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Huzefa Hamid
Copy trading allows traders to copy positions taken by other traders. It developed from automated trading in 2005 and grew in popularity among retail traders.
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Social trading system that works with dozens of brokers
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Best broker for social traders and crypto traders : 75% of retail CFD accounts lose money
eToro was founded in the early days of the online retail Forex era, in 2007 – this broker occupies a unique space as the king of social and copy trading. eToro has a long track record and unique reputation to protect, although this image is more focused on its copy trading model than on any other individual feature, except maybe its special relationship with cryptocurrencies.
Unique Features
Headquarters
Cyprus
Regulation
CySEC, FCA, ASIC
Year Founded
2007
Type of Broker
Market Maker
Minimum Deposit
$200
Maximum Leverage
1:30
Type of Platform
Proprietary platform
eToro is regulated in Cyprus, the U.K., Australia, and the United States although its U.S. offering is firmly differentiated from its offering to the rest of the world.
eToro guarantees several benefits to anyone opening an Islamic account: no rollover interest or commissions on any trade contracts lasting for longer than 24 hours will be charged, and no commissions or fees are charged to Islamic accounts for account management. Notably, interest-free leverage is also offered to Islamic account holders.
eToro is a leading cryptocurrencies CFD broker. Following its 2019 acquisition of Danish blockchain company Firmo and Belgian crypto portfolio tracker application Delta, it released its cryptocurrency wallet for mobile devices. The proprietary sentiment indicator for digital assets based on Twitter activity presents a social trading tool millennials favor.
eToro Pros & Cons
Advantages
Excellent equity asset selection and broad cryptocurrency choices
Cryptocurrency wallet for Android and iOS
Twitter-based digital asset sentiment indicator
Simple social trading procedure
Disadvantages
Below average educational resources
Internal withdrawal fees plus higher core trading costs
Best all-around: high floating leverage + fast execution
We have made FXTM our top-rated broker because in addition to its lengthy track record, it enjoys a very high level of regulation and reputation, and it offers a highly competitive fee structure which tends to keep down the cost of trading.
Unique Features
Headquarters
Cyprus
Regulation
CySEC, FCA, FSC, CMA
Year Founded
2011
Type of Broker
Instant/Market Execution
Minimum Deposit
$50
Maximum Leverage
Flexible
Type of Platform
MetaTrader 4, MetaTrader 5
FXTM, or “ForexTime”, has been around for a long time: they were founded in 2011. Recent years have seen them continue to steadily expand their business, and they are well- regulated by the U.K., Cyprus, Mauritius, and South Africa. The brand is owned by private companies incorporated in the U.K., Cyprus, and Mauritius. Customers of FXTM have access to more than 57 Forex currency pairs and crosses, precious metals, the major energies, equity indices, big cryptocurrencies, and a few individual American stocks. Talking of stocks, FXTM are quite unique in the area of trading stocks, as they enable direct trading through real legal ownership, not just wrapped as CFDs like almost every other similar brokerage offers.
FXTM offers traders a choice between two of the most popular execution models: customers may open either an ECN-type account, or one that trades by “straight-through processing”. Clients have a straight choice between two trading platforms, with both MetaTrader 4 and MetaTrader 5 on offer.
Through their Mauritius regulator, FXTM offer leverage as high as 1000 to 1. In the U.K. and Cyprus, they are limited by law from offering more than 30 to 1.
If you are looking for a broker with a good copy trading program, it is worth taking a serious look at FXTM’s “FXTM Invest” copy trading program.
Founded in 2011, OctaFX is a “Straight Through Processing” (STP) broker, which means they do not have an internal dealing desk. They simply connect buyers and sellers directly. With this model, OctaFX aims to be more cost-effective than anyone else in the market. They offer low spreads and claim 97.5% of trades are executed without slippage.
OctaFX offers their clients a choice of three Forex trading platforms: the world’s most popular MetaTrader 4 (MT4), MetaTrader 5 (MT5), and cTrader. All of these can be traded as a desktop application, and on Android and iOS devices.
Unique Features
Headquarters
Saint Vincent and the Grenadines
Regulation
FSA
Year Founded
2011
Type of Broker
ECN/STP
Minimum Deposit
$50
Maximum Leverage
1:500
Type of Platform
MetaTrader 4, MetaTrader 5, cTrader
OctaFX is an unregulated broker but continues to earn the trust of traders around the globe, with more than 1,500,000 accounts opened. One reason for the ongoing success of this market maker is appealing bonus campaigns. This broker paid out almost $3,000,000 in bonus funds. OctaFX offers traders the MT4, MT5, cTrader, and a proprietary mobile trading platform. OctaFX additionally grants their clients Autochartist, but traders require a Silver Level in the Status Program. Traders have a choice between fixed and floating spreads, and the overall cost structure remains competitive.
Asset selection remains the distinct weakness at OctaFX, making it most suitable for new retail traders. A series of short educational articles offers a basic Forex introduction, and this broker maintains an excellent arsenal of research and analytics tools.
OctaFX Pros & Cons
Advantages
Well-regulated globally, with the Bank of Ireland as the primary regulator
Low minimum deposit and in-depth educational tools
Social trading system that works with dozens of brokers
ZuluTrade is one of the best copy trading platforms available globally and maintains a leadership position in that field. It works together with more than 35 brokers, offering unparalleled access to traders and strategies exceeding 25,000,000. Diversification remains one of the most defining strategies for copy traders, and ZuluTrade delivers. Most aspects of the trading environment, like asset selection, leverage, cost structure, and minimum deposit, remaindependent on the partner broker the trader selects. ZuluTrade provides the infrastructure and connects via the MT4 trading platform. Brokers usually increase the spreads on ZuluTrade accounts, which is a fact that traders must consider.
Unique Features
Headquarters
Greece
Year Founded
2007
Type of Broker
38,39,139
Minimum Deposit
Broker Dependent
Maximum Leverage
Broker Dependent
Type of Platform
MetaTrader 4, Web-based
Copy traders benefit from innovative tools including ZuluGuard and Automator. They protect copiers from non-performing signal providers and automate the copying process, respectively. The subscription-based Combo Plus providers copy traders with an option for full automation of copy trading and a competitive edge. ZuluTrade executed more than $1.2 trillion in trading volume, and the compensation model for signal providers remains superior to other copy trading platforms. It became a licensed portfolio management company in the EU in 2015, after receiving the EU Portfolio Management License, which competitors do not possess. In 2017, ZuluTrade became part of the Chinese-based Formax Group.
ZuluTrade Pros & Cons
Advantages
Excellent social trading tools with a distinct competitive edge
Two compensation schemes for profitable signal providers
Superior choice of strategies across 35+ brokers
A licensed portfolio management company
Disadvantages
Pressure on signal providers to perform due to compensation requirements
Trade360 does not offer direct copy trading but developed its own CrowdTrading technology, incorporated into its proprietary WebTrader. It monitors trading activity based on its clients and alerts traders based on increases in trading and order volume. The information appears in the sidebar of the WebTrader with a function to take a position in the asset. Traders may also use the copy trading function inside the MT5 trading platform, which allows automated trading. New traders will benefit from the educational content, and Trade360 dedicated one lesson to trading psychology, which many brokers omit.
Unique Features
Headquarters
Cyprus
Regulation
CySEC
Year Founded
2013
Type of Broker
Market Maker
Minimum Deposit
$500
Maximum Leverage
1:30 retail, 1:400 professional
Type of Platform
MetaTrader 5, Proprietary platform, Web-based
While this broker maintains licenses from two regulators, most international clients will trade with the unregulated entity. Trade360 features fixed spreads in a commission-free trading environment that combine for a relatively high-cost structure. The asset selection outside equity CFDs, which is average, is not sufficient for most traders. While the minimum deposit is $250, traders who wish to use the MT5 trading platform must have an account balance of $1,000. Full functionality is available from $5,000, making it the highest in the industry. The STP order execution model ensures conflict-free trading, but the multi-tier account structure can be challenging.
The sector peaked a decade later, as most realized that it is not as profitable as advertised. Since between 70% to 85% of traders lose money, the majority copies losses. After three years of contractions, copy trading embarked on yet another push higher, especially with the emergence of cryptocurrency trading. Millennial traders pile into copy trading platforms, bypassing necessary Forex education.
Many traders who favor copy trading do so from their mobile devices. Since copy traders do not trade, they do not require the screen space to analyze assets. Copy trading platforms provide performance statistics, operating history, number of copiers, capital following a signal provider, and a risk score. After selecting a trader to copy, copy traders allocate funds to follow the chosen trader. The platform provider will duplicate all actions taken by the signal provider to the copied portfolio, usually proportional to the dedicated capital. Copy traders can stop following a trader or make manual adjustments to the stop loss and take profit levels if desired. Copy trading created a sub-sector of trading, and millennial traders favor the approach, which is not without risks and has failed to deliver consistent results.
Is Copy Trading Legal?
It depends on the jurisdiction, but brokers offer it as a legal service. In 2014, the UK's FCA had the intent to classify copy trading platforms as investment managers.
How Does Copy Trading Work?
Copiers select traders to follow and allocate capital to the strategy. The copy trading platform then copies all actions taken by the trader to the portfolio of the copier.
Copy Trading & Mirror Trading Differences
Both are similar but mirror trading copies the entire strategy without human input or interaction with traders. Copy trading allows copiers to choose traders to copy, adjust copied trades, and provides more freedom overall.
Trading Strategies
Mirror trading is more suitable for advanced traders with more substantial portfolios. It can consist of the input of hundreds of traders and covers more macroeconomic data. Copy trading can follow just one trader and is a better approach for individual traders.
Trading Volumes
Retail traders transact in significantly smaller volumes than professional ones, making copy trading the right choice. While the former may place trades of 100 units, the latter commences from 10,000 and upwards, requiring more capital.
Institutional & Retail Clients
Mirror trading originated in professional trading circles, while copy trading emerged at online brokers catering to retail clients.
Copy Trading Advantages
Copy trading is for individuals who want exposure to financial markets but who lack time to learn how to trade. It is a form of account management, and several regulators investigate the reclassification of copy trading platforms as investment advisors. Copy traders should always monitor their accounts and never trust a strategy blindly.
Between 70% and 85% of all retail traders lose money, and most copiers copy that performance. Most copy trading platforms have no compensation model for traders or demanding conditions that pressure them for increased performance, leading to long-term losses. Traders may also quit at any time, leaving copiers to scramble for new providers.
Market Liquidity with Copy Trading
Should traders take positions in illiquid assets, volatility can rise and cause unacceptable drawdowns on portfolios. Since copiers have no input, they may get higher risk exposure than desired.
Factors to Consider When Choosing a Copy Trading Broker
I recommend that copy traders consider the below items when researching the best copy trading platforms, or to save time, pick one from our list where we have done the hard work for you.
Commissions & Fees
Many brokers increase the spreads or commissions on their copy trading platforms to compensate traders. Others generally have higher fees for their copy trading service. Traders should find a broker that maintains a highly competitive cost structure to increase their profitability.
Funding & Withdrawal Methods
Traders should always trade with a broker that offers the funding and withdrawal methods they prefer. Low-cost online payment processors offer the best service for most traders.
Customer Support
While most traders never require customer support, copy traders should ensure 24/5 assistance is available, as copy trading platforms may experience issues or copiers need help navigating the options.
Comprehensive Trader Resources Offering
Copy trading platforms that offer comprehensive trader resources and trading tools allow traders to achieve better returns. Therefore, copy traders will benefit from a more competitive trading environment.
Regulation
Traders should always trade with a regulated broker and ignore unregulated ones, regardless of the offer. There are rare exceptions, but traders must proceed with caution.
Automated Copy Trading
After a copier selects the desired trader or traders and allocates capital to each, the copy trading platform will mirror all trades taken by the trader. The process is 100% automated without the intervention of the copier. It is the most used form of copy trading.
Semi-Automated Copy Trading
Copiers who wish more input will prefer this option. It allows copiers to review all positions of the trader in real-time and choose which ones to copy. Copiers then may either choose to automatically close copied trades or adjust stop loss and take profit levels.
Manual Copy Trading
Copiers who wish to place and manage trades but require trading signals will engage in manual copy trading. Vast resources exist, free and for a fee, and copiers have full control over all aspects of trading.
Tips for Successful Copy Trading
Here are four tips for successful copy trading to ensure copiers get the best outcome.
Select the right broker - It forms the backbone and safety net for any copy trader. We recommend selecting the right broker for your trading needs with a trustworthy reputation and a trader-friendly cost structure.
Find the right account - Trading from an account suitable to your capital will allow improved trading results.
Choose the ideal signal provider - This is the most challenging aspect. We urge traders to research each trader and select one with similar account size.
Proper settings - Copiers must implement the same settings as the traders they follow. Otherwise, the copied trades may result in losses.
Our Methodology
We reviewed over 100 brokers in-depth based on eleven criteria from the perspective of a trader. Each research consisted of over 2,000 words and lasted more than ten hours. We ensured the most comprehensive approach to identify the best copy trading platforms.
The Eleven Criteria Used in Our Research Consist of:
I’m a trader and manage my own capital. I trade the major Forex pairs, some Futures contracts, and I rely entirely on Technical Analysis to place my trades. Today, I am also a Senior Analyst for DailyForex.com. I began trading the markets in the early 1990s, at the age of sixteen. I had a few hundred British pounds saved up (I grew up in England), with which I was able to open a small account with some help from my Dad. I started my trading journey by buying UK equities that I had read about in the business sections of newspapers. The 1990s were a bull market, so naturally, I made money. I was fortunate enough in my early twenties to have a friend that recommended a Technical Analysis course run by a British trader who emphasized raw chart analysis without indicators. Having this first-principles approach to charts influences how I trade to this day.
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