Mirror trading can be referred to as a strategy followed by investors to copy the forex trading pattern of experienced albeit successful investors (not restricted to any particular region). Here, the investor has the facility to study and investigate the different strategies applied by successful investors, thereby offering a platform to design a suitable strategy for their investment instrument.
This mechanism provides a flexible environment to the investor/trader, wherein the trader can choose between either opting for automatic mirroring of trading patterns from successful traders or just viewing and examining strategies followed by such investors.
The parameters taken into account while choosing the strategy and then applying it to start a successful investment venture, are
- The investment objectives of the trader,
- Danger tolerance,
- Funds selected for investment, &
- Foreign exchange selected for investment
The mirror-trading system operates 24/7 enabling the traders to design plans without much ado.
So how does the mirror-trading system works?
- It operates by virtue of two modes of functionality- semi-automated and automated rendering trading, respectively.
- Semi- automated rendering- This facility enables the traders to identify the signals and strategies they want to apply in their trading pattern, thereby offering the investors with the option to ‘mirror’ the deals. Post which the investor can opt to close the original position either manually of with the help of the software available.
- Automated rendering trading- In this process, the trader can determine the methods which strengthen the chances of their (individual) preferences along with their threat tolerances.
- Once the trader has settled on the technique, the strategy he has designed is taken care of automatically with the help of automated trading software.
- Mirror trading system offers an expansive platform to traders to buy and promote the trading instruments.
- The common tools used in this mechanism are reside indications, emotions (that is primarily associated with the original trader while choosing a plan), market collateral equity graphs, and oscillators chart studies.
- In order to move with the current trade, mirror trader gets the option to choose from the user-friendly trading system (exchanging encounter), i.e. with the help of IT.
- With the different exchange schemes available these days, mirror trading gives a robust system to the traders and using this system traders can purchase leads to compare various methods.