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Is there still money to be made through copy trading?

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Once upon a time but not so long ago the words ‘financial markets’ painted a picture of suited men huddled over desks and phones intently watching black and white screens. Fast forward two decades and an exponential leap into the technological era later,  the financial markets are not only accessible from your sitting room, but to almost anyone who wants to trade and learn the craft can get involved. Even novice traders and those with limited time can trade, thanks to innovations like copy trading.

Currently, the foreign exchange market has an estimated turnover of $5 trillion worth of transactions daily. That ten-digit figure has people flocking to find ways to take a bite of potential profits by trying their hand at trading.  However, even though the practice of forex trading no longer requires a financial pedigree, a substantial amount of knowledge and experience is necessary to walk away with a profit.

To copy forex traders means to invest capital into the strategy of a suitable forex trader. Your positions automatically mirror theirs, and you pay an agreed percentage on any profitable trades. However, while you share all of the potential rewards, you also share all of the risks. So, choose your trader to copy carefully.

Copy trading means that anyone with only a basic understanding of the financial markets and forex trading, can access trading opportunities- without spending years familiarising themselves with the technicals and fundamentals of the market.   Copy trading also provides potential opportunities to those who lack the time to follow every market twist and turn. .

From a distance, it would appear that copy trading provides a blissful win-win solution to all parties involved, however traders who believe that to be the case often encounter problems.

The most important part of forex trading is understanding the risks involved. Leverage, not setting a stop loss or take profit order, or overestimating the movement of a currency, are some of the major mistakes that eventually lead traders to lose capital. Even though, as an investor in copy trading, you are not responsible for actual trading, it is vital to remember that even the best forex traders may experience losses. Monitoring the progress of the account and knowing when is the right time to withdraw your investment, is crucial.

FXTM’s copy trading programme, FXTM Invest, provides a complete breakdown to people looking to invest, at every stage of the process. Investors can begin searching for the ideal forex partner through the broker’s Strategy Manager ranking page, where suitable traders are ranked based on their overall profitability. The investor can then get more detailed information on the account through the Strategy Manager’s page; you will find details of risk level, commission, days active, average wins/losses are all publicly displayed. Once you have invested in a Strategy Manager, you will be able to monitor the progress of their account at any given time, and you are provided with a detailed statement of the trades that took place for the last 30-days.

Copy trading remains a viable means of earning potential profits in the markets, but only if used with full knowledge of the risks and requirements.

Discover copy trading and find your perfect forex match with FXTM Invest.

Disclaimer: This article comprises of personal opinions and ideas. It should not be construed as containing investment advice and/or solicitation for any transactions in financial instruments and/or a guarantee or prediction of future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available, and assume no liability as to any loss arising from any investment based on the same.

Risk Warning: Trading Forex and CFDs involves significant risk and can result in the loss of your invested capital. You should not trade unless you fully understand the true extent of your exposure to the risk of loss. When trading, you must always take into consideration your level of experience. If the risks involved seem unclear to you, please seek independent financial advice.