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12.10.2020

What are the benefits of copytrade forex?

Let's start with the most important points.

  • Сopy and paste forex trading gives every trader a chance to make money without being directly in the market.

  • When copying transactions, the capital remains on the investor's deposit, an external trader does not have access to it. You can optimize trading costs since the commission of a signal provider is a fixed amount that does not depend on the possible profit.

  • You can get a profit during the training period, while a beginner studies various markets and trading techniques, forms their trading strategy, gains practical experience, tempers character, but they themselves do not yet risk trading. Also, by observing the actions of professionals, beginners learn much more effectively.

  • Performance monitoring and signal analysis are performed in real-time.

  • Huge selection of copy-paste forex signals providers for copying: you can diversify your investments by copying trades to your account from several sources.

  • The investor independently sets the copy parameters (lot size, StopLoss/TakeProfit, StopOut etc).

  • Based on the monitoring results, you can select a trader (or a group of traders) whose strategy and trading parameters (profit, the balance of profitable/unprofitable trades, drawdown size, etc.) most closely match your trading goals.

Let's note a few more controversial, but still positive points. When using the copy trading system:

  • you can not waste time developing your trading system;

  • there is no need to constantly monitor and analyze the market;

  • there are no serious costs when copying trades: subscribing to trading signals usually costs less than buying a trading robot;

  • the emotional and psychological load from the risk of wrong decisions is reduced.

We remind you that using the service of copying deals does not exclude your trading initiative. You can open deals on your own and at the same time manage orders that were opened by external signals. This is how experienced traders usually act and on the same deposit.

Now that we have practically convinced you to use copytrade forex, let us recall the troubles and dangers that await you on the way to profit.

«Hidden Pitfalls» in the auto copy trade process

Let's start with the most dangerous factors:

  • The provider of trading signals does not guarantee the effectiveness of their strategy and is not financially responsible for the result of copying its trades to the investor's account.

  • Copying transactions is a paid service. Subscribing to signals means that the investor undertakes to pay the trader a fixed commission regardless of the outcome of the trades. There are free services, but profitable reliable signals are much less common there.

  • No trade copy service will allow you to accurately duplicate all the trading ideas of a signal provider, a trader is not obliged to disclose all the details of their strategy. So unsuccessful deals are possible due to the investor's incorrect assessment of the trading system.

  • Evaluation of the result of trades is very relative: for example, a signal provider can perceive a series of unprofitable orders as an acceptable drawdown. But a mistake in copying rules can lead to the fact that your capital can be destroyed in just a few transactions if the parameters are not commensurate with your deposit. If the copy service offers automatic selection and scaling of trade parameters, we recommend using it.

  • The copying process (most often) is performed through an intermediary: trader's trading terminal − signal service server − investor's trading terminal. This means that non-standard slippage may occur when copying, which can reduce the profitability of trading signals.

As you can see, all of these potential problems can be overcome by behaving correctly in the market and adhering to a reasonable level of risk.

Several practical remarks

It is difficult for a beginner (copytrader) without practical experience to decide whether to participate in a deal or not. That is why novice traders choose the most dangerous option − automatic copying. Do not do that!

We recommend that you first choose the semi-automatic mode when the investor decides for themselves which strategy to copy to their account, and which one they do not need. When you receive a signal, you independently decide to open a deal.

Without an independent market analysis, it is impossible to regularly profit from copying transactions. However, trading on other people's signals is a very weak incentive to your personal development as a trader. Passion for copying transactions causes dependence on external information and does not form a positive practical experience.

The result?

Forex trading copy and paste transactions cannot be considered a full-fledged investment. You must control your deposit yourself, the signal provider is not responsible for the result. So confident skills and effective money management are a must.

Even if you manage to get a stable profit from copying trades, you must strive for personal professional growth, and (necessarily!) try to combine signal trading and independent trades.

Please note that the trading results of potential signal provider must be taken critically. They work with their capital and on their deposit, and they are not interested in your trading risk. We will tell you how to carry out a comprehensive analysis and choose the right signal source in the next article.

You are free in your final choice and let it be the right one!

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