Copy Trading Strategies of Successful Forex Traders – Legally

What is copy trading?

Copy trading is gaining popularity among forex traders, particularly among newbies. Nowadays, most of the Forex brokers and forex trading platforms have introduced the concept of social Forex trading where the top Forex traders share their trades with the community or followers. All you have to do is to copy their trading strategies. Its copy trading trend catching up among inexperienced Forex traders and it helps them to learn from Forex experts.
You to search for traders to copy based on profit percentage, risk profile, currency pairs and the number of followers. This makes it easy to find popular Forex traders to copy, but there are a few things you should take into account when copying a Forex trader.

Number of copy traders

You can see how many people are following a Forex trader. However, the number of copy traders alone doesn’t necessarily mean that he is a strong trader. Often, users will begin to follow a trader after he makes one trade with big profits, hoping to score again. A trader may have thousands of followers, but that doesn’t mean the followers are making any money. It’s always a good idea to watch the trader over a period before you start following him.

Forex Profits

Don’t copy a Forex trader just because of huge returns reported. You have to look deep into the number of trades and the amount of capital risked to earn these profits. Remember that you just don’t have the time start learning financials and putting effort into it. So you were copying a trader. That doesn’t keep you safe from risk. If you don’t have a large trading account, you may not be able to survive the drawdown incurred on the way to those large Forex profits.

Forex Trading Risks

Check the risk profile of your master trader. Most top social Forex platforms will offer some kind of measurement of a trader’s risk. Experienced traders are able to high risks and often manage to secure big profits. Their strategies may not work for all traders all the time. If you are new to Forex trading, you should only copy traders with lower risk levels so that a single trade doesn’t put your entire account at risk.

Copy a Single or Several Traders?

Copying only a single trader may risk your Forex trading account. Instead, watch a few traders over a period of time and choose a few different traders and divide your money among them. This will reduce your overall risk, since only a portion of your investment will be in jeopardy if a trader engages in a risky trade. There are chances that you might miss out on a few big trading opportunities now and then. Your primary goal is to get a stable and consistent income. All the while you are copying try to understand strategies used by the traders you are following.

If you remember the above factors, you’ll can start successfully copying other Forex traders. Social Forex trading programs are a great way to start trading Forex without much fear of rising your capital and you can learn the Forex market in the process. However, there is still risk involved and traders must be wise in their decisions when choosing other traders to copy.

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