Copy trading allows new traders to copy trades executed by professional traders in the financial markets.
The goal of copy trading is for the new trader to have the same positions as the professional they are copying.
When copying another trader, one doesn’t receive the background of the traders strategy or actual set up, but simply follows their trades.
This form of trading is also commonly known as mirror trading, which allows one trader to copy another traders actual live to market trades.
Copy trading is a form of portfolio management. The goal is to find other investors that have a track record you would like to emulate. The process of copy trading allows traders to monitor strategies of other successful traders. Like any trading system a trader decides to employ, traders are best served by following the investor before they decide to risk real capital.
Copy trading can be useful for traders who do not have the time to follow the markets themselves. Generally, copy trading is focused on short-term trading, in particular day trading and swing trading strategies, but there are several different strategies that are used to generate revenue.
Copy trading tends to focus on assets within the forex market, as well as other complex or volatile markets. While copy trading can be lucrative, there are also risks involved, and traders should remember that past results are not a guarantee of future returns.