Is copytrading a viable strategy for beginner traders?

Trading Systems Expert Advisors and Automated Trading
21

Is it wise to simply copy trades that have previously been successful for others? Are the returns guaranteed?

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22

Nothing is guaranteed in forex same goes for copy trading.
Copying trades is more simple as compared to placing trades manually. So, if you see a trader whose ROI fluctuates, you should be mindful of copying such trades. However, if the performance is consistent, it may be the most suitable option for good returns.

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23

Do update us whenever you decide to share your strategy for copying on Zulutrade as I am also using the platform as an investor.

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24

Yeah sure! Will definitely do that!

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25

It’s always a good idea to find a trader whose positions you agree with when copy trading. You should also pay close attention to your Stop/Loss and Profit margins. You’ll be fine if you don’t invest more than you can afford.

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26

The biggest thought that keeps me away from copy trading is past profit doesn’t promise future profits another important thing is you have no control risk. But it acts as an emotional barrier and takes less time to trade.

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27

Copy trading aims to make money off of other traders’ decisions. It is preferable to follow a reliable trader. So, I would suggest going for the top trader with a minimum of 2-3 years of track record.

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28

Yeah I agree, a long and successful track record suggests consistency in a highly volatile market. It is said that every three years, market volatility, trend, and cyclic change and if a trader can still earn a consistent profit, it is a wise decision to copy trades.

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29

New investors can greatly benefit from copying more experienced traders’ trades, especially if they’re completely new to the market. You can also split your funds among multiple top traders. For instance, you might decide to split your portfolio between a low-risk/high-reward trader and a high-risk/high-reward trader.

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30

After reading this thread, got some of my doubts cleared, I am planning to give copytrading a try. But I want to get clarity on a few more things before making the final decision:

  1. Do I need to pay anything to copy another traders? If yes, how much?
  2. Is it really worth it for beginners like me?
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31

I tried it in the past, but didn’t have much success… Maybe I followed the wrong dudes

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32

I used FXstat and Hotforex PAMM accounts, what I can say is that you still need to spend some time to assess performance, risk profile of a PAMM manager, get rough understanding what type strategy he uses, etc. in order to construct diversified portfolio of investments. However I prefer to trade myself because I feel long-term rewards from this approach are higher.

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33

Hmm, can be. Where did you start before? With Zulutrade I know they have a list sorted for top traders, even eToro I think.

Thinking of going in again?:grin:

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34

Different platforms have different requirements. On some platforms, you don’t have to pay anything to copy the trades, the trade will automatically be placed in your account once you follow a trader.
On the other hand, there are some, where you have to pay a fixed fee per trade.

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35

How can a beginner investor like me benefit from copy trading?

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36

@Tretrader_1 Basically if you don’t have the kind of knowledge that’s needed to make successful or profitable trades in the market, you still have higher odds of winning if you are replicating the trading action of any top trader compared to the beginner who is trying to do it on his own. These copy trading platforms like zulutrade, etoro, naga have some of the best traders with pretty good track records, so by copying their trades, you get an opportunity to use their trading skills to make profits for yourself.

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37

Copy Trading allows you to invest with limited market knowledge and experience. As a beginner, you can also start trading on a demo account and learn how copy trading works, without facing the risks associated with the real market.

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38

Yes exactly! And some platforms like Zulutrade and eToro even provide the option of interacting with each other.

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39

Is it true that traders with the highest ROI are the most profitable? Or are there any other options that should also be looked into?

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40

Imo, you should not only look for ROI but other aspects as well like:

  • maximum open trades, maximum drawdown and winning trades.
  • copy those traders who have at least 6 months of trading history on the platform because the older the trader’s account, the better.
  • risk level of a trader should resonate with your risk appetite so that you don’t lose more than you can afford in case of any unfavourable circumstance.
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