What is Copy Trading?
Copy-trading, also known as social trading, is a way to automate your trading by copying the trades of other traders. It is often used by newbies that might not yet know how to trade, with the added benefit of helping to teach them on the way. For more experienced traders, it can enable them to step away from their screens if they need to, as all trades are automated.
The goal of copy trading, like regular trading, is to open positions on various financial markets including FX, CFDs on Stocks, Commodities, Indices, and Cryptocurrencies, and then to close the position, hopefully, once the value of the asset has moved higher. Although, much like trading for yourself, here you can also incur losses too.
This could be a good option for those who lack the time or experience to invest by themselves. For this reason, many brokers offer the facility of copy trading. There are a variety of platforms offering copy trading services, and while some are manual, others are fully automated. This enables you to sit back and watch the action.
Advantages of Copy Trading
There are many advantages to copy trading. Here we have covered just a few:
- It allows first time traders to familiarise themselves with the financial markets and gain the confidence to trade.
- It helps new traders to learn how to trade, by watching the actions of other, sometimes more experienced traders.
- It enables more experienced traders to take part in the market, even when they are too busy, and not able to invest the time and research they should normally devote to trading.
- You can copy trade on various instruments, including foreign exchange, stocks, commodities, and more.
- It creates a community of traders, beginners and experienced alike, who can exchange ideas, strategies and endeavour to improve their trades together.
What are Trading Signals?
With trading signals, you receive notifications which are like suggestions of what to trade, when to enter or exit the trade, and what stop loss or take profit orders to implement. You may receive them by SMS, email, or through a dashboard.
Of course, it’s important to use a signal service that gets more successful than unsuccessful trades. However, like all things related to trading, there is always the risk of losing your funds, as no one can read the future. Usually, Signals are generated on the basis of a variety of technical indicators, especially strong signals.
You can of course create your own signals, by using technical analysis and implementing studies and indicators onto your trading charts.
Who Provides the Trading Signals?
Pips Forex uses top-quality sources for its copy trading. These parties include hedge funds, expert brokers, and money managers. This means that if you use copy or mirror trading with Pips Forex, you are essentially gaining valuable access to seasoned traders, allowing you to copy their trades and benefit from their experience.
Taking advantage of this trading strategy can be highly lucrative. In fact, many social traders, new and experienced, have had the opportunity to gain direct access to the top traders on the platform and have increased their trading success significantly.