Copy Trading Explained

What is Copy Trading?

Copy Trading, also known as Social Trading or Mirror Trading allows traders to participate in the financial market irrespective of their experience. They do this by following the steps of seasoned and experienced traders with verified success records to execute their trades. Copy or Mirror trading offers the perfect solution for individuals that want to invest their money and trade with the goal of increasing their capital but lack the experience or time required to learn. There are numerous brokers that provide the platform for copy trading and many traders are taking full advantage of these networks/platforms. Many platforms offer social trading to the traders in different ways, including manual, semi-automated, or fully automated solutions.

How does Copy Trading Works?

The mechanism of Copy Trading is very simple – it links a component of your portfolio with that of a specific trader that you have chosen. As soon as you copy a trader, all the trades they have opened automatically get copied to your account. In other words, you trade exactly what they trade and you make the profit/losses they make. In addition to this, all their future actions are automatically copied and reflected on your account until you choose to stop following them. When you are trying to copy trade forex, for instance, you will be prompted to select a specific amount that you want to invest in a particular trade. In most instances, you can’t invest beyond 20% of what you have in your portfolio.

Copy Trading Explained

Let’s look at a simple example. Let’s say you have a balance of $1000 in your account and instead of opening trade on your own, you decide to copy a trader. You look at their statistics, and everything looks promising. To be cautious, you decide to invest a proportion of that amount. So, to be on the safe side, you invest $100 in the trader’s opened trades, which is 10% of your available funds. If the trader’s portfolio is $1000, it means you have invested 10% of his own portfolio. So, if he trades $100, you trade 10% of that amount and the profit you make is proportional to your trades. You don’t have to worry about this because the calculation is automated.

There are quite a number of social trading platform options that you can explore. Each has its own specific products and your choice will depend largely on the available products vis-a-vis your preferred products. Let’s look at some products and where you can find them to trade.

·       Forex

Most trading platforms offer forex as a product for trading. If you are not sure of platforms to consider, some of the top ones include ZuluTrade, eToro, InstaForex, MetaTrader 4 (MT4), FBS, and Naga.

·       Cryptocurrency

 There are specific trading platforms that offer cryptocurrency as a form of trading products. Some of the best platforms you can explore include ZuluTrade, eToro, InstaForex, and Naga. MetaTrader 4 and FBS do not offer cryptocurrency as part of their products.

·       Stocks

Just like cryptocurrency, not all platforms offer stocks as part of their products. Trading platforms where you can find stocks as a form of trading product include InstaForex, eToro, FBS, and Naga. ZuluTrade and MetaTrade 4 do not offer stocks as part of their trading products.

Is Copy Trading Legal and Legit or is it a Scam?

The simple answer is yes, copy trading is legal and not a scam. However, before you run off to start investing, you should know that it’s not all online trading platforms that have the legal right to offer copy trading or social trading. Trading brokerages that offer mirror trading services should be licensed and well regulated by regulatory bodies that govern the act of social trading. Therefore, the next time you want to use a trading brokerage for social trade, you should check to see if they are licensed.

Can you make Money with Copy Trading?

The short answer to this question is yes. Copy trading is an innovation that has changed the dynamics of trading and since its introduction; it has remained a practical means of participating in a trade to earn potential profits, even without experience. However, it is crucial that you fully understand the possible requirements and risks involved in the process. Therefore, if you have been asking – is social trading profitable? The answer is yes.

Best Copy Trading Platforms

In this section, we will review some of the best copy trading platforms available to both new and experienced traders. We’ll cover areas such as the features, available products, markets they operate, and the unique differences between them. We’ll focus this review on some of the top platforms in the industry, including ZuluTrade, eToro, InstaForex, MetaTrader 4, Naga, and FBS. Let’s get right into it.

·       ZuluTrade

When compared to other platforms, ZuluTrade requires a comparatively low minimum deposit and it’s a great platform for beginners. There are some brokers on the platform that require as little as $1 minimum deposit while others require as much as $300, €250, and some 25000 JPY. ZuluTrade offers trading in forex, stocks, commodities, and indices. When compared to the likes of eToro and others, ZuluTrade offers traders the opportunity to view the rankings of investors’ performance and you can view the overall profits from the simulator. Another major thing that sets ZuluTrade apart from competitors is a huge user base. The platform is available to over 190 countries of the world and it is licensed and regulated in the USA, EU, and Japan.

You can access ZuluTrade platform through your browser without downloading the app. For traders that want to access their trades on the go, you can also download the ZuluTrade app. It’s available for iPhone and Android devices, as well as Windows and tablets. The app has the same features as what is available on the desktop version. You can also link your ZuluTrade app to the demo or live account on MetaTrader 4 (MT4).

·       eToro

eToro is also a great platform for beginners trying to explore copy trade forex. However, the minimum deposit is pretty on the high side compared to ZuluTrade. Minimum deposit at eToro is £250. The platform is available across over 60 countries and it is regulated in Cyprus, UK, EU, and the USA. Products available for trading for eToro copy trade include Cryptocurrencies, Stocks, ETFs, Currencies, Indices, and Commodities. The social trading platform is available as a desktop version and traders can also download the mobile app. It’s available for iOS, Android, and Windows. All features on the desktop version have been simplified on the mobile edition of the platform.

·       InstaForex

InstaForex also offers social trade and the products available on the site include Forex and CFDs. Minimum deposit on the site is also $1 USD, just like at ZuluTrade. InstaForex is dedicated to only MetaTrader 4 brokers, which means you can’t use any other broker on it. Although the site only offers the MT4 platform suite, the set up is quite remarkable, especially in terms of trading spreads, execution method, features, tools, and commissions. It is also important to mention that the MetaTrader platform comes with just the default functionality. Additionally, there are no other 3rd party plugins or platforms offered at the site. InstaForex is available in Android and iOS mobile app versions, which can be downloaded from the app store. The platform is Cyprus, UK, and FCA licensed.

·       MetaTrader 4 (MT4)

Users can also copy trade MT4 just like they can at other platforms highlighted above. The platform offers the standard online trading products such as Forex and CFD. Another important thing to mention is that MetaTrader 4 is one of the most well-known electronic trading platforms in the world. The platform can be downloaded directly from MetaQuotes website and it is also available through the app store for Android and iOS. The site offers more than 30 languages, 30 in-built technical indicators, and 23 analytical objectives. This site is designed for more advanced users, unlike ZuluTrade and eToro.

·       Naga

Naga is regulated by the CySEC (Cyprus Securities & Exchange Commission) and it features tradable asset classes, including Forex, Indices, Cryptocurrencies, Commodities, and Stocks. The site also offers social trading tools and it has its proprietary browser-based trade platform called NAGA Trader. This platform features an AI trading assistance known as CYBO. Naga is compatible with Windows and Mac Desktop versions. Traders can also download the mobile app through Android and iOS app stores. Minimum deposit is $100 USD.

·       FBS

FBS is licensed in Belize by IESC. The trading platform is a MetaTrader only broker with a small range of instruments for trading. Products available for trading at the platform are Forex, Stock, and CFD. FBS offers Android and iOS mobile applications for its MetaTrader trading platform. Users can download the app from the app store.

Best Social Trading (Copy Trading) Apps for Android

ZuluTrade: ZuluTrade Android app is known for its automated copy trading features, advanced portfolio management tools and analysis. The features of ZuluTrade and the interface are great, and you can access all the features on the mobile app. You can find ZuluTrade app for Android on Google Play Store.

eToro: eToro also offers a great app platform for users on its platform. The eToro app offers a huge community of signal providers and wealth of free signals as well as other web platform features. Apart from Forex, users can also trade commodities, cryptocurrency, indices, and stocks through the mobile app.

InstaForex: InstaForex is also one of the best social trade Android Apps. It features the same functionality and features available on the desktop version. Since it is connected only to MetaTrader 4, you can download the MetaTrader app and link it up with InstaForex trading platform.

MetaTrader4 (MT4): MetaTrader 4 is both mobile and app optimized. Without downloading the app, you can access the site on your mobile device and if you would prefer the mobile app, the functionality is also great. You can also buy a trading robot from the MetaTrader4 marketplace.

Naga: The interface and navigation of Naga mobile app are also seamless. As a matter of fact, you can download the app or choose to use the mobile version of the platform as all the versions work seamlessly. Naga also offers a trading robot, called CYBO. You can set it up on your mobile device for effective trading. You can learn more about CYBO and set it up through the Products & Tools menu.

FBS: FBS has newly introduced new features to its Android mobile app, which makes it one of the best apps for Android as far as copy trade software is concerned. The features of the app are the same as the web version and this means you can do practically everything on the FBS mobile app.

Best Social Trading (Copy Trading) Apps for iOS

Similar to Android, there are also some great apps for iOS devices also. In this review, we think the copy trading platforms with the best trading apps for Android also offer the best trading apps for iOS. Therefore, our list of the best social trading apps for iOS will include:

·       ZuluTrade

·       eToro

·       InstaForex

·       MetaTrader 4 (MT4)

·       Naga

·       FBS

The same features for the Android versions are replicated for the iOS options too, which means whatever operating system you have on your device, you can access the same features across the board.

Final Thoughts

If you are planning to open or migrate to a new copy trading platform, the platforms highlighted above are some of the best we’ve come across. The fact that they are licensed and regulated is a critical factor and the security of using them also count as much.

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