Choosing the best trader to copy is one of the biggest challenges in copy trading. This guide will help you sort this issue out in no time.

Accessing the forex market is now easier than ever, but making profits is a completely different matter. Many forex traders end up losing their money, particularly those who have little knowledge about trading. The good news is that there's a popular method called copy trading that allows even complete beginners to take advantage of the forex market, by simply investing your funds in a skilled trader and copying their strategy. OctaFX is a broker that comes with feature.

OctaFX copy trading

The idea is to copy trades that a certain trader executes so that their win becomes your win too and their loss becomes your loss. The trades themselves are executed in a percentage-based manner because you only connect a part of your portfolio to a single trader. This allows you to diversify your portfolio and minimize your trading risk. Such a strategy is often known as people-based portfolio, which refers to traders who invest in other traders rather than perform the trades themselves.

While you don't necessarily have to master the knowledge of making profits from copy trading, it does require some basic understanding of what to look out for. Some of the most important things to be considered are the copy trading platform and the trader to copy.

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OctaFX Copy Trading Platform

OctaFX is a reputable forex broker that was founded in 2011. Today, the broker has served over 10 million trading accounts from clients in more than 150 countries worldwide. The best thing about this broker is its incredible support for clients. OctaFX offers one of the tightest spreads in the industry, a favorable loyalty program, and plenty of educational materials.

OctaFX also has a copy trading platform that's available on Google Play Store. The platform allows traders to copy an unlimited number of strategies at the same time with no additional commission fee for the broker. Copiers are free to choose the Master Trader that they want to copy and earn passive income from the profitable trades. Even so, Copiers still have full control over their funds and they can stop the subscription whenever they like.

 

Choosing the Best Master Trader

One of the biggest challenges in copy trading is choosing who to copy. It is important to understand that Master Traders can make both profitable and losing trades. So, if you choose an unprofitable trader, you will also lose your money depending on the proportion that you've invested.

Choosing a good strategy provider to copy can be difficult because there are so many of them on one platform. In this case, the first thing that you need to do is to visit the trader's profile description. This is where you'll find all the data you need to identify your next future Master Trader.

Here are some of the stats that you need to consider before choosing a Master Trader:

 

Risk Level

Every strategy provider has a different risk level. If you're new, it's not recommended to copy someone with a high level of risk as you might lose money quickly. Instead, choose someone with a risk level that you can afford. Also, check if the trader uses stop losses on their trades and at which distance. Do not copy someone with no stops because that increases the risk of your investment.

 

Returns

You'd want to choose someone that shows consistent rather than sporadic results. In most brokers including OctaFX, he easiest way to tell is by looking at the historical performance graph. If it's gradually increasing, then it's a good sign. If you find some irregular spikes, then you might want to consider someone else. Remember it's better to copy someone that gets small gains each month for an entire year rather than someone who wins spectacularly for the first six months only to lose drastically in the next six.

 

Trading Performance

Check the trader's performance over the last 12 months and consider the profit and loss. It's even better if they've been trading longer, so you can examine their performance during different market conditions.

 

Number of Copiers

Just like social media, traders with a good amount of followers could indicate that they're good at what they're doing. After all, people wouldn't want to follow them if they don't show satisfying results. This actually doesn't necessarily reflect the trader's quality, but it can be a helpful factor to consider. Aside from that, you can also use the opportunity to connect with other traders. Ask them about their experience with the Master Trader and perhaps exchange thoughts to improve each other's portfolios.

 

Order History

Apart from the number of followers, it's also important to check the trader's order history. The more trades have been copied, the better.

 

Reliability and Confidence

Lastly, you need to make sure that the trader's reliable. Choose someone who trades with a real trading account and risks their own money. These traders are usually less reckless with their trades compared to others. This also shows that they are confident enough to take the risks for themselves.

 

How to Copy Trade at OctaFX

There are several steps that you need to follow in order to start copy trading at OctaFX, namely:

  1. Create an account and make your first deposit. Simply click "Sign Up" and follow the given instructions to create a copy trading account.
  2. Make a deposit using any payment method you like. If you already have funds in your OctaFX trading account, you can transfer them via the broker's internal transfer service.
  3. Choose a trader to copy. Browse through the platform and a Master Trader that you want to copy, then click "Copy". The funds will be subtracted from your wallet and you will immediately copy their positions depending on the deposit percentage that you choose.
  4. Monitor your trades. You can view your detailed trading statistics and your trades in the Copier Area. You can also stop copying at any given time, but make sure that all open positions are closed.
  5. You can withdraw your profit straight from your wallet. Ending your subscription will transfer your investment funds back to your account. However, you won't receive your initial funds back if you end the subscription with a loss.

 

How to Minimize Risk in Copy Trading

As mentioned before, copy trading is not free of risks. You still need good risk management to ensure that you make passive income instead of consistently losing. Here are some tips to get you started:

  • Copy more than one trader to spread the risk and choose traders with different trading strategies in order to see which of them works best for your portfolio.
  • Choose day traders if you prefer to close your trades before the day ends.
  • Observe how traders behave during unfavorable market conditions. If they stick to their tested strategy, then you can stay on.

Choosing the right traders to copy is the key to successful copy trading. When a trader suddenly changes behavior and underperforms, you know that it's time to cut your losses and move on. Don't invest your money in unprofitable trades. This is why it's highly crucial to monitor your trades regularly. Make sure that your portfolio is balanced and able to give you consistent passive income.

In the meantime, use your spare time to enrich yourself with trading knowledge. You can read trading articles, watch educational videos, or even apply to a training academy. Keep in mind that improving your trading skill is never a waste, even as a copy trader. At OctaFX, you can practice your trading skills by using the demo account. It is completely free and it gives you access to the trading platform. You can even try OctaFX's different account types with the demo account.

 

OctaFX is an international Forex broker that operates worldwide. The domain belongs to a group of companies called Octa Markets Incorporated which is registered with St. Vincent and Grenadines FSA. Currently, the company focuses on Asian, South African, and Australian markets. OctaFX.com does not accept European clients as this market is specifically appointed to OctaFX.eu (regulated by CySEC).