If you are new to forex trading and want to form of investment that doesn’t require deep knowledge or experience, copy trading forex is the answer, especially when you find the best broker.
Copy trading allows you to copy the trades of successful traders, letting you benefit from their expertise without having to manage the trades yourself.
In this article, we will look into the best brokers for copy trading forex, who they are, and how they work.
We’ll also guide you through the basics of copy trading, and how to choose the right broker in other to help you get started.
What is Copy Trading Forex?
Before we look into the best brokers, let’s first understand copy trading forex.
Copy trading is a method where you automatically copy the trades of experienced forex traders.
For example, if a professional trader buys or sells a currency, your account will mirror those trades in real-time.
This method is especially beneficial for beginners, as it allows them to learn from more experienced traders while benefiting from their trading success.
How Does Copy Trading Work?
Copy trading is straightforward
1. Choose a Trader to Copy
The first step is to pick a trader you want to copy. Most brokers provide a platform where traders can showcase their performance, including their profit percentage, risk levels, and trading strategies.
You can choose a trader whose style aligns with your goals.
2. Allocate Funds
After selecting a trader, you decide how much money you want to allocate to copy their trades. This is usually a percentage of your account balance.
3. Automatic Copying
Once you allocate your funds, the system will automatically copy the trades made by the chosen trader to your account.
If they make a profit, you share in that profit; if they incur a loss, your account also faces the same loss.
4. Monitor Your Performance
You can monitor how well your account is doing through the broker’s platform. Some platforms allow you to pause or stop copy trading at any time.
Now that we understand the basics, let’s explore the best brokers for copy trading forex.
Best Brokers for Copy Trading Forex
Choosing the right broker for copy trading is crucial because not all brokers offer the same features, services, or fees.
Below are the best brokers for copy trading forex.
1. eToro
eToro is one of the most popular platforms for copy trading forex. Known for its social trading features, eToro allows you to copy top traders in real-time.
Features of eToro
eToro has a large community of traders where you can interact, share ideas, and even copy trades. It’s ideal for beginners who want to learn from professionals.
This allows you to automatically copy the trades of other successful traders.
While eToro is known for forex, it also offers other markets, including stocks, commodities, and cryptocurrencies.
eToro doesn’t charge any additional fees for copy trading. Instead, it makes money through the spread (the difference between the buy and sell price).
eToro has an easy-to-use interface, which is great for beginners.
How to Start with eToro
Sign up for an account on eToro’s website.
Browse the trader profiles and select one you’d like to copy.
Allocate funds to copy the selected trader’s trades.
Start earning and monitoring your account’s progress.
2. AvaTrade
AvaTrade is another top-rated broker that offers copy trading. With AvaTrade, beginners can easily access experienced traders while having the opportunity to trade manually as they gain more experience.
Features of AvaTrade
This app enables users to copy trades and interact with a community of traders. It’s available for both iOS and Android devices.
AvaTrade provides multiple platforms, including MetaTrader 4, MetaTrader 5, and its proprietary AvaTradeGO.
They offer a wealth of educational resources, making it easier for beginners to learn and get started.
AvaTrade does not charge fees for copy trading. However, there may be spreads and other transaction costs.
Besides forex, AvaTrade also offers commodities, indices, and even cryptocurrency trading.
How to Start with AvaTrade
Register on AvaTrade’s website.
Choose the platform you prefer (MetaTrader or AvaTradeGO).
Browse the traders to copy and select one based on your preferences.
Set your copy trading budget and start copying.
3. ZuluTrade
ZuluTrade stands out as a platform that offers copy trading with the option to select traders based on their performance.
Unlike other brokers, ZuluTrade’s system allows you to set parameters that will only copy traders who meet specific criteria.
Features of ZuluTrade
ZuluTrade displays a rating for each trader based on their performance. This makes it easier for beginners to select reliable traders.
You can adjust the level of risk and the size of trades you wish to copy.
ZuluTrade works with several leading brokers, such as AvaTrade and FXOpen, giving you a wide choice of trading platforms.
ZuluTrade does not charge any monthly fees for using the platform, although you will pay spreads and a small fee to the traders you copy.
How to Start with ZuluTrade
Open an account with one of ZuluTrade’s partnered brokers.
Browse trader profiles and select the trader whose strategy aligns with your goals.
Set your copy trading parameters (such as risk level and trade size).
Start copying the selected trader’s trades.
4. FXTM
FXTM (ForexTime) is an excellent broker for copy trading. With its easy-to-use platform and a wide variety of traders to choose from, FXTM is ideal for both beginners and seasoned traders.
Features of FXTM
This is FXTM’s copy trading feature, where you can follow and copy traders automatically.
With FXTM, you can start copy trading with a relatively low investment, making it accessible to beginners.
FXTM provides detailed performance reports for every trader, so you can make informed decisions.
You can access copy trading via MetaTrader 4 or MetaTrader 5.
How to Start with FXTM
Register for an FXTM account.
Select the FXTM Invest program and browse trader profiles.
Allocate funds to copy your chosen trader’s positions.
Monitor your trades and adjust if necessary.
5. Pepperstone
Pepperstone is a well-known forex broker offering copy trading through its partnership with the social trading platform, cTrader.
Features of Pepperstone
Pepperstone offers cTrader, a social trading platform that lets you follow top traders and copy their trades.
Known for its competitive spreads, Pepperstone offers low-cost trading, which benefits copy traders.
Pepperstone’s cTrader platform features a variety of traders with different strategies and risk levels.
Pepperstone provides excellent support, which is important for those new to copy trading.
How to Start with Pepperstone
Open a Pepperstone account.
Download cTrader and browse traders to copy.
Set your risk parameters and investment amount.
Start copying trades and watch your account grow.
Benefits of Copy Trading Forex
Copy trading offers several advantages, especially for new traders:
1. Easy Access to Expert Traders
One of the biggest benefits of copy trading is that you don’t have to be an expert to participate in forex trading. You can copy traders who have years of experience and knowledge in the market.
2. Time-Saving
As a beginner, you may not have the time to analyze the forex market and make decisions. Copy trading saves you time by automatically copying the trades of professionals.
3. Diversification
By copy-trading multiple traders, you can diversify your risk. This way, if one trader suffers a loss, the other traders might make gains, balancing out your overall investment.
4. Learning Opportunity
Copy trading can be a learning experience. As you watch professional traders, you can learn about their strategies and understand how they make decisions.
5. Low Minimum Investment
Most copy trading platforms allow you to start with a low minimum investment, making it easier for you to enter the market without committing a large sum of money.
What is the difference between copy trading and forex trading?
Forex trading involves buying and selling currencies in the foreign exchange market to make a profit.
Traders directly engage in the market by analyzing trends, and economic data, and using different strategies to make their trades.
Successful forex traders rely on their own knowledge, experience, and technical analysis to make decisions and manage risk.
On the other hand, copy trading allows you to automatically copy the trades of more experienced forex traders.
Instead of making decisions yourself, you select traders to copy, and the system copies their trades to your account in real-time.
This offers a more passive way of participating in forex trading, as you don’t have to monitor the market or make complex decisions.
Copy trading is particularly useful for beginners or those who don’t have time to manage their trades actively.
How to choose the right forex copy trading app?
When choosing a forex copy trading app, it’s important to consider the following factors to ensure you select a platform that aligns with your needs:
1. Reputation and Reviews
Always research the app’s reputation and read reviews from other users. This will give you insights into the platform’s reliability, ease of use, and customer service.
2. Fees and Spreads
Check the fees and spreads on the app. Some apps may charge a fee for using their copy trading services, or they might take a percentage of your profits. Make sure the costs align with your investment goals.
3. Risk Management Tools
Look for platforms that offer risk management tools like stop loss or a maximum drawdown limit. These features help protect your account from big losses and give you more control over your investments.
4. Available Traders to Copy
Ensure that the platform has a wide range of professional traders with different strategies and risk levels. The more options available, the easier it will be to find traders that fit your investment style.
5. User Experience
Choose a platform that has an easy-to-use interface, so you can easily navigate the platform, view trader performance, and copy trades with minimal hassle.
The best time to use Forex copy trading
The best time to use forex copy trading depends on your investment goals and risk tolerance.
However, the following situations may be ideal:
- When you’re a beginner
- When you lack time for active trading
- When you want to diversify your trading strategy
Frequently Asked Questions
1. Can I copy all trades of a forex trader?
Yes, you can copy all trades of a forex trader. Most copy trading platforms allow you to mirror every position that the trader opens.
However, the number of trades you copy may depend on your settings and the amount you choose to invest.
2. Can I lose money with forex copy trading?
Yes, you can lose money with forex copy trading. Although you are copying a professional trader, there is still risk involved.
Past performance does not guarantee future results, and even experienced traders can make losses.
3. Are there fees for using copy trading apps?
Yes, most forex copy trading platforms charge a fee. Some platforms may take a percentage of the profits, while others may charge a monthly subscription fee.
Be sure to check the fee structure before choosing a platform.
4. How do I choose the right trader to copy?
To choose the right trader to copy, look at their performance history, risk levels, and trading style.
You can filter trades based on these factors, and it’s best to start by copying a trader whose risk level aligns with your risk tolerance.
Conclusion
By copying experienced traders, you can start your trading journey with minimal effort and learn valuable insights.
However, it’s important to choose a platform that meets your needs, offers transparency, and provides the tools you need to manage your investments.
Always remember that while copy trading offers great profit potential, it also carries risk, so it’s crucial to approach it with caution and make informed decisions.