The aim of this article is to introduce you to copytrading, and explain the differences between copytrading, social trading and forex signals.
CopyTrading is a fast-growing method when trading anything from Forex, CFDs to stocks and shares. It allows people with less experience and confidence to copy other successful traders and follow their trades.
This can save you lots of time because essentially you don’t have to learn the ins and outs yourself but you simply follow the experts.
Copy trading is simply where a trader aligns their trades with another trader and copies their trades as they are placed. This is a great way of entering into various investment markets but is most commonly used in the forex (CFD) sphere.
Copytrading is a great means of potentially making profit whilst investing little time. You simply find another successful trader and copy their trades, usually for a small fee.
You could base your choice on who you follow on many factors, such as, the asset class they trade, the time frame, or simply their profit factor.
CopyTrading definitely can be a profitable pursuit. Like any type of trading where risk is on the table there is potential to lose money. However, leveraging the great platforms on offer you may be able to reduce that risk and be profitable. We recommend being diligent in deciding who you wish to copy.
Make your decision based on the following three criteria;
The asset class they trade – does it align with your thoughts?
Profitability – What is their equity growth over your chosen time period?
Drawdown – What is their percentage drawdown? How much are you prepared to let your account drawdown to achieve profitability long-term?
CopyTrading differs from social trading in that copytrading tends to be fully-automated. Whereas social trending is usually a network of traders sharing ideas, strategies and actual trade entries. But there is more autonomy in that you can decide whether or not to enter the market and also you may want to enter with different risks than other traders in the network.
Social trading as opposed to copytrading allows for much more potential for collaboration. As within the network, members may be sharing trading tools, setups and creating unique trading strategies together. As with anything, it is always good to have like-minded people who have similar goals around. Social trading is exactly that. A network of fellow traders to bounce ideas off.
When Copytrading or any type of trading for that matter, the most important thing is to reduce your overheads. So the first thing we consider is tight spreads.
Also it is important to have a wide range of traders for you to choose the perfect trader that suits your wants and needs. Therefore, the amount of traders available at your disposal is our second key criteria.
Having both a copytrading and social trading element may help you to explore and deepen your understanding of the investment world through social means. The best way to learn in our opinion J
What are trading signals? Well, in short, trading signals are a fast growing aspect in the forex and CFD markets alike. Put simply, you pay a fee, usually in the form of a monthly subscription and you are provided with trading signals usually consisting of the following;
Trading signals are similar to CopyTrading platforms, in that you don’t really need any prior experience to initiate a trade. You just need to have a broker platform and know how to make a trade and input the relevant orders, such as take profit and stop loss. We caution anyone who wishes to do this as there are many unscrupulous companies offering signals which in the long-term offer not much chance of financial success.
Also you then become reliant on said signals, which is not the best way to create a sustainable income that has longevity. That being said, there is nothing wrong with constructive guidance. Forexsignals.com offers exactly that.
It’s not simply a forex signal service but a community. You trade alongside professional traders. This means that yes, you get all the perks of forex signals and trade ideas but through their live streams and workshops, you also get context and understanding of why they choose to make the trades.
This means that you can continually learn whilst being supported. With time you will probably be able to generate trade ideas yourself.
Like every pursuit – doing so alone is always much more boring, and it’s nice to have a community of like-minded individuals to bounce ideas off each other. You can converse with fellow members about their trade ideas or even become a contributor and post your own.
Also there are several live streams throughout the day whereby the in-house traders share their market view and biases. Here you can pose questions and perhaps gauge their thoughts on any ideas or view you may have.
In addition, there are lots of trading tools to assist your trading, all available in the members zone.
CopyTrading and iterations of it such as mirror trading and social trading can be a good way to begin your trading journey. With copytrading, you can gain an insight into how professional and retail traders alike trade.
Deciding on a broker is one of the most important decisions. Our recommended brokers have been chosen with copytrading and social trading in mind. If you wish for a more immersive experience when trading, and a platform to sharpen your skills, then forex signals.com can definitely add another string to your bow.