Anyone with even a passing knowledge of the forex market will be aware of how complex it is, and just how easy it is to make costly mistakes. Forex is a multi-trillion-dollar-per-day market that is influenced by a myriad of factors, including economic megatrends that are virtually impossible for a retail investor to make sense of.
67% of retail investor accounts lose money when trading CFDs with this provider.
Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider
Between 74-89% of retail investor accounts lose money when trading CFDs with this broker.
In addition, some of the most reliable indicators of forex price trends tend to involve complex mathematical equations that can be difficult to get on top of even if you have a top-notch forex broker that can provide forex calculators for you. These are just some of the reasons why copy trading is now so popular among beginner and seasoned forex traders alike.
Copy-trading allows anyone to attach all or part of their forex portfolio to that of a top investor. Using automated trading software, you can make sure that each buy and sell order that you make is the exact same as some of the world's most successful and profitable traders.
That is why it pays to know the best copy trading brokers that you can choose from in the UK. Read on to find out everything you need to know.
First, it is worth properly breaking down what is actually meant by copy trading and how it is typically used in forex markets. It is essentially an automated form of trading that allows you to connect to the account of another trader or investor and mimic every trade and position that they execute, without any effort on your part. With a copy trading broker, you can use a wide range of indicators to view the most successful traders in a particular forex market that you might be interested in.
With copy trading, the goal is to exploit the skills of successful traders to bolster your own portfolio. With most brokers, you can view the trading history of successful market participants via a dashboard. You can also view and copy the trading activity of established institutional investors with some brokers, although you may need to pay an additional fee to access signals from top-tier traders.
In practice, copy trading is simple and straightforward. You simply select the trader you wish to mimic, click "copy", and attach a portion of your portfolio to this trader. You can either choose to dedicate a percentage of your portfolio to the copied trader, or you can place a deposit with that trader to be used automatically.
You will then receive signals whenever the copied trader opens or closes a position that your account can copy simultaneously. You can usually have the option to ignore a signal from a copied trader, giving you the final say over all of your buy and sell orders.
For example, let's say you want to start trading USD/CHF. As a niche currency pair, there might not be a substantial amount of data to work with, which is why you might want to use a copy trade for this particular pair.
You could use your broker platform to view the most popular and successful traders in USD/CHF at the moment. From here, all you would need to do is click "copy" and set how much of your portfolio you wish to dedicate to the copy trade.
From here, every time the trader buys or sells USD/CHF, your account will automatically do the exact same thing. This will continue indefinitely until you choose to un-link your portfolio from that trader, which can usually be done with a single click.
There are many potential benefits to using copy trading brokers, especially if you are new to forex trading markets. The most obvious benefit is that you can exploit the expertise of much more experienced traders that likely have more knowledge of certain currency markets than you. In addition, all copy trading is completely automated.
You can hitch yourself to another trader and then adopt a hands-free approach since the copy trading broker will automatically open and close trades on your behalf. In addition, you can also maintain full control over your portfolio, as you can always choose to ignore any action taken by a trader that you are copying.
Copy-trading can also be handy as it removes the emotional element from trading altogether. Emotional traders have a tendency to make costly mistakes, so you might find that it is better to have all of your trades automated via someone else. Although copy trading is far from a guaranteed path to success, it is a good way to diversify your currency portfolio, as well as an effective way to learn the ropes of forex trading.
While the benefits of copy trading might seem obvious, the risks might seem less so. Nonetheless, copy trading comes with substantial risks and it is essential that you understand these before you get started. First off, copy trading is not a sure thing and even the most widely followed traders make significant losses. Remember, when they lose, you also lose.
In addition, a top trader might open very large positions that you cannot afford to open yourself, meaning it is essential to ensure that you are only executing copy trades that are within your budget. It is also important to note that many brokers have a system wherein top traders earn a commission from every person that copies their successful trades. This commission is taken directly out of your profits and can be imposed in addition to any commissions you might owe a broker. It is for this reason why some believe that copy trading is not the most cost-effective way to trade forex.
Furthermore, copy trading isn't much of a hands-on way to invest, it may hamper the possibility of you learning the ins and outs of particular currency markets. You should not put all of your faith into other traders.
When looking for a copy trading broker, the most important factor to keep in mind is choice. First, you need to ensure that the broker you choose can offer a wide range of traders and investors that you can copy. You should check that you can perform copy trades in the exact forex markets that you are interested in.
Your broker should also offer transparent copy trading, allowing you to view the full and unfiltered trading histories of any market participant that you might wish to copy. Copy trades should be fully informed financial decisions, which is why your broker should be able to provide all of the data you need. A good copy trading broker should also offer copy trading for low deposits and minimum commissions, with zero-commission copy trading being the gold standard.
In order to help minimise risks from copy trading, you need to choose copy trading brokers that are fully licensed and that can offer transparent, cost-effective, and top-quality copy trading. For this, we have got you covered. Here are some of our favourite copy trading brokers in the UK right now:
AvaTrade is one of Europe's top forex brokerage platforms, with more than 15 years of experience and tens of thousands of customers. AvaTrade allows for copy trading on more than 200 assets, including dozens of major and minor forex pairs. All copy trading with AvaTrade is completed via their third-party DupliTrade and ZuluTrade accounts, which allow for simultaneous copy trading with a minimum deposit of $200.
One of the largest and most well-known forex brokerages in the world, eToro offers extensive copy trading and a huge amount of data on some of the world's biggest and most profitable market participants. You can also copy preselected eToro CopyPortfolios with a minimum deposit of $200. Furthermore, eToro provides discounts and advanced tips to traders that have a certain number of people copying them.
With a $100 deposit, you can open a Skilling account and start performing multiple simultaneous copy trades via their bespoke c-Trader platform, a purpose-built software suite specifically designed for seamless copy trading. There are dozens of forex pairs to choose from with c-Trader, as well as a massive range of retail and institutional investors that you can instantly begin copying.
In order to begin making successful copy trades today, you need to find a reliable broker that offers top-quality copy trading. For this, you have come to the right place. Simply head to our forex broker review pages to find in-depth and honest insights on some of the UK's top licensed brokers, including all of the latest information on the copy trading services and options available to you as a user.