What is Copy trading in Forex? Introducing Trendo's copy trading platform

Copy trading is a process in which the trades of a professional trader are executed simultaneously on several other accounts.

Copy trading in Forex is one of the attractive investment methods most brokers offer. Copy trading is a feature in which trades are executed by a professional trader simultaneously on other accounts. We will review the copy trading system and its advantages and disadvantages. Stay tuned.

Contents

What is Copy trading in Forex?

In the copy trading system, a successful and professional trader makes trades in his account, and the same trades are copied and executed simultaneously in the accounts of people connected to this account. The copy trading system is an opportunity for investors to share in the profits of a professional trader by paying a small fee.

The trader who trades in the copy trading account is called the account manager, and the people whose transactions are copied to the account of the account manager are called investors. In copy trading accounts, for example, if the account manager opens a buy position in the gold symbol, gold is bought in all investors' accounts simultaneously, and whenever the account manager tries to close the transaction, this transaction is closed immediately in all investor accounts. However, in the copy trading system, investors can control their accounts. For example, an investor can close the trades the manager has made in their account and even open new trades. Generally, in the copy trading account, investors are in control of their accounts and can change transactions.

How does the copy trading system work?

In the copy trading system, the account manager and investors cooperate with each other on a broker's platform, and this is an opportunity for both parties to profit from each other's benefits. Further, we will introduce the account manager, investor, and broker.

Copy trading Trader or Account Manager

Users with high trading skills and ability in trading, and with positive trading results, can use the brokers' copy trading system in the forex market to attract more capital for trading and take over the management of investors' accounts. The account manager or copy trading trader must present his proposed plan and terms of partnership to attract investors on the broker's safe platform. In his proposed plan, the account manager can explain topics, such as transaction fees, his trading strategy , how to manage capital, his level of experience and skill, trading results, etc., to attract capital.

The account manager in the copy trading system, in addition to earning profit through transactions in his account, in exchange for making transactions for investors, also participates in a part of their profit and receives a percentage. Note that the amount of commission that the account manager receives depends on the type of copy trading account and the conditions and rules of each broker and is not the same for all brokers.

Investors in copy trading system

Users who, due to lack of skills, insufficient experience, or time, do not want to trade in forex but are interested in investing in the forex market, can invest in the forex copy trading system. Investors can invest in the broker's safe space by checking conditions such as the fee and resume of copy trading account managers. You should thoroughly check the terms of cooperation with the account manager and get enough information about his trading strategy and capital management style if you intend to invest in copy trading strategies. Generally, choosing a suitable account manager requires a lot of scrutiny and care, because if you trust someone with little experience, you might bear heavy losses.

The broker's role in the copy trading system

Brokers provide a secure platform for investors and traders to cooperate in the copy trade system. Also, brokers offer a space for communication between account managers and investors, so investors can choose a professional account manager by reviewing trading accounts.

Traders and investors should be careful in choosing a broker for a copy trading account because if there are any errors in the broker's infrastructure, both parties will face losses. The most common problem of brokers providing copy trading services is the low trading speed because any delay in the trade execution will be detrimental to investors. Trendo Broker has provided the best infrastructure and tools to solve this problem with a significant investment in this field so they can use the copy trading system without delay and in the best conditions. Therefore, traders and investors can use the Trendo copy trading platform without worry and experience the unique joy of cooperation in trading.

As mentioned, choosing the right broker is very important in copy trading in forex, because if the transactions are not copied correctly, it may cause losses to the investors and the account manager. For example, in the broker, the trader or the account manager makes a gold buy transaction at $1,820, but due to the low speed in copying the transactions by the broker, the buy transaction may be made in the investor's account at $1,822. Therefore, in choosing a broker for copy trading, the account manager and the investor must be careful and ensure the security and speed of the broker's copy trading system.

Usually, brokers have special rules for copy trading, and traders and investors must read these rules before opening an account with the broker.

Read more: Copy trading rules in Trendo

Mirror trading in Forex

Like copy trading strategies, Mirror trading is designed to execute trades of an account manager (Master) in other investor accounts (Client). But unlike copy trading, investors in mirror trading are not allowed to manipulate trades, and only the account manager can change or close trades. The second difference is that in mirror trading, all transactions and orders are analyzed and executed directly on the server of the service provider company based on advanced trading algorithms, but in copy trading, transactions are first recorded in the account manager's account and then sent to the investors' account through the company's server. That is why the transaction execution speed in mirror trading is higher than copy trading and has higher accuracy. Generally, mirror trading is designed for large investment firms, not retail traders.

Social trading in Forex

Social trading is one of the terms always used next to copy trading and mirror trading. Social trading is also a form of copy trading and is offered in an online platform, which is also known as the traders' social network. On these platforms, many traders worldwide with different insights into trading are presenting their trading ideas. You can get to know various and diverse views of the trading community and improve your trading knowledge by working on these platforms, meeting professional traders, and copying their trades.

The most important point to be active in these social networks is that not all people on these platforms are professionals, and some may publish false information about their transactions. That is why you should be careful in choosing an account manager, and not copy someone's trades based only on the profit amount. The most important parameter in selecting a professional account manager is his experience in trading. You must not copy trades that are only a few months old.

The next important parameter for choosing a suitable account manager is the amount of his capital. The more capital a trader has, the more credit he will have. For example, a trader who earned 15% profit with a $50,000 account has more credit than a trader who earned 100% profit with a $200 account.

What is a PAMM account in Forex?

In the PAMM account, investors will be connected to the account of a successful trader with specific conditions and by agreement. In the PAMM account, the transactions in the investor's account will be exactly copied and executed, and investors will deposit a specified and agreed percentage of the transactions' positive result in a specified period to the trader's account as a fee. In the proposed plan, the account manager determines his trading fees for the investors and will receive a certain percentage of the trades' profit that are closed with profit from the investors' account as a fee. However, the account manager will not receive a commission if the trades are closed at a loss. Receiving the manager's fee for a PAMM account can be variable, and those who have significant capital usually pay a lower commission percentage to the PAMM account manager.

Read more: What is a PAMM account in the forex market?

What is a copy trade account?

In addition to offering a PAMM account, Trendo Broker offers its customers another copy trading system type called a copy trading account. In this type of account, investors will be connected to the account of a successful and capable trader with a specific fee, and the trader's transactions will be exactly copied into the investors' account like the PAMM account. In the copy trade account, investors pay their membership fee to the trader monthly, and the amount of commission received by the account manager is not related to the amount of profit and loss from trading, unlike the PAMM account.

Features of the best copy trading in Forex

In choosing a copy trading account, the account manager and investors should note some important points. Further, we will mention the most important features of the copy trading account.

1. The most important thing that account managers and investors should note is choosing a reliable broker and platform. The chosen platform must have high speed, accuracy, and security in executing transactions and offer the lowest spread and fees . Also, account managers and investors must be able to communicate with each other transparently on this platform, and the broker must consider the interests and financial security of investors and account managers. In this regard, Trendo Broker provides one of the best copy trading platforms, and traders and investors can use this service confidently.

2. Investors should be careful in choosing a trader or copy trading account manager and must pay attention to all parameters, such as continuous profit, long-term returns, number of trades, risk management method , trader's score, fee amount, and conditions of his cooperation. Investors should consider all the mentioned points and not decide based on only one parameter because the copy trading process involves financial risk and does not have a guaranteed profit.

3. Professional traders who can manage a copy trading account well should choose a copy trading platform that allows them to fully promote and introduce themselves to attract capital.

4. The forex market also carries risks like any other financial market. Both investors and traders should pay attention to the trading risk and the possibility of loss in addition to profit opportunities. Not only in the Forex market but in any market, one should not expect high and unreasonable profits because large profits also increase the possibility of losing capital, so one should have reasonable and realistic expectations from the market.

Copy trading Advantages in Forex

• Copy trading is an attractive opportunity for investors to profit from the forex market without the need for trading skills.
• Copy trading is an attractive opportunity for professional traders to attract investors.
• At Trendo, investors can compare PAMM and Copy Trade account managers and make an informed choice.
• In Trendo, it is also possible to diversify transactions and invest in several accounts.
• In Trendo, investors can withdraw their capital from PAMM and Copy Trade accounts anytime.

Copy trading Disadvantages in Forex

• No trader is always profitable, and there is also a possibility of starting losing periods for him.
• There is a possibility of heavy losses if the account manager does not comply with capital management. That is why, in Trendo, account managers must top up their trading accounts to perform better capital management.

Summary

In this article, we fully introduced the copy trading system in the forex market and reviewed its advantages and disadvantages. Copy trading is a win-win system because professional traders attract capital on this platform, and investors can earn good profits. The only requirement is that investors choose professional traders on a safe and fast platform. Finally, we recommend you see the necessary training before participating in the copy trading system and choose a professional account manager.