Best Copy Trading Forex Brokers to Copy Successful FX Traders in 2023
If you are in the market for information on the best copy trading Forex brokers, you have come to the right place. The popularity of copy trading Forex brokers is constantly rising, with more and more traders resorting to copy successful Forex traders to profit from the highly volatile FX market. So, what is copy trading in Forex, and is it safe and reliable? What are the best Forex brokers in the market? Which Forex copy trading platform offers the best trading conditions? This comprehensive guide answers all of these questions and provides you with the most comprehensive information on the best copy trade accounts, to help you trade the market without any stress!
Copy Trading Forex Brokers
| Broker | Deposit* | Leverage* | Platforms | Assets | Regulation | Visit |
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| XM | Min. Deposit: $5 | Max. Leverage: 1:1000 |
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Visit XM XM review |
| AvaTrade | Min. Deposit: $200 | Max. Leverage: 1:400 |
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Visit AvaTrade AvaTrade review |
| IG | Min. Deposit: - | Max. Leverage: 1:200 |
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Visit IG IG review |
| eToro | Min. Deposit: from $10 | Max. Leverage: 1:30 |
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Visit eToro 74% of retail CFD accounts lose money eToro review |
| FXTM | Min. Deposit: $50 | Max. Leverage: 1:2000 |
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Visit FXTM FXTM review |
What Is Copy Tradе in Forex
Forex copy trading is one of the most innovative features to grace the ever-evolving FX retail market. It is known by many names, such as mirror trading, social trading, auto trading, and social network trading. The underlying concept is not dissimilar to what traders have been doing for decades. Still, the advent of social media has revolutionized the way by which traders access the market. So, what is copy trading in Forex, and how can one copy successful Forex traders to profit from the FX market?
A Forex copy trading platform is designed to help traders mirror or replicate trades from other successful traders in the market using mirror trade strategies, in hopes of turning profitable along with the master traders. An FX copy trading account allows the copier to make an informed decision, while master traders, also known as signal providers, can earn profits by allowing others to replicate their trades in exchange for a performance fee or a share of the profits.
Mirror trade platforms are integrally difficult to develop, owing to the many components required to facilitate a smooth and seamless social trading interface. Since most modern traders are familiar with social networks, the best copy trading Forex brokers integrate social networks and mirror trade systems to create the most powerful social trading tools in the market. Some of the top Forex copy trading platforms offer several unique functionalities, such as performance evaluation metrics, trade analytics, market research, and advanced trading tools, which allow even beginner traders to rake in profits without extensive knowledge of the markets or trading strategies.
Understanding How Copy Trading Works
A copy trading platform is a social network that allows traders to meet signal providers through an interactive dashboard. Signal providers, also known as master traders, list their services on the network, and the platform automatically tracks each provider’s trade metrics to create a complete online trading profile. The trade profile is essentially a snapshot of the trader’s trade activity, strategy, choice of instruments, risk appetite, performance, number of followers, risk of ruin, and other parameters that outline the signal provider’s overall investment behavior.
Copy traders, also known as copiers, are then given access to these online metrics. They can compare the performance levels of different signal providers and choose their preferred profile. Of course, copiers are free to choose any number of signal providers and allocate a percentage of their capital to each mirror trade account. They can then monitor the performance of their investments and make frequent changes to their portfolios to ensure that they copy successful Forex traders for maximum returns.
The Most Popular Instruments Supported by a Copy Trading Account
The best copy trading Forex brokers do not impose restrictions on the choice or the number of instruments for social trade networks. Therefore, in reality, the choice of instruments is dependent on the financial markets and asset classes supported by the broker. Nevertheless, the top Forex copy trading platforms support various asset classes, including FX, stocks, indices, cryptocurrencies, commodities, energies, commodities, and other CFDs.
However, when you copy successful Forex traders, you essentially copy their ideas and strategies, which might revolve around a few instruments that these master traders prefer. For instance, a successful master trader you follow might stick to just a couple of Forex pairs and commodities, such as EUR/USD, USD/JPY, and Gold. As a result, you can only mirror their trade ideas on these instruments.
If you are particular about copying ideas and trade strategies on your preferred instrument, you must search for a master trader who trades such assets. The best copy trading Forex brokers have comprehensive search tools that make it easy and convenient for their clients to search and copy successful Forex traders.
Benefits & Drawbacks of Forex Copy Trading Platform
What is copy trading in Forex’s benefits and drawbacks? This is quite an intriguing subject and an important aspect to consider before opening a copy trading account. Here are some of the benefits and drawbacks of using a Forex copy trade platform:
For Copiers
- No prior experience is needed to trade the markets.
- Copiers can take advantage of the experience and skills of successful FX traders.
- It is a great way to earn profits while learning the ins and outs of the markets.
- Mirror trades help save a lot of time and effort that is otherwise required for analysing the markets.
- The stresses are minimised to a greater extent.
- Copy trading provides opportunities to experiment with new asset classes.
- Choosing multiple master traders to mirror helps in diversifying risk.
- Success is always dependent on the strategies, risk appetite, and emotions of the signal providers.
- Copiers may not be able to develop the skills required to trade the markets on their own.
- The performance fees and the share of profits can be substantial for highly successful signal providers, which may result in lower returns for copiers.
- Some social trade systems require high initial investments.
For Master Traders and Signal Providers
- Signing up as a signal provider offers an additional revenue stream, which increases as the number of followers increases.
- Copy trading allows master traders to advertise their investing prowess to the entire community of traders.
- Some of the best copy trading Forex brokers also offer PAMM account options, which gives professional traders the option of a managed account.
- Master traders have no control over who copies the trade signals.
- Losing followers or copiers due to a fall in performance can create a cascading effect, leading to massive revenue erosion.
- The commissions and performance fees may fluctuate, and not all signal providers can earn the big bucks.
Copy Trading Brokers vs. Independent Service Providers – Differences
Traditional brokerages offer their users managed accounts, through which investors can invest their funds in master trader accounts. However, a copy trading account is a concept that only took off quite recently and was brought about by traders’ desire to look into other people’s trades to ensure that they are on the right side of the market. A few pioneering companies pounced on the opportunity to create copy trade or mirror trade systems.
Only a handful of brokers acted on the idea in its early stages. Today, however, we see many firms offering different types of mirror trade platforms and services, so we will compare and find the basic differences between the best copy trading Forex brokers and copy trading platforms offered by third-party companies.
| Copy Trading Forex Brokers | Third-Party Copy Trading Account Services |
|---|---|
| Full-fledged brokers who offer mirror trade services as a part of their brokerage portfolios. | Independent companies that work with brokers to offer mirror trade services. |
| Backed by regulatory protection and offer added robustness. | Not usually backed by any regulatory protection. |
| Some brokers may work with independent providers to support mirror trade systems. | Do not have the means to operate independently. |
| The fees of services and costs are set directly by the broker. | Third-party services usually do not have any say in costs or performance fees. |
| Order execution conditions are much better, due to the absence of any intermediary services. | Traders are required to connect to brokerage platforms through bridges, which can affect order execution conditions. |
| Brokers are directly compensated based on spreads and commissions. | Independent copy trading Forex platforms are compensated through affiliate commissions, trader subscription costs, and a share of performance fees. |
| Less risk of broker insolvency, thereby guaranteeing a secure trade environment. | Risk of insolvency is high, since independent companies may close shop at any time. |
| Switching between brokers may be difficult, since each broker has different terms and conditions. | These companies offer numerous choices, which makes it easy to switch between brokers and choose a company that matches your preferences. |
Are There Any Legal Hurdles to Signing Up for Mirror Trade Systems?
Automated mirror trade systems are legal; there aren’t any regulatory restrictions on using these tools in active FX trading. Of course, there may be legal implications of investing in the FX and CFD markets in certain regions, owing to the regulatory guidelines imposed by local governments. The regulatory compliance of brokers may also come into play, since it is always safe to deal with regulated and licensed brokers to offer FX and CFD products.
However, we can’t say the same for independent third-party service providers who offer automated mirror trade systems. Due to the lack of regulatory oversight on such services, most third-party companies operate as independent providers. Therefore, these services do not come under the regulatory supervision of any formidable authorities. To protect yourself from fraudulent operators, always ensure that the broker you choose with your preferred mirror trade system is regulated by a dependable regulatory organization.
Best Tips and Practices to Adopt When Opening a Copy Trading Account
The first step toward opening a mirror trade account is to find a dependable system that fits your specific investment goals and preferences. It could be a dedicated FX broker or an independent service provider that provides access to your preferred broker. As we have mentioned, always choose regulated companies, or choose from our recommended best copy trading Forex brokers, so that you can feel safe and secure while investing your capital in the markets.
Next, take some time to browse through the platform, to familiarize yourself with all the tools and functionalities that will come in handy while searching for the top signal providers in the social trade network. Most mirror trade systems offer comprehensive search tools to help you compare, evaluate, and select the master traders in the system that suit your goals. The best signal provider for you need not be the one who achieves the maximum returns or has the most followers. Even a low-risk signal provider with average returns can offer you trade ideas on your preferred instruments, which should help you achieve your goals if they are modest enough.
Summary
Follow all the risk and money management rules, and try to create a diversified portfolio with different signal providers. Investing in the FX and CFD markets is not all about out-and-out profits but rather managing your losses and holding on to your wins. Choosing among the best forex traders to copy is just a part of your trade journey; the rest depends on your risk appetite, money management skills, proactive intervention, and understanding of when to copy successful Forex traders and exit a trade. With time, you should reap the benefits of choosing a good Forex copy trading platform.