Copy FOREX trades is a method introduced by FOREX brokers, so people who are new to FOREX trading can make profits by copying other successful traders. This allowed people to invest their money with a minimum risk and even allowed people with no clue about currency trading to profit from the FOREX market.FOREX is a lucrative market with the daily trading volume reaching 4 trillion dollars. Financial institutions and individual traders made millions out of FOREX trading. This is why many people try their hand at FOREX trading. But many who are new to trading suffer losses because they don't understand the technical terms associated with FOREX trading. Support levels, pivot points, retrace, candle charts, stop loss are just too much to handle for most people. This article will guide you to copy FOREX trades in an efficient manner.
Finding a broker that allows people to copy FOREX trades
This is the most important part. Not every broker allows you to copy other successful FOREX traders. Although more brokers are starting to allow this it is best to choose a broker who has done this for a while. I personally use eToro as my FOREX broker. They are an award winning FOREX platform renowned for their easy to use interface. Their Openbook network makes it easier to find successful traders and they provide many resources for newcomers. If you are a newcomer I highly recommend them because their interface is so much easier to understand. Once you get understand the concept and how it works you can go looking for more advanced FOREX brokers.
Finding FOREX traders to copy
This is the most important thing and a step that will decide how much money you will make. If you want to copy FOREX trades you need to find the successful traders. When finding a trader there are few things you need to consider
- Success rate of the trader - success rate means the percentage of trades that ended up giving profits. Some traders have 100% trading records. These are people who invest high amounts with low leverage. You are guaranteed profits with them but the profit will be small. Any trader that has a success rate above 90% is a good trader to copy.
- Frequency of trades - No point having a 100% successful record if they are trading only once a week. Look for traders who are trading frequently. This way your investment will increase steadily. Just remember you wont get rich overnight copying traders, instead use it as a process to make some money while you are still learning the trade.
- Risk Level of the Trader - Risk level indicates how much risk a trader takes when doing his trades. This usually means the leverage level. If a trader uses high leverage he can earn a lot but he can lose a lot as well. It is advisable to avoid high risk traders.
The optimum solution would be to find a successful trader who trades often with low risk levels. This is a rare combination but you can find them with some careful searching.
Testing current traders and finding new traders
Copying FOREX trades and just waiting wont make you a lot of money. Lots of things can happen once you started following a trader. He might move onto another FOREX broker, stop trading for a while or reduce the number of trades etc. This is why you need to constantly check how they are performing and reinvest your money if necessary. If you see a trader is successful and trades frequently then you can invest more money towards his copies and reduce the amount spent on people who trade less frequently. All these data are available to you in your dashboards as an easy to view overview so you shouldn't have any trouble analyzing them. Also some FOREX brokers sends out a weekly email announcing that weeks successful traders. This makes it much easier to find successful traders. If you decide to copy FOREX trades testing and reinvesting is a must do thing to increase profits.
How much to invest
Most FOREX brokers allow you to start from 50$ but it is always a good idea to invest a considerable amount. Most traders recommend you to start from 10,000$. At least invest around 1000$ so you can see a considerable return for your investment. This also helps you spread your money to copy few traders. This is especially important if you are hoping to do FOREX trading yourself. Investing more gives you the ability to trade big amounts using low leverage. Another advantage is the bonuses you get from FOREX brokers. Some FOREX brokers gives you a bonus as much 50%. So if you invest 1000$ you can get a bonus around 500$.
Learning from the best FOREX traders
Once you find few successful traders you can learn from them and get more comfortable at trading. You can check out which currency pairs they are trading, what are the times they are trading and how they manage risk by using leverage, stop losses etc. If you are interested about learning FOREX following some successful traders online will help you immensely. While following them make sure to practice trading using your practice account. They provide you with some virtual money to get started. Don't be careless just because they are virtual money.
Can I get rich copying successful FOREX traders
The answer to that question depends on the amount you invested and the traders you decided to follow. Although you can copy FOREX trades your end goal should be to learn trading and open your own trades. However if you want a low risk way to earn money from FOREX then copying them is a good way to go about it. If you have any questions feel free to ask them in the comments section.