strategy was launched in late 2019, it has generated verified net profits of 207%. Another popular copy trading strategy at Duplitrade is that of the ‘Robust’ system.
The main concept here is that you can actively trade without needing to do any of the legwork. This is because your chosen copy trader will make all investment decisions. This includes the end-to-end process of analyzing the markets, performing research, and placing orders. With that said, cTrader is also behind a growing community that consists of both newbies and seasoned pros alike. This is because experienced traders can broadcast their proven strategy to the cTrader platform and in turn – this can be copied like-for-like. This is a win-win situation, as newbies get to trade in a fully automated manner while the strategy broadcaster will earn a commission.
There is full transparency on cTrader, meaning that you can view the historical trading results of your chosen strategy broadcaster before taking the plunge. There are two ways in which you might be charged to copy a strategy via cTrader. This third-party trading platform works much the same as MT4 – albeit, it is often used by those looking to CFDs as opposed to just forex. MT5 also comes with more advanced charting tools and technical indicators – and just like MT4, offers full support for forex EAs and automated trading robots. Once you have opened an account, you will then have access to tens of thousands of verified traders that have signed up for the copy trading program.
Alternatively, you also have the option of obtaining a forex EA or robot from a third-party platform and then installing it into MT5. Either way and much like MT4 – MT5 is a trading platform that sits between you and your chosen broker. As such, you will need to find a suitable brokerage site that is compatible with MT5.
Best Copy Trading Platforms Reviewed
The key point here is that everything that the trader does is mirrored like-for-like in your own portfolio. Copy-trading allows you to mirror the portfolio and ongoing trades of an experienced investor. This allows you to invest in a truly passive nature – as your chosen trader will determine which assets to buy and sell.
In doing so, you can test your chosen forex EA out in a risk-free manner. When the algorithm spots a profit-making opportunity, it will proceed to place a trade. This allows you to sit back and day trade around the clock without needing to do any research or place any orders.
This strategy will focus on mean reverting points and breakouts in a fully automated manner. In some cases, this is based on volume – so the more you invest the less you will pay. This means that the more the trader makes you, the more they make themselves. Either way, cTrader is a third-party add-on that you need to link with a compatible brokerage site. We found that the best copy trading platform for this purpose is Pepperstone.
With that said, Mirro Trader is a third-party add-on, so you will need to link it up with a supported online broker. Although you need to tread with caution when using such high levels of leverage, this allows you https://xcritical.com/ to engage in a copy trading strategy with a small amount of capital. Additionally, your chosen MT5 copy trader or forex EA might take scalping or day trading strategy – meaning that it will target small gains.
As you can see from the above, the eToro is the best copy trading platform to use as everything is conducted on a single platform. Plus, all financial instruments are traded commission-free and there is no surcharge or performance fee to use the copy trading tool. Crucially, this means that there is no requirement to use a third-party platform like MT4 or download automated trading software. Instead, you simply need to open an account with the broker and choose a verified investor that meets your financial goals and tolerance for risk. Before getting started with Duplitrade, it is important to note that the minimum deposit stands at a whopping $5,000.
Though it’s not for everyone, copy trading can help you diversify your existing portfolio when used correctly, and the best copy-trade brokers will offer tools to help you manage your account. Copy trading is like any investment, in the sense that you can either make money or lose money. Your profitability is determined by which traders you follow, as well as the timing of when you copy their trades — both of these factors will affect any resulting profits or losses.
Once you have selected a trader to copy at eToro, you will need to click on the ‘Copy’ button. You can choose from a debit/credit card or e-wallet if you wish the deposit to be processed instantly. Alternatively, you can transfer funds from your bank account, but this might take several days to arrive. Additionally, robots and automated software programs need to be installed into a third-party platform like MT4, MT5, or cTrader. This means that you will also need to find a suitable brokerage site and connect it to the respective platform. Instead, the robot places trades based on the underlying code it has been programmed to follow.
On the one hand, you have simple platforms like eToro – which offers everything in-house. That is to say, you simply need to open an account with the broker, deposit funds, and then select which traders you wish to copy. This guide has reviewed the best copy trading platforms to consider in 2022.