Copy Trading with AvaTrade UK
Trading forex in UK can be a complex endeavour. To achieve success in this dynamic market, new UK traders require the appropriate education, skills, strategies and trading experience. Fortunately for such traders, the copy trading offered at AvaTrade UK has ensured that our traders can start trading the financial markets and gaining insight into effective trading strategies, while continuing their forex education. Copy trading is simply that: investors copying the trades of other, hopefully, successful traders on the platform, giving them first-class access to diversify their trading portfolios and to watch live trading in action.
With so many benefits to copy trading, it is important to understand that while you get to replicate top traders’ success, you also get to share in their losses. This is all part of online trading. Despite this, AvaTrade UK offers our clients access to successful traders on our intuitive platforms; so, come get in on the copy trading action.
How Copy Trading Works
Copy trading is a form of automated trading where trade positions are copied from one trading account to another. Copy trading is really straightforward for traders: you add your investment amount, select a trader to follow, and then the copy trading platform will replicate all the selected trader’s positions directly into your trading account. The world-class platforms at AvaTrade UK offer copy trading functionality – some are semi-automated, automated, or manual.
Automated Copy Trading
With automated copy trading, you select strategies (traders) that match your desired trading preferences and risk appetite. After that, all positions taken by the selected trader will be mirrored automatically in your trading account. No human intervention whatsoever is required when you are copying trades in this way.
Semi-automated Copy Trading
When copy trading in semi-automated mode, you will be able to view all the positions taken by the selected trader you wish to copy, in real-time. You then choose the positions you wish to replicate in your trading account. Once your desired trades have been copied, you can track them and then close them anytime you wish. You can however, also let them run so they can close automatically when your signal provider closes their trades.
Manual Copy Trading
This is a little more like normal trading except traders now have access to the extensive knowledge and strategies of experienced traders. You get to glean from their vast trading experience and to get some real insight as to which factors prompt them to enter or exit trades. You then ‘manually’ decide who to follow and which trades to copy as well as their strategies. In a sense, this is what is referred to as social trading.
How Did Copy Trading Become So Popular?
Copy trading has witnessed immense popularity in the UK as most traders view it as way of trading in the financial markets, while they still possess limited knowledge and experience in these markets. For new traders, copy trading has allowed them to take a slice of the $6 trillion a day currency trading market without committing the time resource needed to carve out a successful trading career.
Also, contrary to popular belief, copy trading is not just ideal for newbie traders. Even experienced traders copy other traders in order to enhance their profitability and to learn new trading strategies and techniques. No matter how good or experienced a trader you are, there will always be someone better, and always something more to learn. Here at the AvaTrade UK website, you can enjoy world-class signal providers that rank among the best in the industry.
Advantages of Copy Trading
Many traders nowadays attribute their success to copy trading techniques. The advantages of copy trading are as follows:
- The main advantage of copy trading is the opportunity to earn from the financial markets with limited knowledge. When new traders achieve profitability, they become more confident and are inspired to improve their trading knowledge further, since they understand that it is indeed possible to have a successful trading career.
- Copy trading frees up time for both new and experienced traders. Even investors with tight job schedules can earn in the markets without having to monitor their trading charts all day.
- Copy trading allows traders to choose the trading style that suits their risk tolerance and trading preferences.
- Copy trading allows for the diversification of risk. That is, you can trade manually by yourself, plus you can boost your market insight by integrating copy trading into your trading activities. Even while copy trading, you can select different signal providers in order to hedge trading risks in case different trading strategies become successful in different market conditions.
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The Risks of Copy Trading
While copy trading feels like a way to earn while riding on the experience of others, it carries some risks.
Here are the inherent risks associated with copy trading:
- There is risk of losing your capital. This seems natural as you are engaging in a high risk, high reward endeavour. Despite some successful profitable trades, the signal provider may make a mistake, or the market might turn, and this can be disastrous for your trading capital.
- Choosing a reliable trader to copy is not an easy task. A trader topping the leaderboards today may not have been there a few weeks back. He may just be undergoing a good streak, and an inevitable drawdown may catch you off guard and result in big losses.
- Copy trading does not consider your personal investment goals or financial circumstances. You are still relying on a third party for trading decisions but absorbing full liability in case anything goes wrong.
- There are also signal provider risks. The signal provider may discontinue their service without notice, or get margin called by their broker, and this could inconvenience you if you have no plan B. The trader you have chosen to copy may also change their strategies to become more aggressive, and this could mean riskier trades.
Tips and Tricks for Successful Copy Trading
Even with the natural risks associated with online trading as well as copy trading, the process can be conducted more effectively. Here are some tips and tricks when copy trading:
- Pick the Perfect Broker –
This is where AvaTrade UK takes centre stage. While it is third party software that powers and enables copy trading, the process is still done through a brokerage’s platform. Picking a reliable and regulated British broker, such as AvaTrade, is the first step to achieving successful copy trading. Copy trading is always performed in real-time, and it is important that your broker’s copy trading platform conforms to the latest financial, technological advancements in order to achieve seamless trading. Here at the AvaTrade UK website, you’re in safe hands. In addition to being 100% safe, secure, and regulated, AvaTrade ensures that the integrity of client accounts is protected at all times. AvaTrade UK also allows copy trading across all its platforms, seamlessly.
- Find the Right Account –
AvaTrade UK offers multiple copy trading options for its traders, such as Mirror Trader and ZuluTrade. These are the leaders in the automated strategy field, and their platforms are incredibly user-friendly and guaranteed to meet your needs. Having multiple accounts also widens the pool of signal providers you have to choose from.
- Choose the Ideal Signal Provider –If you take the time to identify good traders to copy, you aren’t taking any more risk than when trading your own account. That is to say, trading is inherently risky, and there is always the possibility that you will lose money. Also, note that the past performance of a trader is no guarantee of their future success, so even if they’ve been profitable for three years running, they could have their first losing week right after you decide to follow them. As always, never invest more than you can afford to lose.
This is the most challenging part of copy trading. Once you activate your account on the AvaTrade UK website, our platforms will generate a list of numerous signal providers, and you can choose one that suits your desired trading style and preferences. When choosing a signal provider, you should not just simply pick the one topping the charts. Instead, it is important to review the history of the trader’s trading activities. The trader should have a trading history of no less than 60 days. A trader with a lot of subscribers is also desirable, as this might be the first sign of reliability. A consistent signal provider is also better than a one-time big hitter. Furthermore, the signal provider should also not have a drawdown exceeding 25% in any given month in their history.
- Choose a Signal Provider with a Trading Account Similar to Your Capital –
This is very important as it will give you a proper idea of the risks and returns you are exposed to. If you intend to trade with $5,000, it might be a bad idea following a trader with a $1,000,000 account.
- Proper Settings –
Copy trading replicates the positions of your signal provider in your trading account, so you should ensure you have set the right parameters for all types of trades that will be copied into your account. If you are following a scalper, for instance, it would be wise to replicate trades in smaller lot sizes because of the volume of trades such a trader may execute in any trading session.
Copy Trade with AvaTrade UK
Our AvaTrade UK trading platform offers you multiple direct and indirect copy trading options. AvaTrade has also partnered with the world’s finest signal providers to ensure that you can follow the best copy traders – wherever they may be.
Our leading copy trading platforms include the following:
- AvaSocial – The AvaTrade mobile app that allows you to follow and copy the trades of a wide selection of traders. You can create groups to share ideas with other like-minded traders or message your mentor or peers directly.
- DupliTrade – This is compatible with MT4, and allows you to automate your trades as per the activity of experienced traders. DupliTrade has one key advantage over its competition and that is that it audits and monitors all traders on its platform to maintain a quality offering. They accept only the best strategy providers, with years of market experience, and a proven record of making successful trades with real money. It is a simple platform to use and so, suitable for beginners.
- Mirror Trader – Enjoy manual trading, semi-automatic trading, or automatic trading when following your preferred signal providers. You also get to copy the algorithmic trading strategies developed by experienced UK traders in conjunction with top developers.
- ZuluTrade – Select from a large number of signal providers, who have been ranked using various practical parameters, including maximum drawdown and average profitability.
Our sterling reputation, in tandem with the world’s finest signal providers, ensures that you can make safe and secure trades within our all-inclusive trading environment.
Follow the best performing british traders on our automated CFD trading platforms as well as from the pool of our copy trading partners and mirror their skills and strategies in your trading account. Additionally, please feel free to contact our support team should you require any information or assistance with copy trading.
Copy Trading main FAQs
Do I need prior trading experience to engage in copy trading?
If your plan is only to follow and copy other traders, there is no experience required, although it can be helpful in analysing and selecting a good trader to copy. In reality, it is often the traders with no experience who like to use copy trading. It can be a good way to begin growing an account, and if you take the time to analyse the trades being made by those you follow, it can also be a very good way to learn about trading too. If you’re a new trader and are worried about losing money with copy trading, you could always try it with a demo account first before funding your account.
Is copy trading too risky?
If you take the time to identify good traders to copy, you aren’t taking any more risk than when trading your own account. That is to say, trading is inherently risky, and there is always the possibility that you will lose money. Also, note that the past performance of a trader is no guarantee of their future success, so even if they’ve been profitable for three years running, they could have their first losing week right after you decide to follow them. As always, never invest more than you can afford to lose.
How can I find good traders to copy?
While it might seem tempting to copy the trader with a 300% annual return, in general these traders are taking on far too much risk and eventually will blow up. Instead, look for traders who have at least 1-year’s trading history and a return of somewhere between 10% and 30%. The trader should also be active enough that they are placing a minimum of one trade per week. This ensures that they are trying to grow their trading base rather than just locking your money in a single trade. If you want to spread out your risk, you can spread out your copy trading between 2-4 different traders.