Copy Trading - A New Trend For Novice Forex Traders

April 4, 2024
4 min read

The Forex trade market is one of the most long-lived forms of financial investments. Nowadays, due to the heavily destabilized economic situation, the number of people wanting to join it keeps growing. Forex trade is easily accessible, yet, rather complicated for beginners, as success depends on the skillfulness and knowledgeability of the traders, which requires full dedication and time. As more new traders were willing to start earning money without spending time on learning the basics, it led to the creation of a relatively new form of Forex trade – copy trading. Let’s learn how it can benefit novice traders, and how one can actually start such a trade.

What is copy trading?

Copy trading, as the name suggests, is copying the transactions performed by other traders, usually professionals.

Copy trading is a recent trend, increasing its presence in the trading world. It has developed from a so-called ‘social trading’, where people would study the forums and discussions, trying to elaborate on their trading strategy. However, it has reached a more advanced and automatic form now, like the Justmarkets copy trading platform, which brings together novices and seasoned players benefiting both.

Copytrade is like a shortcut to Forex trade – as a rule, the initial trading period is dedicated to learning all the ins and outs of the trade; now, new traders simply create an account and execute the same trades as professionals. Time is saved, money – earned.

  Copy trading methods

  1.   Automated trade

Automated copy trading is a trouble-free form of trading. A trader creates an account, allocates money, chooses the trader to follow, and gets the profit after the transactions.

It is the fastest way to enter the trade for new traders, as it is only about the choice of a trader to follow and paying a flat fee for ‘help’.

  1.   Manual trade

Manual trade requires more dedication and knowledge. The traders-followers decide themselves if they are willing to perform the transactions offered by followed traders. Moreover, all the transactions are executed as if it were a regular individual trade.

Manual trade gives more freedom, as it allows to follow numerous traders, yet, copy just those whose transactions seem to be more credible. However, it requires more knowledge for analyzing the positions, and time, which can be critical in the currency market.

  1.   Coaching

Coaching is a brilliant solution for those who intend to start an independent trading in the future. Copy trading, in this case, turns into guided assistance, with all the explanations of the moves and transactions.

This approach is both financially and knowledge-wise beneficial. A significant downside can be pricing, as such guidance requires additional payment; besides, finding a person with good explanatory skills may take time.

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  Advantages of copy trade

Copy trade is a ‘helping hand’ for inexperienced traders, as they can ‘play big right from the start.

  1. Accessibility – copy trading is at the tips of the fingers. The only thing required for joining it is the application.
  2. Time efficiency – Forex trade requires devotion to a trading environment with its rules and regulations. Copy trading, instead, is a time-saving approach, allowing Forex rookies to follow masterful transactions and get their passive profit almost instantly (compared to the traditional approach).
  3. Learning opportunity – copy trade allows novices to learn from professionals, and expand their knowledge.
  4. ‘Peer-trading’ – professional traders can benefit from copy trading by learning from each other. They can analyze other trading styles and implement them to life.
  5. Emotion-proof approach – one of the major problems for trade-starters is emotional instability, while vacillating back and forth between the options, they can lose time and thus, money. With copy trading, there is no such issue, as skillful traders perform all the transactions.

  Disadvantages of copy trade

  1. Cost – copy trading requires more fees. It can be an upfront payment, or a commission for every transaction, which can result in a lower profit.
  2. Lack of control – copy trading is almost non-controllable, especially when automated.
  3. No learning potential – while copy trading can be a good way of making money without active involvement, it brings no knowledge value, and thus, a chance for development in Forex trade.
  4. Market fluctuation – the Forex market is tricky, and even the best traders can make the wrong moves.

  The final thoughts

Copy trading is a relatively new form of Forex trade, which allows less experienced traders to follow the steps of trade masters. Depending on the level of skillfulness and further expectations the traders can opt for different forms of copy trading – automated, manual, or coaching.

Considering the risks of copy trade, starting with reliable copy trading platforms, like Just Markets, is important as it will ensure the safety of your funds and help you make a profit.

If you want to start Forex trade, yet have doubts about it, copy trading will be the best choice, as it will uncover the world of safe and guided trade.

This article is a Brand Press post. Brand Press is a paid service for brands that want to reach Techpoint Africa’s audience directly. Techpoint Africa’s editorial team doesn’t write Brand Press content. To promote your brand via Brand Press, please email business@techpoint.africa

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