At InvestinGoal, we adhere to strict standards to ensure an unbiased review process. We conduct our reviews by examining each broker’s offering and performance across 4 key categories. A final rating is produced for each forex broker based on a total of 187 data points. Learn more about our review process and methodology.
We have analysed a range of copy trading platforms to help traders understand what copy trading is and identify the best option for them to get started. Copy trading is a sub-category of social trading however the services offered by social trading and copy trading networks differ in several key aspects.
Social trading is a general classification of a type of trading technique, whereas copy trading refers to those platforms that allow traders to automatically copy the trading signals of other investors and create a portfolio of traders.
For traders interested in finding a broker and trading platform that is less focused on a particular type of trading, we have also reviewed our best forex brokers overall for your benefit.
Table of contents
What is Copy Trading?
Copy trading is essentially a type of automated trading where you can automatically copy other traders. This means that as these other traders earn or lose money with their trades, you will do the same.
Copy trading is ideal for many types of trader whether you want to copy trade forex, or other markets. It can be a valuable trading technique for those who are just starting out in trading, or those who don’t want to dedicate a huge amount of time to managing their trades.
Anyone can start copy trading in the sense that any trader can choose to copy trades. If you want to be copied by others though, this is usually limited to the most successful traders.
Best CFDs and forex brokers for Copy Traders: 2022 list
Round-up of the best Copy Trading platforms
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money
|Broker||Min. deposit||Social Trading||Unlimited Trial|
*It depends on the broker
Best Copy Trading platforms
While it’s important to consider the most respected and well-regulated forex brokers for copy trading, you should also pay close attention to the platforms on offer to facilitate your trading. Important characteristics to consider include usability, accessibility and technicality to ensure you opt for the best platform for your trading techniques.
ZuluTrade is widely considered to offer one of the leading copy trading platforms in the industry. The platform is user-friendly, suited to those new or experienced in copy trading. It is available as both a web based platform, or on your mobile device for 24/7 accessibility.
Through ZuluTrade you can engage in copy trading directly through their platform and connect your brokerage account their broker choices available. Most major brokers will facilitate this connection. ZuluTradealso offer reasonable values for getting started. Their minimum deposit starts from only $100.
When it comes to copy trading, MetaTrader 4 is one of the most widely used and recognized trading platforms for copying signals across forex and other markets too. The minimum deposit required for MT4 will depend on the broker you select.
Just like trading forex or other markets with your broker, MT4 is one of the most robust trading platforms available. It can be downloaded as a desktop platform, used in your browser, or downloaded on your mobile and smart devices without any loss of functionality.
cTrader is another major trading platform similar to MT4 which is a major all-rounder and a top choice for copy signals and trading. Since cTrader is widely used by scalpers, the platform can provide a great chance for you to copy trade signals from some of the industry’s top scalpers. The quick order and execution time also makes cTrader perfect for ECN trading.
NinjaTrader is another you may choose for copy trading that is issued mostly for technical analysis. NinjaTrader is a more costly platform to utilise, though there is a free trial you can benefit from before investing. Their subscription starts from $400 and,depending on your choice of broker, you may be able to connect your account directly to NinjaTrader to trade directly from their website.
Tradency is another platform choice if you are interested incopy trading in forex and other markets. They are a more recent yet pioneering choice in the industry, having launched in 2005. Tradency offer mirror trading services as well as other auto-trading features which can make your copy trading life even easier, including robo-advisors and auto-trading platforms. If you want a more hands-off approach, then Tradency is likely a suitable choice.
Copy Trading history
Now that you have had the chance to look at some of the top copy trading brokers available for everything from copying forex signals, to stock traders, here is a closer look at the history behind copy trading.
Copy trading is a relatively new type of trading. Prior to this, only mirror trading was available which is still available through Tradency. When mirror trading, you trade through pre-built strategies which have been formulated by algorithms.
Copy trading is similar in many ways, and uses a lot of the same foundations. The difference with copy trading is that instead of just copying a pre-defined trading strategy, you can choose the best forex traders to follow and copy. In this way it is much more flexible and user-friendly, providing you with much more control over your decisions of when to copy forex signals and from whom.
Copy Trading vs Social Trading vs Mirror Trading
As we have looked at above, there are a few different types of trading available, which share some similarities and differences
Social trading is a hybrid form of copy trading that typically allows you to interact with other traders using a broker. This way, you can share ideas, signals, and even discuss how to copy forex signals and other points. These brokers can also provide detailed statistics which you can view for each trader before deciding to copy them or not. In this field, eToro is by far the leading social trading broker in the world. If you’re interested in knowing more about brokers like eToro, benefit from our article featuring every eToro Alternative.
Copy trading brokers allow you to copy the performances of other traders at that broker. This can take many forms. For example, you could choose to copy open trades from the person, or start from only new trades they make.
You are essentially investing in the growth of a particular trader, which can be much like an ETF type of investment. To be successful, you will want to choose the best copy trade broker, and traders possible. You can also choose how much to invest in a certain trader, and you will gain or lose proportionately to their performance.
A leader in this field and example when it comes to the best copy trade broker is ZuluTrade.
As mentioned above, mirror trading is a little more fixed in its operations than copy trading. Here, you can open positions automatically at the same moment the other traders do and the same goes for closing the trade. Mirror trading is more based on algorithms, auto-trading bots, and pre-defined trading strategies. Traders code certain trading signals and strategies and you can then choose whether or not to begin following these.
A pioneer in the area of mirror trading is Tradency. They still offer all of these types of services, and provide a range of trading signals which they have done for many years.
How Copy Trading works
When you start copy trading, it’s important to be informed about the process of doing so first
In copy trading, the trader (the person you will copy), opens a trade. The investor (you), then copies that trader. This usually happens automatically and without the need for any difficult interventions.
You will then win or lose along with the trader you have copied. If their positions grow, so will yours, and vice versa. One of the important points to note is that everything is proportionate, so you can invest whatever amount you like depending on the broker rules, and through copy trading, you will gain or lose proportionately.
One point here is that when choosing the traders to copy, you should take note of the position sizes they usually open, as this can impact your investment.
Let’s take a look at an example: If a trader opens trades on multiple assets where the average profit/loss is already at +10%, then you decide to invest $100. Finally the profit/loss moves to +15% so you close out your position. Of course you have only earned +5% because you started copying when the trader was already at +10% profit.
Why is Copy Trading popular?
Copy trading has hugely grown in popularity in recent years for a few key reasons.
One of the reasons copy trading is desirable for traders is that it is cheaper to engage in than mirror trading. Copy trading also gives you the chance to copy expert traders and should you trade through one of the best copy trade broker choices available you have access to top traders from around the world. The greater access your broker provides to top traders, the more diverse your portfolio.
Convenience is another factor ascopy trading does not require you to directly trade. This does not mean it is easier, it just means you leave the actual trading to be managed by someone else. You still, however, need to know the markets and choose the best traders to follow.
Copy trading provides the chance to copy some hugely successful traders and while it may seem like the best idea to always choose the most profitable, they may engage a high-risk trading strategy which does not fit your style or needs. It’s important to distinguish these “lucky” traders from real experts who employ a sound money management and risk strategy.
Copy Trading review
Once you choose a copy trade broker and plan to start copy trading for the first time, there are several factors to consider.
Demo accounts: try out the service
The first step if you are new to copy trading is to try out a demo account. Most of the best copy trade broker choices will offer a demo account, which are free with no risk to your real money, and also no obligation beyond trying out the account. You will also be able to see exactly what copy trading involves thanks to real time experience. Demo accounts can help prepare you for trading on a real account.
Copy Trading costs: minimum deposit and more
When it comes to the costs of copy trading, there are a few to consider.
The first of these is the minimum deposit that you will need. This varies depending on your broker choice, but most are around the $200 minimum deposit mark. Next, are the fees that you will pay as a copier. This is typically a fixed fee to the copier though this is often included in the spread or commission you pay on each trade. Copier fees are also the reason you may see that some copy trading spreads or commissions are slightly higher.
Usually, there are no additional fees when it comes to copy trading with any broker but it’s important to always double check first.
Markets and assets available when copy trading
Generally speaking, any assets made available by a broker should also be available for copy trading. In some rare cases, certain assets may not be available to copy trade, though this simply depends on the broker’s policy. Again, it is something you should always check with your broker before you invest any money or start copy trading.
Is Copy Trading legal?
As things stand, copy trading is completely legal and is offered in full compliance with laws and regulations by most of the best and well-regulated brokers around. This does not mean that regulations and laws will not change over time, but at the moment, copy trading is completely legal.
Copy Trading regulation
When it comes to regulation too, copy trading is well-regulated by most of the top regulatory bodies around the world.
The approach from many of the best copy trade broker names has changed a lot since the introduction of MiFID II regulations.With these regulations, copy trading platforms cannot approach brokers to connect with them. Instead, the approach must come from the broker.
There are also much stricter requirements around which traders can be copied. This is to stop the presence of “lucky” traders without real expertise and knowledge. Money protection regulations have also become tighter. The copy trading platforms can impose minimum amounts required for investment in a trader, and also limit investment in large positions depending on the equity of an account. The amount of control which the copy trader had over the copier is also now limited to the amount which is invested and no other controls beyond that point.
Does Copy Trading actually work?
Copy trading can be successful, however it is not a fool proof system. There is always the possibility of losing money as with every trading technique. Rather than thinking of copy trading as a forex trading copy and paste system, you should closely study both the broker and traders you will follow to give yourself the tools you need to succeed and manage risk.
How to start Copy Trading
Whether you are copying forex signals or stock traders, there are a few simple steps you can follow to get started.
First, you should choose the best copy trade broker that meets your needs. You can benefit from our top ten round-up where we review the best forex signals apps, taking into account the best copytrading brokers as well as the best copy-trading communities. From there, you can open a demo account to practice or deposit money into a live account. Once you’ve chosen a broker, you will need to choose the copy trader you want to follow and copy.
Copy trading is as simple as starting to copy the trader and stopping once you are satisfied with the profit or loss. It is, however, important to ensure you choose a suitable and profitable trader to follow.
How to find the best trader to copy
There are several factors to consider when choosing the right trader for you to copy:
- Find the right moment to copy a trader
It’s important to monitor a traders performance over time before deciding to copy them. It is usually best to avoid copying a trader during a strong positive streak or just after they have reached an earnings peak as this could indicate their positions have already reached maximum potential.
Instead, it can be recommended to start copying a trader once they open new trades or are on a slight downturn after long periods in positive territory.
- Risk rating is important
Risk management should always be a key consideration. Even though each broker will provide an algorithm to show whether a trader is risky or not, you still need to be able to determine it by your own scale.
This trader risk strategy scale will be from 1-10 and determine whether a strategy is risky or not to follow for investors. A risky trading strategy may have bigger returns, but can also lead to losses in the longer term. In this case, you need to decide what is best for you and keep in mind the risk to reward ratio and balance. Risking a lot to gain a little is a dangerous strategy which is often unbalanced, so try to find a trader who offers a strong balance of risk vs reward.
- Earnings and drawdowns
You may see copy traders who have pristine records of no losing trades on their account, however these should be avoided. Even the most successful traders suffer losses, therefore a non-losing record should be deemed as a warning sign. You should use your judgement here to decide when selecting a trader.
- Trader’s history
Consistency in copy trading is key. Try to stay away from those with huge earning peaks or great losses. Consistent returns will always add up to a better return over time.
- Keeping too many opened positions
The last point to note is that you do not want to hold too many open positions at once. Particularly if you are losing, it is best to limit your copy trading positions to just a few. This way, you can keep a good track on them and account equity. Having a stop-loss in place is also always a wise move. This keeps you from holding on endlessly to losing positions.
Sometimes it can also be good to keep some cash on the side. This is unused money in your account that you can use to take advantage of copy trading opportunities when they arise.
Risks of Copy Trading
Like all other forms of trading, there are risks when it comes to copy trading and potentially losing your money. Losses can occur in a variety of ways if you do not carefully manage your copy trading investments.
The trader you have followed may have made a mistake on the investments they have made. This is possible, just as it is also possible they could correct the mistake. This could also be due to an unexpected market trend that nobody could have anticipated in a volatile market.
If losses are mounting up though, it also may be possible that you have followed the wrong trader. At this point, you should make attempts to change the trader you are investing with.
Advantages and Disadvantages – Pros and Cons
Here are some of the key advantages and disadvantages when it comes to copy trading.
- Copy trading is efficient in that it does not take up a lot of your time. It’s perfect if you are too busy to monitor each and every market move yourself.
- You also have expert traders who are skilled to trade for you. This is ideal for all traders but particularly if you are a newer trader.
- Copy trading is both cheaper, and more flexible than mirror trading.
- Because you are relying on another trader, you have almost no control over the trading strategy which they are implementing.
Final thoughts about Copy Trading
To round up our thoughts on copy trading, it can be a great trading technique if you use your knowledge and control in applying it.
Copy trading is perfect if you are a busy person with little time to invest in trading yourself. You can practically recruit the best traders to trade on your behalf. If you are a beginner too, you have the benefit of copying experienced, expert traders which can lead to good results, and develop your own knowledge and skills.
Not only that, but if you are an expert trader who is copied by investors, you can also earn commissions from the trades you make.
What is copy trading?
Copy trading means opening and closing trading positions at the same time as the signal provider you decided to copy.
How do you copy traders?
First you have to open an account with a copy trading platform. Then, you must simply choose a trader (usually you can find them in a specific section of the platform) and invest a certain sum on them.
Is Copy Trading legal?
Yes, copy trading is legal. The only limitation is that only certified professional traders can be signal providers due to the risk of them being considered money managers.
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