HFM information and reviews
Octa information and reviews
FXCC information and reviews
FxPro information and reviews
FBS information and reviews
Vantage information and reviews

Five Reasons for Copy Trading: Unlocking Your Financial Potential

29 May 2023

With the social trading sector expected to grow and reach a market size of $3.77 billion by 2028, copy trading, a form of social trading, is fast becoming a popular way for traders to achieve their financial and trading goals. Copy trading allows traders to mirror or replicate the trading positions of another selected trader on the platform. As a copier, the amount of time needed to research and analyse the market is significantly reduced as your positions are automatically mirrored to the trader of your choice.  

Essentially, copy trading works by selecting another trader whose trades you wish to follow on the platform. After selecting the trader, the positions opened or closed by the trader will subsequently be replicated in the copier’s account. As a result, you will also reproduce similar trading returns as your chosen trader.  

The practice of copy trading is popular for many reasons. Continue reading to learn more about the benefits of copy trading! 

Reason to use Copy Trading 

Reason 1: Better Risk Management 

As with all forms of trading, copy trading also comes with risks. However, copy trading can help with managing risk more effectively. By following traders who have a history of managing risks well, you can benefit from their expertise and potentially minimise losses.  For example, in the Vantage app, you can choose traders to copy based on their risk band. The higher the risk band, the more volatile the trader tends to be.  

As a beginner looking to copy a trader with good risk management, you can choose to filter for traders based on the popular filter combinations on the app such as “Low Risk and Stable Return”.  

You can also choose traders with lower daily maximum drawdowns. A low daily maximum drawdown indicates that a trader is able to limit their losses on any given trading day. 

Reason 2: Diversification of Portfolio 

Diversification of your portfolio is important as it may help to reduce the impact of market fluctuations on your portfolio. However, diversifying your portfolio can take time, especially if you lack market knowledge and expertise. Through copy trading, you can follow multiple traders and their respective strategies. This can reduce the impact of market fluctuations on your portfolio, as well as help you to mitigate risks. Just think of the saying, don’t put all your eggs in one basket!  

Reason 3: Saves Time 

As copy trading fully automates your trading decisions, you can follow the trades of traders with proven track records and let them do the work for you instead of spending hours analyzing the market and keeping up with the latest market news.  

Reason 4: Learn from the Best 

Every trader has different approaches when it comes to trading and analysing the market. Through copy trading, there is the potential for learning about trading and understanding the market through real-life case studies of the traders you follow. When following experienced traders with proven track records, you can pick up on their strategies and methods of trading. The same goes for traders with significant losses. It is equally important to know why some trades do not bring expected returns and why some trades do.  

If you are a beginner trader, you can gain valuable insights into how the market works, and what works best in different market conditions. Through copy trading, you can earn and learn as you go along. 

Reason 5: May Assist Both Beginners and Experts 

Copy trading isn’t just for beginners, it can be use by both beginners and experienced traders alike.  Through copy trading, beginner traders can not only gain confidence but also have the opportunity to learn from successful traders with years of expertise and knowledge. For experienced traders, it provides them opportunities to gain insights from other traders with different trading approaches which they might have missed out on – opening the doors to alternative trading opportunities.  

Downsides of Copy Trading 

While there are many advantages to copy trading, it is also important to note the risks associated with it. 

It is important for you to strike a balance between relying on copy trading and also conducting your own research and market analysis to strengthen your expertise and develop your own trading skills and strategies. 

Tips for Maximizing the Opportunities of Copy Trading 

As mentioned above, there are unavoidable risks that come with copy trading. But fret not, here are some tips for you to maximize the benefits of copy trading. 

Tip #1 Check All metrics Before Choosing a Trader to Copy 

Don’t simply look at one success metric. There are multiple factors for you to filter for when selecting a trader to copy.  

Do pay attention to metrics such as: 

Other factors to take note of, even if they don’t directly indicate the expertise of the trader, include:  

While it is possible to follow the crowd and follow a trader who has more copiers, it is important for you to do your due diligence and conduct sufficient research on traders before choosing a trader to copy.  

Tip #2 Consider Choosing Multiple Traders to Copy 

While it may be tempting to choose one trader with high returns to copy, investing in multiple traders can help to diversify your portfolio further and spread risk.  The markets can be very volatile where even the most experienced traders could fall victim to unexpected market movements. Choosing multiple traders can ensure that your investments are put into different asset classes with varying degrees of risk. Remember: do not put all your eggs in one basket! 

Tip #3 Put Stop Losses in Place 

Consider assigning stop losses to your trades as this will help you close out a trade when it reaches a certain price level, limiting your potential losses during unfavourable market conditions.  Stop losses will also offer you peace of mind as you can focus on other aspects of your life knowing that your investments will not fall below the price point you are comfortable with. This protects your trades from market volatility and incurring losses that you are unable to stomach.  

Start Copy Trading with Vantage 

Whether you are a trader who is just starting out or a seasoned trader looking to potentially increase your returns, copy trading is a great way for you to achieve your financial goals. Download the Vantage Trading app here and begin your copy trading journey with a user-friendly experience and an easy-to-use system. 


Share: Tweet this or Share on Facebook


FP Markets Named Best In Class for Commissions & Fees, Algo Trading and MetaTrader
FP Markets Named Best In Class for Commissions & Fees, Algo Trading and MetaTrader

Celebrating nearly two decades in the Forex and CFDs industry, FP Markets continues to excel in meeting the needs of traders and investors, earning it repeated industry acknowledgement in numerous key areas.

27 Mar 2024

RoboForex revolutionises financial trading with its Infinity partner program
RoboForex revolutionises financial trading with its Infinity partner program

In an increasingly competitive financial market, innovation becomes the engine of success. Recognising this need, RoboForex takes a bold step into the future with the launch of its Infinity Program.

6 Mar 2024

FP Markets Partners with Industry-Leading Platform Provider TradingView
FP Markets Partners with Industry-Leading Platform Provider TradingView

FP Markets’ customers around the world can now gain access to TradingView's advanced charts and analysis, powerful trading tools and interact with the world's largest social network of traders...

22 Jan 2024

FxPro Unveils a Lucrative Global Affiliate Program
FxPro Unveils a Lucrative Global Affiliate Program

FxPro, a leading online broker, is thrilled to introduce its new and highly anticipated global Affiliate Program, promising partners an enticing opportunity to earn substantial commissions...

22 Jan 2024

Introducing the ModMount VIP Account: Elevate Your Trading Game
Introducing the ModMount VIP Account: Elevate Your Trading Game

In the world of trading, success often depends on having the right tools and conditions to navigate the markets effectively. With the ModMount VIP Account, traders...

19 Jan 2024

Unlock the World of Copy Trading with BlackBull CopyTrader
Unlock the World of Copy Trading with BlackBull CopyTrader

Copy trading, a revolutionary way to engage in the financial markets, has reached new heights with BlackBull CopyTrader, an award-winning platform designed to seamlessly...

19 Jan 2024

Editors' Picks

The Top Forex Expert Advisors 2024: Performance, Strategy, and Reliability Review

An annual roundup reviewing the most successful Forex Expert Advisors (EAs) based on their performance, strategies employed, reliability, and user feedback. This piece would provide insights into which EAs have been market leaders and why.

The Evolution of Forex Expert Advisors: Navigating the Path of Technological Revolution

The concept of automated trading has been around for decades, but the accessibility and sophistication of Forex EAs have seen significant advancements in the past few years. Initially, automated trading systems were rudimentary, focusing on simple indicators like moving averages.

The Impact of EAs on Forex Trading: A Double-Edged Sword

By enabling continuous, algorithm-based trading, EAs contribute to the efficiency of the Forex market. They can instantly react to market movements and news events, providing liquidity and stabilizing currency prices through their high-volume trading activities.

MultiBank Group information and reviews
MultiBank Group
XM information and reviews
FP Markets information and reviews
FP Markets
FXTM information and reviews
AMarkets information and reviews
BlackBull information and reviews

© 2006-2024 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.