|Copy trading in MetaTrader|
Learning to invest is a process which not everybody has the time or passion to go through. Instead, many investors are looking forward to copy their trades from successful traders of the market. With copy trading, you can benefit from experience, researches and decisions of a successful trader in the market. In this article, we are going to teach you how to start copy trading through several simple steps.
Most investors prefer to have more control over their financial growth, but they don’t know where, when and how to invest. Most investors were led into online trading by the dazzling advertisements of the cryptocurrency market. It was only after crypto markets which most people found out that they could reap handsome gains by increasing their risk tolerance.
Investors such as Warren Buffet and George Soros are recent heroes, but there are numerous instances in which traders and investors loose money. Therefore, the important question is that is copy trading profitable?
Technological advancements mean that copy trading systems are being increasingly utilized in larger scales. Several types of social trading, specially copy trading have become popular in the recent years.
What is copy trading?
The meaning of this phrase is completely obvious. When copy trading, an investor copies his/her trades from another trader. However, copy trading has several forms:
- Automatic copy trading: In this method, you specify the strategy which suits your trading style and risk appetite. Then all operations which the signal provider applies on his/her own account will be exactly replicated on your account.
- Semi-Automatic copy trading: A signal will be provided and you can decide whether to accept it or not.
- Manual copy trading: Manually copying other experienced traders’ strategies.
Different types of copy trading
Different kinds of operations which people refer to as copy trading, could be categorized in several categories. When we are pointing out the differences between these operations, we are not talking about major and fundamental differences.
However, it is important to know the difference between conventional copy trading, mirror trading and new social trading methods.
In this type of online trading, your personal trading account will be linked to your signal provider’s account. In this method, you will adjust your trading volume according to your risk management criteria and operations will be replicated in your trading account.
By choosing this method, you are still free to specify the amount you would like to invest. You can also make several adjustments in entry point, stop loss and take profit as you desire.
In addition, traders are allowed to deactivate the copy trading process anytime they want and manage their portfolio manually.
Mirror trading is a kind of copy trading, which is the primal version of the copy trading style you see today. Mirror trading is based on your forex broker’s trading environment.
In this method, the trader is allowed to monitor various features and results of several trading strategies in different platforms and implement his/her own strategy based on his/her trading goals, trading style, amount of capital and risk tolerance.
The reason why this method is called “Mirror trading” is because all operations are mirrored based on other trading strategies. With mirror trading, all operations will be automatically replicated in your trading account.
As it is implied by the name of this method, social trading adds a social element to copy trading. In this method, not only you can replicate any strategy and operation you want, but you are also able to interact with other investors and traders.
In this method, you choose based on the trader itself rather than the strategy. In fact, investors are guided based on characteristics, styles and performance of traders. The structure of social trading is much like a normal social media platform.
To be able to use social trading, you should be registered in a trading platform. MetaTrader is a good choice, since it is free and enables you to access numerous global financial markets. In addition, you can start trading in a demo account and put your strategies to the test, before risking your real assets.
Why is copy trading popular?
As we mentioned before, forex copy trading is very popular among beginner investors. With the help of this system, newcomers are able to start trading and benefit from the experience of other successful and experienced traders.
The following features are the most remarkable features of this trading style.
Benefiting from other’s experience
Whether you choose to use other traders’ strategies or directly replicate their ideas in your trading account, the purpose you follow remains the same. By copy trading, investors intend to make money by using the ideas of experienced traders. This is the most obvious reason for copy trading.
Some traders may know where to invest, but they are constantly facing operational problems when placing stop loss, adjusting their trading volume or when closing their positions. With the help of copy trading, you can link your trading account to another and replicate any operations you do not want to do yourself.
Another advantage of copy trading is strategy implementation and evaluation. Using the reported statistical data, you can easily evaluate your trading strategy and know what you can expect from it. In addition, you can interact with other traders and find out about their ideas.
Each market has its own ups and downs. For example, you may have a positive sense about EUR/USD in New York trading session, therefore you open a trade and invest 10% of your capital on it. But suddenly, the trend reverses. In this case, you would be left with a load of debt because of your incomplete information about market psychology.
Copy trading breaks this destructive cycle. By using copy trading, you do not need to study market psychology anymore. Because you can study the history of the market with 100% accuracy.
The best social trading platform
Zulutrade is a special social trading platform. This platform allows its clients to replicate other traders’ ideas and strategies to make profit as successful traders do in financial markets. In addition, this platform enables traders to share their ideas and insights and benefit from other trader’s experience. One of beneficial features of Zulutrade is its compatibility with MetaTrader4, which makes it more convenient for traders to use this platform effectively in their everyday trading.
With more than 1 million clients and over 800 billion liquidity, Zulutrade is one of the largest social trading platforms which offers a wide spectrum of financial services. Additionally, there is an advanced search feature in Zulutrade which allows investors to find the best investment choices with high accuracy and speed.
Written by: Mohsen Mohseni (Aron Groups).