Copy trading allows you to copy another trader´s actions on the trading platform. There are trading platforms available where automated tools makes it very easy to carry out copy trading, but you can also do it manually. Manual copy trading is slower and there is a higher risk of slippage (the prize changes before your trade is executed), but you do retain more control.
A common type of copy trading is the one where traders communicate their positions using signals via a social network or forum.
Is copy trading only for forex?
No, copy trading is available for a wide range of markets, including not just forex (foreign currency) but also things such as cryptocurrencies, stocks, commodities, and derivatives.
It is also worth knowing that CFD (Contracts for Differences) copy trading makes it easy to get exposure to a wide range of underlyings without ever owning them.
An easy method for doing copy trading is to connect your portfolio to someone else’s, and give the platform permission to open and close positions based on what´s happening in the portfolio you connected to.
Examples of trading platforms that support copy trading
MetaTrader 4 (MT4)
This is one of the most well-known trading platforms, and since it is a third-party platform you can gain access to it through a wide assortment of brokers. If you don´t like your current broker, you can sign up with another broker without having to get accustomed to another platform, which is a big plus for many traders.
The copy trading system on MT4 is based in signals. Select the Signals tab when you are logged into the platform, to get access to over 3,200 different signals. Some of the signals are available for free, while others come with a fee.
If you want to check out how it works without risking any real money, access the MT4 platform through a Demo Account and use your free play-money to sample the signal services and try out copy trading risk-free.
MetaTrader 5 (MT5)
MetaTrader 5 (MT5) comes from the same developer as MT4 and also supports copy trading. You can elect to follow actually human traders (called Masters) and they do not have to be signed up through the same broker as you. Signal subscription prices are fixed, so there are no surprises
Unlike MT4 and MT5, cTrader is a trading platform where copy trading is at the heart of the business model. cTrader was designed specially for copy trading, although you can do traditional trading here too.
It is very easy to compare the different available Masters here, based on factors such as risk-willingness, trading history and fees. Simply go to the Copy area on the cTrader platform.
As a follower, you enter exactly how much money you wish to allocate to copy a particular Master. Copying several Masters is allowed, and you set the sum for each of them individually.
Can I copy trade on my phone?
Yes, many of the trading platforms that offer copy trading can be used on smart phones and surf pads, either in the internet browser or through an copy trading app.
Apps for iOS and Android devices are for instance available for MetaTrader 4, MetaTrader 5 and eToro.
Important: If you want to use your mobile device for copy trading, we strongly recommend that you try the platform for free using a Demo Account first. That way, you can see how the copy trading works on a small touch-screen without risking any of your own money. If you don´t like the interface, navigation, tools, or something else, it is easy to move on to another platform.