Copy Trading

Copytrading is an automated investment methodology where you have the option to “copy” every action done by a selected trader. But in reality, it just allows the user to mimic everything a trader does, from strategies to picking open positions and such, in hopes that they can earn a profit.

Trading is risky and unpredictable, you may end up with some good trades and make a profit or lose some money because of a bad trade. With Copy trading, it lets you benefit from the experience and decisions from more experienced traders in the market. This could be done via a signal service, an automated trading bot (ea) or a platform that manages investments and returns. 
Here at Trade Wise we aim to test and review various types of copy trading and help investors find the genuine platforms where high returns can be achieved. Whilst copy trading in principal sounds fantastic, in reality there are a lot of services which have high claims but fail to deliver, and you can never be too careful when investing money in such platforms. 

There are lots of different types of copy trading, and they all work slightly differently. There are many platform where you can copy multiple traders in one account, and some of these include the likes of eToro and Zulutrade. Then there are completely automated platforms where you simply deposit funds and everything else is taken care of for you, such as Yieldnodes. Then there are trading bots that will execute trades in an MT4 account completely on autopilot, such as Ranger EA (the best Forex Robot?). Lastly, there are signal services that either send out trade signals from an experienced trader (like Gorilla Trades) or indicators that automatically send out signals based on predefined parameters. All of these types of copy trading work differently, but the main requirement is that they do not need an investor to learn to trade, or indeed to sit and read charts all day waiting for market conditions to be right and then manually placing a trade. It is therefore ideal for beginners, or even people with more experience who want to profit from financial markets such as stocks and forex, without becoming a fulltime trader.

Copy trading in principal is a great way to make money. It enables investors to copy highly experienced traders and (in theory) make a lot of profits without having any experience or knowledge of markets and trading. In reality though, copy trading is a difficult way to make consistent profits. Why? Because most so called “experts” are themselves losing money on trading, and therefore if you copy them you will replicate their failures for yourself. The key to copy trading is therefore finding only the very best copy trading services around. This requires a lot of research and testing, and many give up before they find a good quality platform or service.

At Trade Wise we aim to do most of the research and testing required to find good services. As we find low quality services we will share our personal experiences and hopefully help people avoid wasting money on services that aren’t profitable. As we find the one or two good quality services out there though, we will also share our experience of those and provide in-depth information on why we like them and how to get involved. Everything we express on the website and social media is purely an opinion and we are not financial advisers. Before making any investments you should always do your own research. 

Now that we know what copy trading is and how it works, let’s talk about the structure of copy trading. In most cases, there are 5 basic components that make the structure of copy trading. These are The Market, The Broker, The Trader, The Investor, and The Platform.

The Market, or The Financial Market, is essentially the base. This is where all of the trades are executed. These are done on exchanges and markets around the world, such as the New York Stock Exchange.

The Broker is an investors means of trading in the market, and is therefore essential in copy trading because without it, you basically can’t make any trades. You need a broker to get a trading account so that you can receive your copied trades from another trader. 

The Trader, also known as The Signal Provider, is the trader (or traders) you decide to copy. All of their actions and open trades are executed in your broker account, unless you’re using their own platform where profits are paid to you without the need for  broker account. Although in most cases you can just copy a trader straight away, you need to know the trader’s performance before you copy him. Some Platforms evaluate the strategy used before allowing it, while others just record their data the moment they joined. This all makes data that the user can use to determine whether this trader can make good profits or not.

The Investor is the person copying trades. This can be an individual or company depending on the nature of the platform and invested funds.

The Platform, or Copy Trading Platform, is a very important component in this structure because without it, it would be impossible to do any copy trading. The broker might be the bridge between a trading account and the trader, but the Platform is where everything takes place.