Choosing forex copy trading network is not that dissimilar to choosing forex broker. Losses is the risk in every opportunity; that's why, be prudent and objective, put the clues we give you to practice, and try them out in demo if necessary.
Growing popularity of forex copy trading network has revolutionized how worldwide forex traders interact with each other. It also planted the seeds for dozens copy trading networks in which forex traders flock to seek their Muses. Consequently, a new trader will have the opportunity to choose the best among them, not only in the signal provider list given by a single copy trading network. Therein lies the question that often spoken by new traders: So, which copy trading should I choose?
That is, just like we always say, up to you. What suits others might not suit you, and what you want might not that interested for others. However, we could give you the resources to choose. So, here it is, a guide to choosing forex copy trading network. When you are looking for a forex copy trading network to join with, check on the following key points, and make sure that they are all above boards by trying out their demo account feature.
1. Forex Copy Trading Platform
Just like each forex broker may provide varying trading platform, each forex copy trading network may offer different platform for their members. There are forex brokers that prepared their own in-house copy trading service, such as Instaforex and Dukascopy, as well as social trading that grew to be brokers such as eToro and FxPro. But more often than not, brokers tag along with a well-known forex copy trading network to gain the advantage of a social trading without the complication of maintaining one. Zulutrade, for example, has became the go to for so many brokers (more than 40 at the last count) that it turned into a huge gathering of signal provider and subscriber.
So, which one to choose? in this case, remember one thing: Compatibility count. If you would like to have a highly accurate trades and smooth execution, then forex brokers that already provide their own copy trading service will be best. The scheme ensures both signal provider and you as a subscriber have similar trading conditions and housed under the same roof, and that makes for better compatibility in reaching target and avoiding losses. However, if you would like more choices, as in an endless source of signal provider, then ZuluTrade, Myfxbook, Tradency, SIRIX, and friends might be your best bet. It is also worth it to read online reviews on a specific forex copy trading service before committing to anything.
After choosing what kind of platform you wanted, then skim through its features; are you all right with their condition?
2. Forex Copy Trading Condition
The main thing to consider before committing yourself to an investment is ensuring that you have the fund needed to make it. Registration to join a social trading network, including copy trading, is usually free. The network usually do not take a management fee either. The bigger obstacle is minimum initial deposit. The figure could span from just a couple of bucks to thousands US Dollars. It could even be said that using copy trading service needs higher level of commitment compared to manual trading.
Beside of initial deposit, you should also consider:
Cost Per Trade
Yes, management fee might be free, but you should also know that signal provider will not give you profitable trades for nothing. In some services, the fee will be determined through an agreement between signal provider and their subscriber; commonly by dividing earned profit.
For other kind of forex copy trading networks though, things like spread and commission usually depend on the broker, because they just act as an Introducing Broker (IB) that already gain earnings from client acquisition. Therefore, some brokers that maintain connection with out-house network sometimes set different initial deposit, spread, and commission terms for clients who join copy trading services, either as signal provider or subscriber.
Internet Connection Requirement
There are those like ZuluTrade that does not need constantly running PC and internet connection for open and close trade to be automatically done in subscribers' accounts, but there are also those that need them. Remember that you will need a Forex VPS if the network will always need running PC.
Joining forex copy trading networks does not always mean that your account will always copy what your signal provider do. Some services allow trades to be terminated before reaching target, and some other do not. However, copy trading services usually allow subscriber to arrange their own money management, which means the amount of lot traded and levels of stop out might be different between signal provider and their follower.
Here is the thing: some copy trading services only give entry for traders on real account to be signal provider, but some others allow anyone, even those who trade using demo account only, to be one. Therefore, don't choose just any social trading network with many members in it, choose one who publish their members trading performances openly -the more complete it is, the better. Performances could be valued from trade history, applied strategy, how long he have been trading, number of followers, ect. It is also better for a management to provide a space where signal provider and subscriber could discuss things, either in a forum or a Q&A section.
Choosing forex copy trading network is not that dissimilar to choosing forex broker. Scam are rampant; and so in order to increase their competitiveness, even forex copy trading services have taken into registering their business to regulators. ZuluTrade is registered in US regulators, NFA and CFTC; also eToro is registered in Cyprus' CySEC, Dukascopy in Switzerland's FINMA, and so on. Still, it does not ensure that your investment will be 100% profit. Losses is the risk in every opportunity; that's why, be prudent and objective, put the clues we give you to practice, and try them out in demo if necessary.