Finding the right trader to copy is essential if you want to have good results in copy trading. Most trading platforms provide information like trading statistics and trading history which is helpful in giving insights to investors about which trader they should choose. Some copy trading platforms also rank traders on the basis of their performance so investors can easily pick a top performing trader and follow them. However, the ranking parameters may vary from one platform to another and it is extremely important to know those parameters in order to make the right choice. Therefore, I have mentioned below the ranking criteria of top three copy trading platforms:
Instead of ranking traders on the basis of higher profits, Zulutrade filters out strategies that show consistent and stable results over time; the idea is to protect investor’s capital from over-exposing. Below are the ranking parameters for traders on Zulutrade
Number of open positions at a given time
Maximum drawdown
Duration for which the strategy is running consistently
The ranking on eToro is based on the winning ratio primarily but this is not the only factor that’s taken into consideration while ranking traders. There are some other parameters too, such as:
Okay, but does it really work? If yes, then why isn’t everyone copying from a trader with a high success rate and making money. Honestly, I just feel that it’s one of many things that’s done to attract new traders. I just don’t get it how people trust others with their money they know absolutely nothing about.
I think the reason why not everyone is doing it is, because like everything else copy trading too has its pros and cons. Those who are not doing it might not be doing it because
They won’t learn any real skills
Some of them might not be confident enough in following someone else’s trades
Similarly, there are people around who
may not want to learn trading or create a strategy on their own
don’t have time but still want to make some side income
find it fascinating to be able to copy multiple strategies at the same time instead of spending months building one
And for such people, copy trading is a great concept.
Personally, I see copy trading as one of the several automated trading strategies. I too have tried it and it has worked well for me. Not that I have earned millions or got rich overnight or something but I made some decent dollars.
The thing is, which trader do you want to follow, how much do you want to invest, when do you want to take out your money or stop- it’s all up to you. If you want to see if there’s any slippage/delay while copying trades, you can always start with a small amount or try it on a demo.
Copy trading is not a set and forget strategy. You need to put effort. You gotta understand how your money is working and what risk you are taking. You need to evaluate several things to make it work and not everyone is interested in doing that.
There’s an old saying- He who plays the piper calls the tune. At the end of the day, if the money is yours, you’ll decide where to put it.
That’s actually an interesting question! You see,copy trading is not a sure win strategy and there can be many reasons why you don’t have the same results as an experienced trader.
When you copy a trader, you replicate their trading positions automatically, as in, you’ll enter the trades, when they are entering but there are few things that are still in your hands like deciding your position size, setting the stop-loss, target profit, deciding if you want to exit the trade manually or not. Now, if you haven’t invested enough amount or if you don’t know how to manage your risk or if you enter a trade with a very small profit target that can’t even make up for the trading costs, you are not gonna make any profit.
On point! Copy trading is not as simple as it sounds but it’s great to hear that you have a positive experience with it. Would be great if you could share some tips and tricks.
To be honest, copying trades doesn’t seem like a very good option to me. I prefer learning to work on my own. It is for this reason that I use the demo account of the Amarkets broker, and for me it is quite profitable.
You have made a valid point here. The good thing with copy trading is that it requires way less effort to make profits from it. But still, some minimal effort on our part is also essential. Here this minimal effort can be attributed to managing the risk and monitoring the trades.
@Viceroy Copy trading can be profitable, but you should play your cards safe. All traders have bad days, even those who you copy. So, if you decide to copy trade, do it with proper research.
Been copy trading with aaafx using their zulu account. Finding the right trader is pretty easy and the fee structure is also reasonable. Good experience overall.
@slunpiece The data about trader’s performance can’t be manipulated on any of these platforms. All of them are regulated, trustworthy and extremely transparent when it comes to showing the statistics of traders.
But you should note that there is a slight difference in the ranking system on these platforms.
On zulutrade, traders are ranked by their automatic ranking feature, zulurank. The results are computer-generated which can’t be tempered or changed.
On eToro and Naga you can sort top traders on the basis of parameters that OP has mentioned. You can check who are the top traders based on max profits or min drawdown or any other parameter.
Copy trading is like any other portfolio, if you diversify and don’t put all of your eggs in one basket, you stand a much higher chance of success. Could a trader blow your account? Absolutely but if you are copying several traders and allocating funds based on how aggressive and risky they trade, then it would not destroy your funds. You would certainly take a hit but it is recoverable in a short time if done right.
It takes hours of research and planning to be truly successful with copy trading. You do need market knowledge, a truly new trader with no experience will fail in copy trading just as they would by jumping right in and trading manually. If you do your due diligence and diversify among several traders, it can be very profitable. It also requires monitoring and maintenance, moving funds around or adding and removing traders as you continue your research.
I have a good balance between aggressive and conservative traders and it has been working out very well.
Traders on copy trading platforms are typically ranked based on various performance metrics, such as their return on investment (ROI), the risk associated with their trading strategy, and the number of followers they have. This will help them to make clearer pictures on which one to opt for. Some platforms like zulutrade also take into account factors such as drawdown, exposure, etc.