There are many trading platforms online that support copy trading. Essentially, you give the software permission to use your money to copy the trades of one or more other traders (so called masters).
You select which trader or traders to follow, and there is usually a wide range of traders to chose from on the platform, with various risk-profiles.
On many platforms, you can also adjust other parameters, e.g. doing proportional copy trading where you set the parameters to make smaller or larger investments than the master-trader.
Copy trading can be a great way to trade, but it is not without risk. Never risk money you can not afford to lose. Past success does not guarantee future profits. Even a trader that has been highly successful up until know can hit a rough patch and do a lot of losing trades.
Brokers that support copy trading
There are a lot of brokers available that supports copy trading. Here are a few examples:
- AMarkets
- Avatrade
- BDSwiss
- eToro
- FBS
- FP Markets
- FXDD
- FXPrimus
- Global FX
- Global Prime
- HYCM
- IC Markets
- ICM Capital
- IFC Markets
- JustForex
- LH Crypto
- M4Markets
- MTrading
- MultiBank FX
- NPBFX
- OctaFX
- Pepperstone
- PrimeXBT
- Quotex
- TP Global FX
- Trader’s Way
- Tradeview
- VantageFX
- Videforex
- XM
- Zenfinex
Copy trading and leverage
Some brokers offer leverage for copy trading. When you use leverage, you are borrowing money from the broker and using it to trade. You are thus risking borrowed money, and this is of course risky.
Using leverage is popular among copy traders, partly because it allows a trader with a fairly small bankroll to open large positions. The trader can therefore copy a trader with a larger bankroll without having to do decrease the position sizes by much (or at all).
We do not recommend leveraged copy trading for inexperienced traders, because it is possible to lose more money than you ever had in your trading account. Trading is in itself risky, copy trading comes with its own elements of risk, and adding borrowed money to that cocktail makes things even more complex from a risk perspective.
Can I do copy trading on my phone?
Yes, platforms that support copy trading are available for mobile devices, both smartphones and tablets. You will typically need to download and install an app. Make sure you chose the right app depending on the operative system of your mobile device. Apps are available for both iOS (in the Apple Store) and Android (in Google Play).
Is copy trading available for cryptocurrency trading?
Yes it is possible to use copy trading to trade cryptycurrencies. You can for instance check out eToro, Coinmatics and 3Commas.
Also keep in mind that some trading platforms offer exposure to cryptocurrency through other products. You may for instance be able to utilize Contracts for Difference (CFD) where the underlyings are cryptocurrency pairs or crypto-noncrypto pairs.
A few tips for the prospective copy trader
Do your homework and never stop learning
It is easy to see copy trading as the ultimate choice for the lazy trader. Our recommendation, however, is that you do your own homework. How will you be able to evaluate master-traders, broker, platforms, etcetera if you know nothing about these things?
Use copy trading as an opportunity to learn more, not less.
Make a strategy for handling risk
This strategy can involve multiple elements, such as:
- Never allocate more than a certain percentage of my total trading bankroll for copy trading.
- Using stop-loss and take-profit.
- Following more than one master-trader, instead of putting all my eggs in one basket.
- Use copy trading to be active on several markets instead of just one, e.g. both forex and company shares, and use this to offset risk.
Use copy trading to diversify
Diversification is key to risk management, but it is easy for a trader to end up doing essentially the same thing over and over again even when they try to diversify. You might have a favourite industry that you are drawn to when you invest in shares, or you might love to trade cryptocurrency and be reluctant to branch out outside that field.
This is where copy trading can be an excellent tool. Select a successful master-trader that is different from you and start copying them with a part of your total bankroll. That way, the copy trading will act as a form of diversification for your trading.
Check out the alternatives
Is copy trading the ideal choice for you? Should you do copy trading only, or a mix-and-match combo? Make sure to check out social trading, mirror trading and trading signals.
Beginners should stay away from leverage
Even if you have experience from standard trading, we recommend that you stay away from leverage when you first venture into copy trading. The combination of copy trading and leverage is risky, and we do not recommend it for inexperienced copy traders – not even if they are experienced non-copy traders.