Forex trading seems to be tough, especially if you are new to this business and do not know all the “rules of the game.” But did you know that you don’t have to trade yourself to make money on the foreign exchange market? You can make a profit by simply copying deals of successful traders. Everything is easy. It is enough to connect to the service, choose an account to copy, calculate profits, and activate the copy trading.
What Makes Copy Trading Special?
Novice traders face many problems and risks associated with security, fraud, storage of assets and keys on exchanges, constantly changing market conditions, dishonesty of intermediaries. In addition, trading requires a ton of time, knowledge, and confidence. So, if you are a novice investor or do not have time to trade yourself, you always have a chance to mirror all the transactions that a professional makes. One of the distinctive features of copy trading is that you don’t have to physically transfer your investment with copy trading. Your assets remain in your personal account and take the same actions as a professional investor in one’s personal account.
With the help of special services, you can avoid many mistakes and get easy profit by simply repeating the actions of trading gurus. It is enough to register on a special (social) trading platform that works in automatic, semi-automatic, or manual mode. Then choose an account to follow and subscribe to its trading signals.
Most of the services in South Africa allow you to copy transactions of several professional traders and thereby diversify your risks. On top of that, you can subscribe to all signals or set certain limits, such as the number of daily trades or the share of the used deposit. The trader whose operations you copy also benefits by taking a percentage of your profit or a fixed fee for services. Platforms that partner with brokers to attract providers and subscribers charge a percentage of the subscription price. Keep this in mind as well.
Also Read: Using Technology to Leverage Your Trading Efforts
Copy-Trading Tips
Now, when you know how does copy trading work, it should be understood that copying transactions need to be thought out and balanced. Choosing an experienced trader, creating a special trading account with a copying service such as Forextime, and putting money on it is only part of the task. Therefore, we offer you important tips to follow:
- Pay attention to the “rating” of a professional trader before you start to copy the deals he makes. Calculate the possible profitability from copying his transactions and trading operations.
- Pay attention to the profitability of the trade. By clicking on the trader’s chart, you will see the indicator of his profitability. The higher it is, the more you will be able to earn, and the more efficient copy trading is.
- Don’t forget about the age of the account. If you see that the account was opened just a couple of days ago and has high profitability, do not rush. You can assess the real success of a trader only by studying long-term charts. Therefore, it is worth choosing established market players.
- Check the trading activity of an account. It is also necessary to check how often a trader performs trading operations. There are traders who make up to 10 trades a day. However, there are still those who may not do anything for weeks. We recommend that you go with traders who trade frequently. It is unlikely that you will be interested in copying the operations of traders who are active on Forex a couple of times a week or even less often.
- Manage your investment smartly. Never use all your investment in a single transaction, even if you are 100% sure “to win.” Be smart and balanced. There are always risks of failure, so your task is to reduce the possibility of losing all your money in one go.
Copy Trading – Is It a Good Approach to Follow?
Taking into account all the features of copy trading, this type of investment is great for novice investors/non-professional traders who do not have deep knowledge of the market but still consider copying transactions as a way to make money. It is worth noting that copy trading does not guarantee a 100% profit. It all depends on the rate of traded assets and the profitability of the trader’s strategy in a specific period of time.
Also Read: Three Trading Principles to Follow when Trading Forex
