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| Copy trading allows you to automatically replicate the trading activity of a selected trader, signal provider, or strategy in your own account. The size and execution of copied trades depend on the platform’s settings, allocation method, and market conditions. Copy trading does not remove the need to understand the risks involved. |
If you’re new to trading, copy trading can provide an alternative to placing and managing every trade yourself. However, it does not guarantee profits, and losses can occur.
Copy trading, in plain terms
Copy trading links your account to a trader, signal provider, or automated strategy, allowing eligible trading activity to be replicated in your account. The size and execution of copied trades depend on the platform’s allocation settings and market conditions, so results may differ from the original trades.
Your funds remain in your own trading account. You are not transferring them to the trader or strategy provider. Depending on the service, you may be able to adjust your allocation or stop copying, subject to the applicable terms and procedures.
How does copy trading work?
- Choose who or what to copy: Select a trader, signal provider, or strategy based on factors such as its approach, historical performance, and risk profile.
- Choose how much to allocate: Decide how much of your funds to allocate, subject to the platform’s available settings.
- Trades are copied automatically: Eligible positions may be replicated in your account, subject to market conditions, execution, and platform settings.
- Monitor your account: Review the copied activity and, where available, adjust your allocation or disable the service in accordance with the applicable terms.
A simple example
Suppose you allocate $1,000 to a copy-trading strategy. If the platform’s allocation settings result in 2% of your allocation being used for a copied trade, approximately $20 would be allocated to that trade, before considering leverage and other applicable factors.
If the copied position moves in your favour, your account may benefit from the corresponding market movement. However, your result may differ from the original trade due to allocation, execution prices, timing, spreads, leverage, and other costs.
Who is copy trading for?
Copy trading may be suitable for:
- Beginners who want to explore automated trading while continuing to learn about the markets.
- Time-constrained traders who may not be able to monitor markets continuously.
- Traders seeking an automated approach while keeping their funds in their own trading account.
It may be less suitable for traders who want to make every trading decision themselves or who are not comfortable with the risks involved.
What to watch out for
Copy trading can make trading more accessible, but it does not remove the risks. Before you start, consider the following:
- Market risk: Copied trades can result in losses, and your results may differ from the original trades.
- Past performance: Historical results do not guarantee future performance.
- Leverage: Where leveraged CFDs are used, leverage can magnify both potential gains and losses.
- Fees and costs: Applicable fees, spreads, commissions, or other costs can affect your overall trading results.
Frequently asked questions
What does copy trading mean?
Copy trading means automatically replicating eligible trading activity from a selected trader or strategy in your own account, subject to the platform’s settings and market conditions.
Is copy trading good for beginners?
Copy trading may be accessible to beginners, but it still involves trading risk. New traders should understand how the service works and only use funds they can afford to lose.
What’s the difference between copy trading and mirror trading?
The terms are often used similarly. Depending on the platform, copy trading may refer to replicating a trader’s activity, while mirror trading can refer to replicating a predefined strategy.
Do I keep control of my money in copy trading?
Your funds remain in your own trading account. Depending on the service, you may be able to adjust your allocation or pause or disable copying, subject to the applicable terms and procedures.
Can you lose money copy trading?
Yes. Copy trading involves market risk and losses can occur. Where leveraged CFDs are used, leverage can magnify both potential gains and losses. There are no guaranteed returns.
| Ready to explore copy trading? Learn more about WRPRO’s copy-trading service or practise with a free demo account first. |
Risk Disclaimer
Any information/articles/materials/content provided by WRPRO or displayed on its website is intended to be used solely for educational purposes only and does not constitute investment advice or a consultation on how the client should trade.
Although WRPRO has taken care to ensure that the content of such information is accurate, - it cannot be held responsible for any omission/error/miscalculation and cannot guarantee the accuracy of any material or any information contained herein.
Therefore, any reliance you place on such material is strictly at your own risk. Please note that the responsibility for using or relying on such material rests with the client and WRPRO accepts no liability for any loss or damage, including without limitation, any loss of profit which may arise directly or indirectly from the use of or reliance on such information.
Risk Warning: FX/CFDs are complex instruments and carry a high risk of losing money quickly due to leverage. You should consider whether you understand how FX/CFDs work and whether you can afford to take the high risk of losing your money.
You should make sure that, depending on your country of residence, you are allowed to trade with WRPRO products. Please ensure that you are familiar with the company’s risk disclosure.
