The process of copying traders

1. If the signal provider / popular investor opens a new trade, his broker will send the data of this trade to the platform.
2. The trading platform receives data about the new trade and verifies who the investors are who copy the signal provider. It then checks their personal settings for copying the selected trader.
3. The platform then sends each investor details about opening a new trade, but adjusts it according to the client's specific settings.
4. It then opens in the customer's trading account to trade.

This process is done automatically, and even more so, in a few tenths of a second!

Who are the signal providers and followers?

The process of copying trades begins with the so-called signal provider.

For some brokers, we may encounter the term strategy manager or popular investor. He is a trader who has created a trading system according to which he trades himself and allows other investors to replicate their investments.

A follower is an investor who copies the trades of the strategy provider or popular investor.

Copy trading platform

Copy traders are enabled by the platform. Each platform contains basic and additional functions. On each platform, you will find your profile, in which you can monitor the development of your investments. You will find a list of investors/strategy providers in the platform for copying traders. After clicking on the strategy provider's profile, you will see your business history and other statistics.

A quality platform also contains all popular options deposit and withdrawal of money. You can also install many platforms on your smartphone or tablet. This way, you can find out the status of your investments at any time and analyse how the selected popular investors are doing.

Some platforms also allow traders to place an order Stop Loss, which allows traders to control the risk of copying traders.

Getting started copying traders?

Getting started is very easy. Let's take a look at the steps together:

1. Create a trading account with a broker
2. Deposit funds to your broker account
3. Choose the trader or investor you want to follow
4. Choose the amount to invest
5. Click the copy button
6. Depending on the platform's features, you can also set a protective Stop Loss instruction and other settings

Quality brokers for copying traders

Copying traders is becoming an increasingly popular service. Many companies are aware of this and are starting to provide this unique investment service.

How to choose an investor who pays to copy?

Every strategy manager or popular investor uses a different trading strategy, trades different financial instruments and uses different methods of money management. There are a really large number of these categories, and it's up to you to track and mirror traders.

It is very flexible and can be used for many investment strategies.

Each investor has his own goal and tolerance for risk. As the right follower and investor when copying traders, you need to set some realistic goals that you want to achieve by trading. You need to analyse your intentions, be aware of the risk and manage it effectively.

In our experience, it is appropriate to When choosing a popular investor, follow these points:

1. Trading time - First, notice how long this investor has been trading. It is safer to follow a trader who has been trading on the stock exchange for more than 1 year.
2. Trading instruments - It is very flexible and you can follow investors with different investment strategies. It is advisable to diversify your portfolio with popular investors who trade various financial instruments. For example, I decide to copy three popular investors/strategy providers. The first investor trades currency pairs, the second trades commodities and the third invests in shares.
3. Risk Reward Ratio (RRR) - This figure represents the risk-to-profit ratio. The statistically most robust RRR is the 1: 1 risk-to-profit ratio.
4. Drawdown - Note the data on the largest decrease in capital (drawdown) in a certain period (1 year, 2 years, or throughout the period). This information will show you how the investor manages the risk in adverse situations. This drawdown shouldn't exceed more than 15% per year. As a rule of thumb, the lower the drawdown, the more likely you are to make a profit by copying the trader.
5. Number of followers - represents the social aspect and the popularity of the investor. It is certainly not necessary to rely only on this single point, but it can point us to the fact that how many followers trust and copy the popular investor. In most cases, this means that he is a popular investor with a wealth of experience who is profitable in the long run.

Fees for copying traders

As we explained earlier, when following traders, you replicate the investor's trades to your trading account. For example, if a popular investor invests 2% of their capital in buying shares, you will automatically buy the same in your account shares worth 2% of your trading account.

In this process, you pay the same fees as if you were trading. So when copying traders, you can pay a fee for the execution of the transaction, part of the spread or you can pay a fee for transferring the open trading position to the next day (swap).

In some companies, you may pay one of these fees:

* Entry fee - this fee is charged at the beginning of the merchant's/strategy provider's copy process
* Performance fee - is paid only from the profit that the follower made by copying the merchant
* Management fee - this fee represents a reward for the provider's strategy for "managing" the funds of followers

Conclusion

It is a great service for beginning marketers. It will allow you to enter the sometimes dreaded world of finance and potentially make some profits. Even with losses, copying traders protect you from losing all of your capital (as long as you copy quality strategy providers). Although mirror trading does not provide any guarantees, it is an ideal way to start investing.

This form of investing offers a unique solution for people who want to invest their money, but don't have enough time or experience to invest. Replicating traders thus allows you to use the knowledge of more experienced investors.

Knowing how to invest well requires certain knowledge and experience, which each investor will gain through their own studies and practice. So why not entrust your investment to someone familiar with the trading world from the beginning? And that's exactly what copy trading is all about.