Have you ever considered outsourcing your wealth growth? How about doing so for the most liquid market of them all? Copy Forex trading can help you with both! This has many merits, but there are also risks to be involved, not least the famous one: past performance is not an indication of future returns!
The firm's main research and development office is based in Tel Aviv Israel. It originally specialized in Forex and indices spreadbetting and CFDs but has recently expanded in stock trading also. At the time of writing, eToro has 2.2 out of 5 star on Trust pilot. The comments suggest that the platform offers some impressive features but withdrawing money can be difficult. Having said that, some of the negative reviews appear to be rants rather than constructive criticism. This can be examples of traders losing money through their own recklessness rather than eToro's fault. You should therefore take this reviews with a pinch of salt. OANDA is a global financial services company providing advanced currency solutions to both retail and corporate clients all over the world. In this article, we are going to review this broker’s trading options, tools, platforms, spreads, commissions, security measures, and educational resources to help traders make the right choice. AvaTrade offers a wide variety of trading solutions (spread trading, CFDs, and social trading), and peace of mind with its comprehensive regulation, covering the EU, Australia, Canada and South Africa. Clients can use a variety of platforms for discretionary and automated trading.
Best Award Winning Brokers
Show Search Filters
76% of retail investor accounts lose money when trading CFDs with this provider.
76.6% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing
76% of retail investor accounts lose money when trading CFDs with this provider.
Takeaways
What is copy Forex trading
Why is can appeal to those of who want to invest with less risk
How you can take part
Currency trading is when two currencies are traded, by selling one and buying another. The Forex trading market is the most liquid of them all and is open 6 days a week 24 hours a day. This is possible as different financial centres take over the baton of Forex trading.
Although currency trading was originally performed for business reasons: buying raw materials in dollars, but selling the finished item in pounds, today it is largely driven by speculation.
As currencies are not as volatile as other asset classes, they are seen as lower risk. This reduces losses when they occur. It is important to remember that everyone can profit from a trade but not everyone can avoid regular losses. Traditionally the dollar is seen as the strongest currency in the world.
Copy Forex trading is a trading strategy where you copy a successful Forex trader. In effect your outsource the currency trading part of your portfolio to someone who has a track record of success.
In a world where many are rushed off their feet with the normal chores of life, financial planning often gets left out. Copy trading allows you to grow your wealth whilst maintaining some control of your assets. If the trader you are copying performs badly on a consistent basis then you have the ability to switch to another.
Because you do not have to do it? No need to spend hours reading economic or data reports. You are outsourcing your wealth creation. You could also assign different traders different parts of your stock portfolio. For example you could assign one to gold, silver or bond investing. You can also spend more time on your hobbies (watching cat videos anyone?)
If you interested by eToro please click here (worldwide, non-USA based customers).
*76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Forex trading is also lower risk. If your account ends up including major currency pairs which involve any of the following currencies, USD, EUR, GBP, JPY, you are unlikely to have major price swings. This caps your losses (and gains too!). This means your wealth will grow in a consistent manner without too much volatility. In turn you can sleep soundly at night! (Trading can be, and often is stressful)
Although Forex trading is considered relatively staid risk wise, there are some nonetheless. When the SNB removed the price cap against the Euro in 2015, it shocked everyone. Some trading platforms also went bankrupt. If the professionals got it wrong, many so called 'professional' copy traders may also get it wrong. They may also have taken greater risk using leverage.
Leverage is the killer of any trader. Using leverage is akin to picking up pennes in front of a steamroller. You will make small amounts of money before it eventually gets you. Its the same with trading, the one time your leverage position goes against you it will clean you out. Do not copy traders who use leverage.
There are several platforms which offer copy trading. The most famous is eToro. It is the market leader. This is important as it means there are more copy traders to chose from. Anyone interested should follow the following links for USA customers and worldwide (non-USA) based customers
You should also be aware of Naga and Avatrade, each of whom has a strong following. They each will have traders offering for you to copy their strategy. Before selecting one or more, check that they focus truly on currencies and not riskier corners of the market such as cryptocurrencies.
Another check, and this will take a bit of work, is to see how they performed in a downturn. Timing the market is incredibly hard, but there are sensible steps a trader can take. This can mean reducing profitable positions when the market is running ahead of itself or buying some form of protection.
There are also variants of copy trading such as and social and mirror trading. The former means interacting with other traders who assist you with their trades, this will require time and effort on your. The latter means only copying some of the other traders strategy, not the entire account (as per copy trading).
Copy Forex trading can be an interesting addition to your overall investment strategy. Many investors do not bother (at their loss) from investing in currencies. Some do in an imperfect manner through a foreign portfolio investment.
Do not forget that the two largest currencies in the world, the dollar and Euro are backed by two of the most reputable economic areas (the USA and Europe). This makes them safer than many other investments. Can you therefore pass on this opportunity?
You May Also Like…
