Are you looking for the best Copy Trading platforms for forex copy trading and CFD copy trading?
Then our Top 5 is the place to start.
We have created another top 10 of the best Social Trading networks, but we still wanted to dedicate a top 5 specifically to Copy Trades platforms.
Simply because Copy Trading specifically is a sub-category of the broader Social Trading, although often these terms are confused or used thinking they have the same meaning (you can read our post about what is Copy Trading to fully understand what we are talking about).
In our ranking of the best Social Trading networks you can find the best companies of this main category, although they may differ a lot between them for types of services offered. Consider it a kind of general classification. In this ranking, instead, you’ll find only the best brokers that offer pure copy trading services, with which you can automatically copy the trading signals of other investors and create a real portfolio of traders.
Let’s get started.
(Want to take a look instead at some classic forex brokers? See our best forex brokers ranking)
Table of contents
What is copy trading?
The very first place to start if you are copy trading, is to answer the question of, what is copy trading?
Well, copy trading is essentially a type of automated trading. With this type of trading 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. If you are just starting out in trading, or you don’t want to dedicate a huge amount of time, then copy trading may be the perfect answer for you.
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 Copy Trading Platform 2020 to copy traders
Here are our top 10 best forex adc CFDs Copy Trading Platform 2020.
Copy Trading Brokers – Our Comparison
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 Platforms – Mobile Apps
Before looking at the best copy trade broker options for you, it is great to get an idea of some of the top trading platforms which can facilitate your successful copy trading with your broker. Here is a look at some of the top choices.
When it comes to copy trading, ZuluTrade is widely considered to be the best copy trading platform. This platform is very user-friendly and ideal if you are new or experienced in copy trading. It is available as both a web based platform, or on your mobile device.
Through ZuluTrade you can engage in copy trading directly through their platform and connect your brokerage account with many of the best copy trade broker choices available. Most major brokers will facilitate this connection. With ZuluTrade it is also good value getting started. Their minimum deposit starts from only $100.
When it comes to copy trading, MetaTrader 4 is one of the most used, and recognized trading platforms in this area to not only copy forex signals, but across other markets too. With MT4, the minimum deposit required 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 as web-based, or 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 also a top choice for copy signals and trading. Since cTrader is a very popular trading platform used by many scalpers, this can be a great chance for you to copy trade signals from some top scalpers. The quick order and execution time makes it perfect for ECN trading, and that’s another great advantage when trading on this platform.
NinjaTrader is another you may choose for copy trading. The trading platform is used mostly though for technical analysis. It is also costly though there is a free trial you can avail of. The subscription starts from $400. 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 to copy trade forex and other markets. They are a pioneering choice in the industry, having launched in 2005. They offer mirror trading services as well as other auto-trading features which can make your copy trading life even easier. These include robo-advisors and auto-trading platforms. If you want a more hands-off approach, then Tradency may be the perfect choice for you.
Copy trading History
Now that you have had the chance to look at some of the top copy trading brokers choices on the market which can help you do everything from copy forex signals, to copy stock traders, let’s take a closer look at the history behind copy trading.
In fact, copy trading is a relatively new thing. Prior to this, only mirror trading was available. You will note that this form of trading is still available through Tradency. With mirror trading, you are trading 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. Copy trading essentially gives you much more control over your decisions of when to copy forex signals and others, and also 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 under the umbrella of copy trading, which share some similarities, but can also be quite different. Here we will take a more in-depth look at each.
Social trading is a kind of hybrid form of copy trading. It typically allows copy trading with the addition of the fact that you can interact with the other traders at the broker. This allows you to 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.
Again, looking at the question of what is copy trading. WIth a copy trading broker, you copy the performances of other traders at that broker. This can take many forms. You could choose to copy open trades from the person, or start from only new trades they make.
With copy trading, you are essentially investing in the growth of a particular trader. This can be much like an ETF type of investment. So 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. The same goes for closing the trade. Mirror trading is much more based in algorithms, auto-trading bots, and pre-defined trading strategies. Traders code certain trading signals and strategies. You 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
Of course when you start copy trading, one of the first, and most important things to be informed about is of course the process of copy trading. So here is a look inside how it happens:
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 so popular?
Copy trading has grown in popularity a lot in recent years. There are a few key reasons as to why it has become so popular.
First off, it is cheaper to engage in copy trading than mirror trading. It also gives you the chance to copy expert traders. Some of the best copy trade broker choices feature top traders from around the world. This can add great diversity to your portfolio.
Convenience is another factor. Copy trading does not require you to directly trade. This does not mean it is easier or simpler, it just means you leave the actual trading to someone else. You still need to know the markets and choose the best traders to follow.
Copy trading does give you the chance to copy some hugely successful traders too. This may seem like the best idea to always choose the most profitable. For example if you are a forex trader, you may think these are the best forex traders to follow. In reality, they may engage a high-risk trading strategy which does not fit your style or needs. This is always something to look out for. You need a keen eye to distinguish these “lucky” traders from real experts who employ a sound money management and risk strategy.
Copy Trading Review
Next we will take a closer look at some of the key points to expect once you choose the best copy trade broker and want to start copy trading for the first time.
Demo accounts: try out the service
The very first ideal 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. These accounts are free and 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 real copy trading is like thanks to real time experience. This should help prepare you very well for trading on a real account.
CopyTrading costs: Minimum deposit and more
When it comes to the costs of copy trading, there are a few things to consider.
The first of these is the minimum deposit that you will need. This varies depending on your broker choice, but most usually 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. This is also the reason you may see that some copy trading spreads or commissions are slightly higher.
There are usually no more additional fees when it comes to copy trading with any broker though you should always double check first.
Markets and assets available when copy trading
Generally speaking, with the best copy trade broker choices, all of the assets made available at the 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 worth double checking with your broker before you start copy trading.
Is Copy Trading Legal
As things stand, copy trading is absolutely legal. It 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 now can approach brokers to be connected 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 also has 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?
The all important question which you will inevitably ask is, does copy trading work? The answer is the same as with many forms of trading, it does work, but it is not a fool proof system. There is always the possibility of losing money as with every trading technique. It is important then that, more than just thinking of it as a forex trading copy and paste system, that you actually study both the broker, and traders you will follow to give yourself the tools you need to succeed.
How to start Copy Trading
Whether it’s how to copy forex signals, or others like copy stock traders, and everything in between, then there are a few simple steps you can follow to get started.
First, you should choose the best copy trade broker you can who meets your needs. From there you can open a demo account to practice, or deposit on a real money account. The next step is to choose the best copy trader you want to follow and copy.
With that it is as simple as starting to copy the trader, and stopping once you are satisfied with the profit or loss. It is not just as simple as choosing any trader though.
How to find the best trader to copy
Here are a few tips to follow when choosing the best trader for you:
- Find the right moment to copy a trader
You have to monitor a traders performance over time before deciding to copy them. It is usually best to avoid copying during a strong positive streak or just after they have reached an earnings peak. This could indicate their positions have already reached maximum potential.
It may be best 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 is always a key area. 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/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 good balance of risk vs reward.
- Earnings and Drawdowns
You may see copy traders who have pristine records of no losing trades on their account. These should be avoided. Even the most successful traders suffer losses. A non-losing record is a warning sign that something is too good to be true. You should use your best 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 you 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 is also good to keep some cash on the side. This is unused money in your account that you can use to take advantage of opportunities when they arise.
For more information and detail on these points, feel free to check out our comprehensive copy trading guide.
Risks of copy trading
Like all other forms of trading, of course there are risks when it comes to copy trading. The risk here is losing your money. This can happen 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 we have found when it comes to copy trading.
- Copy trading is very efficient in that it does not take up a lot of your time. 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.
Our final thoughts about Copy Trading
Rounding up our thoughts on copy trading. We have answered the question of, does copy trading work, with a resounding yes. 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 can have the benefit of copying experienced, expert traders which can lead to good results, and developing 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. It is clear then, that is applied in the right way, copy trading can be a win win situation for all involved.