What is Copy Trading How Does it Work, Where to Start and How to Choose a Lead Trader?

Whether you’re a complete beginner or simply don’t have time to research the markets yourself – copy trading provides a solution for many investment barriers. It is important to note that copy trading isn’t only suitable for long-term investments in stocks or funds. Instead, you can also copy an investor that is active in short-term trading.

The travel industry is a crucial sector of the world economy, accounting for 10,4% of global GDP in 2019. With our ThematiX you can trade the company stocks that benefit from business and leisure travel activities, such as Hilton, Marriott International, or Hyatt Hotels. Before you start copy trading, you should do your own market research – especially if you are unfamiliar with the way that a particular asset works. IG Academy can help you here, with resources and message boards to bring you up to speed with anything that you feel you could know more about. Through copy trading, you can access another trader’s expertise or make the most of seasonal trends that you wouldn’t usually consider as a potential opportunity.

How is copy trading different from social trading and mirror trading?

You can join as an investor (to copy other trades) or you can join as a trader, so that others can copy your trades and you can make money. Think of this as running your own hedge fund, and everything is automated. That being said, some newer player in the game might also be worth it. For example, a new site might have a better and improved interface to what youre used to, but if the user-base is small, does the interface really matter?

What Is a Copy Trading Platform and How It Work

Well cover some platforms further in the guide but this is all you need to know about it right now. Copying traders simply open personal trading accounts and then connect a part of their portfolios to other designated traders. Afterward, they automatically copy every move of their chosen traders and replicate those traders’ performance on their personal accounts.

Adding and Removing Funds

The rating page comprises details of their past performance, trading options, trading modes, trading statistics, and other valuable information impacting one’s trading decisions. Many companies realised the business opportunity and started to build automatic copy trading services, where users could automatically copy the traders of other successful investors. Whether or not copy trading is profitable mostly depends on the trader you are copying. When engaging in online trading or any other form of investment, it is crucial to acknowledge that risk is an inherent part of the process. However, the beauty of copy trading lies in its ability to efficiently manage and mitigate the risk of financial loss compared to manual trading. In fact, relying solely on your own trading skills from the onset may result in losses.

The first company who released such feature on the crypto market was eToro who still delivers the iconic experience in copy and social trading. Diversification and risk management are also done since the pro trader is the one directing investment decisions. Following its release in 2005, copy trading initially allowed traders to copy particular algorithmic trading https://www.xcritical.com/blog/what-is-a-copy-trading-platform-and-how-it-work/ strategies designed via automated trading. Designers shared their trading history, which allowed others to replicate the trading activity. Trading signals are messages alerting you to potential trading opportunities. Signal providers use various kinds of analysis to bring trades to their followers, sometimes even with a take profit target and stop loss.

How to Select a Copy Trader at eToro

Once that’s done, you’ll be able to see a list of providers whose trades you can copy. Now it’s simply a case of clicking on a trader to view their stats – this typically includes things like their past performance, drawdown, and the things they typically trade. The most important thing to remember is that eToro copy traders actually utilise their own capital at the platform. In fact, this is a minimum requirement to be eligible for the program.

What Is a Copy Trading Platform and How It Work

This way you can see what experienced and successful traders do and you can figure out why. If they are more talkative, they can even directly show you and give you a few tips. Once you begin copying a trader, you can have different scales of control depending on the platform youve chosen.


This type of trading is becoming increasingly more popular due to the fact that it allows new traders to make money on the market. In fact, there are many traders who create the so-called “people-based” portfolios. This means https://www.xcritical.com/ that instead of investing in stocks or forex, they invest in other investors and dont perform trades themselves. Algorithms of the trading platforms are designed to automatically copy the trade of the lead investors.

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