Could copy trading or mirror trading help you improve your trading results? Discover how social trading can help you get more from forex and online trading.
What is Mirror Trading, what is Copy Trading – and what’s the difference?
Did you ever wish that Forex or online trading could be simpler? If so, you’d probably be interested to learn more about mirror trading and copy trading. Mirror trading refers to a trading style where you automatically copy trades executed by a variety of auto-trading and signal services. Copy trading is similar to mirror trading and enables you to directly copy a trade or a trader you want to emulate.
Both mirror trading and copy trading are examples of social trading – where instead of directly trading the market you follow, interact with or mirror other financial traders. In many ways, in fact the two are pretty similar. So how are you supposed to figure out which is better suited to you?
Mirror trading is quite a sophisticated system that is great for investors seeking to invest large sums in following the very large volume of trades that auto-trading systems tend to open. If you’re doing this style of trading you’ll need a large capital base and you’ll need to be willing to see big money fluctuations in your account as a result. As a consequence,Mirror trading can feel intimidating for new and smaller volume traders. Mirror trading can also involve a very large amount of activity going on in your account so if you’re employing this strategy you’ll need to constantly keep an eye on your financial trading account in order to check that you have sufficient funds to meet all the trading activity and that nothing is going wrong.
Copy trading offers a simpler alternative to mirror trading which may be better suited to small scale or beginner traders.In copy trading you can select individual traders to copy, whether by copying their individual trades or by copying their entire investment strategy. As a result, you can assign a percentage of your account balance to following an individual trader, or to following several traders concurrently.For as long as you are copying a trader, every trade which they open will be mirrored by a copy trade in your account. In copy trading the total percentage of your account balance you can assign to copying one trader is restricted,this can spread the risk in your investment. In addition, the smaller number of traders you’ll be following means that you should always be able to stay ahead of the activity in your account, something which can be problematic in mirror trading.Another benefit of copy trading is that you can research the individual traders you are thinking of copying in-depth, by examining their portfolio, trading history and success rates.
Ultimately copy trading is a simpler and more flexible way to trade socially, offering investors more freedom to relax and enjoy their trading. If you are looking to discover more about copy trading, eToro’s investment network includes its unique CopyTrader feature, which takes social trading to a whole new level of ease and effectiveness.
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