Trading in foreign exchange markets has become one of the hottest activities in the contemporary world. The foreign exchange market provides you with a lot of flexibility, like 24/7 trading. Foreign exchange markets also give you the ability to invest in your part-time. Hence, it is a good choice for people with a regular job. Moreover, the transaction cost in the forex markets is extremely low. The foreign exchange market is designated with the job of determining the rate of currency all around the world. It is also a global marketplace for purchasing and selling the currency.
Due to this, the Forex market gives you the facility to invest in almost every currency around the world. There are hundreds of currency pairs to trade in the foreign exchange market. Some of the most popular currency pairs in the foreign exchange market are US Dollars and Japanese Yen USD/JPY, Euro and US Dollars EUR/USD, and British pound and US Dollars GBP/USD. Some of the popularly traded currency pairs in the forex markets are also the ones with the highest liquidity and better predictability.
One must have a good knowledge of the foreign exchange market to trade in it. Market analysis is another important factor to keep in mind before investing in the foreign exchange market. It is essential to carry out fundamental and technical analysis before choosing a currency pair to trade. However, it could be a bit difficult for a new investor to understand every aspect of a foreign exchange market. Hence, the term copy trading emerged which allowed investors to take inspiration from experienced and expert investors before investing on their own.
What is Copy Trading
Copy trading is the process of automating your trading process by copying the trade practices of other investors. Copy trading is a highly useful method for a new investor who is yet to understand everything about the foreign exchange market. It helps a beginner to minimize losses and learn more about the forex market and trading while copying the trade from other experienced people. Even though the account of the trader is automated and connected with the account of copied trader, the copying trader still has the option to disconnect the account and manage them on their own.
They can also copy the important trading process like the stop-loss feature, taking profit orders, and opening a position. This has led to the emergence of a new type of investment portfolio, which is known as signal portfolios of people-based portfolios. Copy-trading became popular in 2005 as a method of experienced traders sharing the history of their portfolio that their friends and family members could follow. And it resulted in the inception of a copy trading platform as well.
According to a study in 2012 directed by Dr. Yaniv Altshuler, traders who had a signal or people-based portfolios did 6-12% better than other investors. Apart from that, there are many copy trading platforms to help newbie forex investors to copy a trade using historical trading data of other people. These trading data is shared by other experienced users on the same platforms that can be copied by other users on that platform.
Here are some of the top copy trading platforms available on the internet.
E-toro:
Headquartered in Israel, E-toro is one of the most popular copy trading platforms in the world. It is popular for its great interface and ease of use. E-toro is a great tool for non-experienced investors to copy the strategy of more experienced investors in the platform. Moreover, E-toro is regulated by many financial regulators to ensure that the platform is safe and follows best practices for copy trading. Apart from Forex copy trading, E-toro is a good platform for share trading, crypto trading, and indices trading as well.
AvaTrade:
AvaTrade is another impressive copy trading platform based in Ireland. AvaTrade is one of the most popular copy trading platforms and is regulated by the central bank of Ireland. Hence, this platform is a great choice because these regulations ensure that these platforms won’t scam you. In case if they do, it will result in the cancellation of their license in Europe. Additionally, this platform is easy to use and comes with loads of features for people who want to do copy-trading on this platform.
FBS:
FBS is one of the most popular copy trading platforms in the world. This platform is great for new investors due to its ease of use and lots of features for copy traders. Moreover, there are many types of accounts you can choose from. Additionally, a wide range of services is offered by FBS to its traders. You will also get an exceptional support service if you chose to copy trade from this platform. If you check the social media handle of FBS, you can find many great news and tips about investing. It is an excellent source of information for new investors and experienced ones alike.
HotForex:
Hotforex is a copy trading platform known for its best marketing practices and beginner-friendly interface. It was founded in 2010, and the copy trading platform boasts a wide range of services for copy traders. You can also develop your investing skills with the free education section provided by them. Many account types are offered by HotForex to copy investors. The pricing strategy of HotForex is competitive when compared to other similar platforms. Additionally, HotForex is also regulated by one tier 1 regulator, which makes it a great choice for people who prioritize safety over anything else.
Conclusion
Investing is the best way for us to stay ahead of inflation and meet our financial goals. It can also help you to save some money for retirement. However, it could be a bit difficult for a beginner investor to understand everything about investing. Copytrading is one of the great ways for the new investor to minimize the risk while learning how to invest in the forex market. There are many Copy trading platforms available in the world. It is important to choose a platform that is regulated by a tier 1 regulator to ensure safety while trading on these platforms.
