All you need to know about copy trading…

copy trading

Copy trading is the practice of copying another trader’s actions.

copy trading

Today, many platforms offer advanced support tools that makes copy trading really easy. You can let the platform automatically copy another trader´s actions for you, so you don´t have to do it manually. This takes the emotion out of the decision making for each position that needs to be opened and closed.

Automated copy trading is available for a wide range of assets and instruments, including foreign currency (forex), cryptocurrency, stocks, commodities, derivatives, and indices. On many platforms that offer copy trading, you can also use Contracts for Difference (CFDs) to gain exposure to things without actually buying and selling them. This makes it even easier to speculate on things such as company shares, cryptocurrencies and indices.

Is copy trading risk free?

No, copy trading is not risk free, and you can end up losing the money you put at risk.

On platforms that offer copy trading, you will typically be provided with a lot of information about the traders that you can elect to copy. You will know things about them, such as asset profile, risk profile and historical trading data. That way, you can for instance chose a low-risk trader who has consistently made a profit in the past. Still, it is important to keep in mind that low-risk is not the same as no-risk, and past success does not guarantee future success.

Level of control

Exactly how the automated copy trading works differs from one platform to the next. You may also be offered several different control levels within the same platform. Before you select a platform for your copy trading, it is important to decide what level of control you want. Do you want the actions of the Master (the trader you are following) to be automatically copied exactly as they are? Or do you want more control and flexibility? Do you want more control even if it means delays and increased risk of price slippage?

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Can I copy more than one trader?

Yes, you can copy more than one Master-trader simultaneously. Some traders use this for risk-management, as they can put together an overall portfolio comprised of different asset types and risk-levels by electing to follow several Master-traders.

Can I do copy trading on my mobile device?

Yes, you can conduct copy trading on smart phones and surf pads. You can either access the trading platform through the web browser, or download and use an app. Apps are available for both Android and iOS.

Examples of platforms that have become popular among mobile copy traders are MetaTrader 4, MetaTrader 5 and eToro.

If you are interested in using your mobile device for copy trading, we recommend that you check out the platform and the copy trading tools on your device using a Demo Account, even if you are already familiar with using the platform from your computer. Navigating and using the interface on a small touch-screen is different from being in front of a standard computer. With a Demo Account, you can use your free play-money to engage in copy trading on your mobile device and see how you like it.

Is copy trading available for cryptocurrency?

Yes, there are platforms available where you can copy trade cryptocurrency. Examples of cryptocurrencies that are well-established within the copy trading field are Bitcoin, Litecoin and Ether.

Some of the platforms them use Contracts for Difference (CFD) for copy trading. With CFDs, you can gain exposure to cryptocurrency price movements without actually owning cryptocurrency. CFDs are available for both crypto-crypto pairs and currency pairs where one currency is crypto and the other one is a traditional currency such as USD or EUR.

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One example of a trading site where you can do cryptocurrency copy trading is eToro. You can also check out dedicated crypto-platforms, such as 3Commas and Coinmatics.