By Ezra Ivy
Have you always wanted to trade technology stocks such as Cloudflare Inc, HubSpot Inc., or Gartner Inc? Well, don’t let your lack of experience be the reason why you don’t. It doesn’t matter how much experience in forex trading you have. Through forex trading, you can trade across all markets, including indices, stocks, and commodity markets.
So, what is copy trading? It’s a trading strategy in which a less experienced trader copies the trading position of a professional trader to make profits. The inexperienced trader tracks the performance of the expert, analyses the position that he takes, and then decides whether or not to take the same position.
Methods of Copy Trading
A trader could also avoid the hustle of tracking his investment by choosing the automatic version of copy trading. This method automatically copies all trading positions taken. This method is limited because it denies the novice trader discretion to way out options and makes different trading positions.
If you are new to trading, it is prudent to practice trading manually before investing in a people-based portfolio. Practicing how to trade will reduce the chances of over-reliance on traders.
Is Copy Trading Reliable
There have been numerous studies attempting to measure the rate of copy trading success. Most studies have shown that, on average, only 10% of traders can carefully choose their traders based on their performance portfolio and their success rate.
Studies also show that most people who make huge profits through copy trading trade manually. However, there are a few traders who make huge profits through automatic copy trading. The difference between traders who make huge profits and those who make repeated losses is objectivity.
Traders who select their traders based on objective judgment avoid making mistakes by making good use of the available statistics.
Which Trading Strategy is More Profitable?
Copy Trading or Mirror Trading?
There is a difference between mirror trading and copy trading. Mirror trading is a strategy in which traders mirror the trading strategies of other traders. It’s more like automatic copy trading. This type of strategy does not allow the trader to analyze the expert’s trading position before making a move.
Mirror trading began with traders seeking permission to use algorithms with solid returns to make profits. Copy-trading then became a refined version of mirror trading. It does not automatically copy the strategy layout of the expert’s strategy. It allows the trader to assess the moves and analyze their chances of success before making a final decision.
Hence, copy trading is more profitable than mirror trading, which obliges traders to follow all their steps without their input. Moreover, unlike mirror trading, copy trading allows traders to choose a specific expert based on their success statistics. This ability increases their chances of success.
So How Can You Make Money with the Least Chances of Failure?
Instead of focusing on either mirror trading or copy trading, it is more profitable to employ a social trading strategy when trading forex. Social trading perfectly mixes copy trading and mirror trading as well as incorporates some aspects of independent trading.
Social trading allows you to join a community of traders instead of relying on automated plugins and signals. These communities give you a chance to interact and discuss market trends and updates in real-time before you decide on another trader’s trading position or strategy.
If you do not know much about forex trading, social trading could be a valuable platform for learning and becoming an expert. Interacting with a group of experienced traders with whom you discuss trading decisions and market entry and exit points make it easier for you to make profitable moves.
Moreover, this form of trading is relatively safer than both mirror and copy trading because you make decisions by yourself after the group discussions. The social trading discussions form the base for making individual analyses and evaluations, after which you make informed decisions. You will also master advanced trading skills much faster.
