Copying forex deals of successful traders are gaining more and more popularity on the Web. This is not surprising, since there are not many professional traders in the Forex market. Now people do not need to delve into the fundamental and technical analysis and study various figures to know the future movement of gold trading, USD, or EUR.
What does the concept of “copying trades of successful Forex traders” mean? It is when anyone can connect to successful traders on Forex with the help of certain services, which allow to copy the activity of people on Forex and make a profit or loss from it.
How does Forex transaction copying work?
Below is a simple example, with just a few steps, of how the process of copying trades (or auto trading) works. It may vary slightly from site to site, but the philosophy is always the same.
- Registration on a Forex trading platform.
- Selecting a broker from a list of available options.
- Attentive research of your broker and the terms of connection to the auto-trading service.
- Opening an account, funding, and setting up.
- Selecting one or several traders as a source for copying.
- Launching the platform and fine-tuning.
- Withdrawing money.
Copy trading is often defined as auto-trading since it is an automated process. That means one does not have to track and analyse the actions of his managing trader and conduct transactions himself. Trades are duplicated straight into personal accounts using all the pre-set parameters.
By transactional settings, one should understand the volume or proportions. Several services provide the possibility to set up the trading parameters in a way that the copied Forex orders are not opened with an identical lot as the trader, but with a lower or a higher one.
For instance, if an investor cannot afford to duplicate trades with 1 lot, it is possible to use lower volumes in options, for example, 0.01 lot. Thus he can check the profitability shown by the trader and the risks are significantly reduced.
Autotrading can be configured in the modes below:
- Analysis of incoming signals and comparison.
- Semi-automatic copying. With this mode, it is easier to monitor all signals and chooses one strategy to trade. Using this mode you can close trades by yourself without waiting for the main trader to close the trade.
- Automated copying of forex trades. The advantage is the time savings; the disadvantage is the complete reliance on the decisions of the selected traders. You can choose your trading tactics and sources, and the platform will do the rest for you.
Choosing a successful trader
The challenge for every investor is to find at least a few of the best traders among thousands. Indeed, this will shape the only purpose that every investor has – making money. To choose the best of the best, the strategist whose decisions you will rely on, it is crucial to have an ability to analyse.
One of the key elements is the size of assets. The bigger amount of funds means higher professionalism of a trader who manages it. It means that the trader knows what to do and when to do it.
In second place comes profitability. Profitable trades are not only about risk but also about the ability to predict.
The third important aspect of trading is stability. A rule of thumb: the longer a player has been in the market, the more reliable he has been.
We have defined the term auto-trading (or copy-trade) in Forex. Have learned the conceptual details of how automated trading platforms work. Have also discovered tactics to choose a successful trader for copying trades. Now you know how to copy-trade and where to start. The next step is yours.