With copy trading, a trader (signal provider) shares his trades in real-time with other traders (copiers). Using copy trading software, users can automatically replicate transactions from the signal provider in real-time. Each platform offers optional controls to protect investors. For example, traders can customise the amount of capital they risk and the signals to replicate.
Some sites or platforms include a feature that allows a user to activate free copy trading by choosing the trader whose trading strategy he wishes to copy. Replicating a trader, therefore, consists of directly reproducing the current and future positions he takes on the market for as long as you want. If he takes a buy position in a currency pair, index or stock, so should you.
Same if it's a sell position. When it makes a profit, you also make a profit. If, on the other hand, the position is losing, you also lose part of your capital in proportion to what you risked. The parameters, as well as the distribution of trades and risks, differ for each mirror trading platform.
Application in a Trading Platform
On some platforms, positions are reproduced proportionally. For example, suppose your account balance is $100,000, which is five times the account balance of the trader you are working with ($20,000). If he places an order and wins €1000, a proportional trade will be opened on your account.
Your position will be five times higher than his and you will earn five times the amount he earned; that is to say 5000 euros. However, you can adjust the risk and the size of the lots to be traded. Depending on the platform you are using, you can also set a maximum acceptable loss.
Mirror Trading - Is It A Reliable Business?
Copy trading is legal in most countries, provided that the broker that offers this feature is itself properly regulated. When you invest in the financial markets through a regulated broker, account opening procedures allow you to ensure that your transactions are legal, depending on your country of residence.
In UK, for example, brokers who offer their clients to copy trades are regulated by the FCA (Financial Conduct Authority). This is because the activity is not listed as investment advice. This decision is also the source of heated controversy in the UK because some people consider mirror trading to be neither more nor less than portfolio management.
Why Use This Kind of Trading?
If you don't want to do manual trading which involves all the difficulties associated with market analysis, copy trading is the right activity for you. This will allow you to earn additional passive income while exercising your usual profession. You will therefore depend on a trader who will take care of your annual profitability. If, on the other hand, you do not want to depend on a trader, then this activity is not for you. https://forex-mirror-trading.yolasite.com/ for extra info on mirror trading
