Some trading strategies are more profitable than others, and it’s not easy to find or develop your own. If only you knew what trading methods work best and how to put them into practice…
In this article, we look at how you can profit from having access to the best performing trading strategies.
Known as mirror trading, the revolutionary method allows you to connect your trading account to a clever system that automatically mirrors the best algorithmic trading strategies – in any market!
Mirror trading is a method that allows any trader to set their account to automatically “mirror” the decisions taken by a pre-selected trading strategy.
It’s a bit like mirroring the movements of another person while you’re on a date or in a business meeting… except instead of building a personal connection, you’re able to build a portfolio of winning trades.
Mirror trading empowers new traders by providing access to proven strategies and techniques that have been developed and proven by experienced traders. As such, mirror trading is a branch of social trading.
Instead of competing against other traders to reach the top, you can see who is already there and link your account to their trading strategies. This is great news for those of us who don’t have the time or patience to put in all that work.
The exact steps to take depend on the broker you go with, but you’ll be thrilled to know that the mirror trading process is surprisingly simple.
It involves depositing funds into your brokerage account, linking your account to one of the best trading strategies or best performing traders, and then allowing the algorithm to do its thing. There’s no need to research any trade idea or place any trades yourself.
Here is how the process usually goes:
1. Find the best mirror trading platform that meets your specific needs (see our recommendations later on in the article), open an account, and then deposit a small amount of capital (most platforms allow you to get going with a minimum deposit of $250).
2. Once your account is activated, you can browse through the different trading strategies that are available for you to mirror.
3. Find the top performing strategy, and then go through the steps needed to link your account to the specific trading algorithm.
Have you ever wanted to make money from the markets, but just felt overwhelmed with all of the different options and technical lingo?
You’re not alone, as research shows that 80% of day traders rarely continue beyond two years of trading.
Mirror trading acts as an easy solution because not only does it allow novice investors to get their feet wet, but it also gives an advantage to traders of all experience levels.
This trading method allows you to learn from others and ultimately have more time on what’s important: family, friends, and hobbies. Alongside this time saving, mirror trading allows you to diversify into multiple financial markets, which lowers risk and allows for more opportunity.
Mirror trading may be the best option if you want to:
Mirror trading can be profitable if you connect your account to the correct trading strategies.
Also, you’ll never miss out on any potential opportunities for profit because your trades will automatically execute when the specific algorithmic rules are triggered.
However, before you start deciding what colour Ferrari you’ll be buying, it’s important to note that nothing is guaranteed.
The truth is that mirror trading carries the same risks as traditional trading, which means you can lose your money if you’re not careful!
Just because a trading strategy has been profitable for three months on the trot, it doesn’t automatically mean that it will continue to work when you start using it. You see, past performance is no guarantee for future success and all traders go into draw-down at some point, which means you may not get the results you were expecting.
Mirror trading can be seen as a simple and profitable endeavour. However, in order to be successful, there are a few factors that can help:
Successful traders set themselves up with a plan, follow it, and then never lose focus. Every trader will experience losses, but they should be minimised by following risk-management principles, like not risking more than 1% of your account on any single trade.
You see, losses are part of the game. It’s how we deal with losses that separate the profitable from those who lose it all.
Trading novices may benefit from watching experienced traders – The novice trader can learn a great deal from watching professionals and their successes. Also, finding the best trading strategies is great for helping the novice trader to understand why the strategy works, plus get acquainted with an instrument they wouldn’t otherwise be aware of.
Information can be shared with other traders for common benefit – A trader who’s an expert in certain asset classes can share their expertise with other traders. This is a huge benefit to those who choose to mirror them, as they’ll be able to make educated trades based on the advice of someone qualified and experienced!
Mirror trading removes the emotions associated with trading – The ability to mirror trade with an automatic trading system eliminates the stress of making important decisions. Not only does this do wonders for your mental wellbeing, but it means your trades remain independent of any negative emotions.
This form of trading can be more time efficient than others – With the power of mirror trading, traders now have access to an automated system that trades their account on a 24/7 basis. This means your account will be trading while you’re commuting to work or even just walking down the street!
Make more profit from using proven strategies – Mirroring a proven strategy is the most reliable way to win when it comes to trading, so don’t try innovating on your own.
There are some that make a living trading day to day, but the numbers don’t lie. In fact, a new study from Brazil found that 97% of day traders there lost money, meaning most people lose when they attempt to trade the markets. The only way to make a profit from trading seems to be by mirroring the small percentage who are able to turn a profit.
Good traders allowing you to copy trade may demand compensation – This is usually in the form of an annual membership or percentage-based commission on any winning trade made through your account.
Furthermore, the broker may charge lower spreads per trade for their “master traders”. Not only does this mean that you’re charged more for the same service, but this can also result in the master trader being profitable, while you’re suffering a loss.
This is an important consideration and perhaps a reason to avoid day traders. In fact, following long-term, low frequency traders on higher time frames will result in fewer executed trades and less brokerage fees overall – result!
The risk involved with mirroring bad trading decisions – You mirror the exact decisions made by the algorithm, which means the success is largely out of your hands. As such, you’re required to spend a lot of time finding a strategy that makes as few mistakes as possible.
Can provide a false sense of security – Mirroring successful strategies can lead to great profits, but nothing is guaranteed. It’s this belief that nothing can go wrong which provides a false sense of security and results in poor decision making, like overinvesting.
Researching more experienced traders takes a long time – Although you won’t be placing any trades yourself, you still need to find the best strategies to mirror. This requires a lot of research and due diligence.
Past results are not always indicative of future results – Many traders don’t know how to adjust their strategies when the market shifts from one extreme state to another. A strategy that was profitable in an upswing may no longer work for them during a market correction.
Using social trading, experienced traders are able to help novice investors make the right decisions with their investments. Social trading platforms allow people from all over the world to connect and analyse each other’s trades.
Mirror trading involves setting a portion of your capital to mirror the actions of an algorithmic trading strategy in real-time. Instead of waiting for you to take action, the system will automatically execute trades.
If you do mirror trading, then by definition you are also a social trader. However, it’s also possible to be a social trader who doesn’t do mirror trades.
Mirror trading and copy trading both fall under the category of social trading, but there are some slight differences between the two methods.
Copy trading is a modern-day strategy in which traders automatically copy trades made by other, more experienced investors.
Mirror trading is similar in that you automatically copy trades, except this time you’re usually copying automated trading systems and expert advisors (EAs), rather than the human decisions of another individual.
Creating an account is easy, and you can even do it with your mobile. Simply fund your brokerage account using a credit card or wire transfer, and then choose from one of the many trading strategies to put into play on any given day.
The automated trading system follows every move made by fellow investors with no need for additional input – phew!
In order to have a fun and successful experience, you should:
Following these tips will prepare you for success. Choosing the correct strategy is of massive importance, so make sure to review the historic performance and always be mindful of how much you’re allocating to that one strategy.
The trading world can be a tough place, but it’s all about picking the right strategy. Picking your platform is just as important though: there are plenty of awful platforms out there!
When looking for the best mirror trading platform, it can help to have a checklist by your side. Right at the top of this checklist is the need for the platform to be regulated in your jurisdiction. Here are a few other things to look out for:
Regulated – Some platforms are regulated and held to account by government regulators, but others have no oversight. Ensure that the platform is governed in your jurisdiction for full coverage. You wouldn’t ask a random guy to manage your bank account while you’re on vacation, so don’t do something similar when it comes to your trading capital.
User friendly – Mirror trading is all about simplifying the trading process. However, some platforms didn’t get the memo. It’s important that using the platform is easy to use; otherwise you may get frustrated and make incorrect decisions.
Real-time trader performance tracking – You need to keep a close eye on the performance of your traders. Not only should this be done frequently, but it must also be done in real-time to avoid traders who have recently lost their mojo!
Furthermore, traders who show their performance from the furthest dates back are often more reliable than those with only a recent history.
Good reviews – One way to find the best platform is by looking at what other users are saying on vetted review sites, such as Google Reviews. You can get a great sense of how happy people have been with their experience and whether or not they would recommend this platform to others!
With that said; there has been a rise in fake reviews due to competitor attacks or customers who are blaming their lack of success on the broker. In fact, the Competition and Markets Authority said that they had “found troubling evidence of a thriving marketplace for fake and misleading online reviews”.
After a long and meticulous search for the perfect mirror trading platform, we discovered eight that truly deserve to be on this list.
We have analysed and reviewed each of these platforms carefully so that you don’t need to stress about which is right for your needs any longer! Just take a look at our list below, read through their bios (don’t worry they’re not too long), and choose whichever one suits your needs most closely.
AvaTrade has been around since 2006, and they have a suite of tools to help you trade. You can use the MQL5 Signal Service for automated trading, or API Trading if that’s more your style. Duplitrade is their newest tool, with which you will be able to mirror trade in an easy way.
AvaTrade is a company that operates in the forefront of finance and technology. They are regulated by many of the world’s most prominent regulatory authorities; including those from Europe, South Africa, Japan, Australia, and UAE. The British Virgin Islands also give them legitimacy to operate on their shores as well.
AvaTrade provides you with the opportunity to trade on forex markets from anywhere in the world. They offer real-time streaming of market data, competitive spreads, and a wide range of trading options.
The platform has an extensive range of trading platforms, making it accessible to beginners and advanced traders alike. You can choose from MetaTrader 4, MetaTrader 5, MetaTrader for Mac, and the MetaTrader mobile app.
NAGA Trading is a Fintech company that offers traditional financial markets, cryptocurrencies, and virtual goods.
One of the coolest features of this platform is the “Naga Wallet”. This is not just any ordinary purse or pocketbook; it’s innovation at its finest. The wallet offers a place for you to store all of your digital currency securely, while still being able to access it on the go with their mobile app! It even comes with a currency exchange for quick deposits and the ability to swap currencies.
Joining the platform also means you’ll have the NAGA card at your fingertips. You can use it for instant transactions and payments, 24 hours a day and 365 days of the year – anywhere in the world!
To make your trading experience a breeze, the UI is simple and easy to use, but comes with a range of sophisticated features. One example of this is the advanced algorithm that finds the best strategies for you to mirror.
MultiBank is one of the few brokers that offer investors a variety of trading products, including stocks, futures, options contracts, and currency markets like Forex.
With 11 different securities regulators across 5 continents, traders can rest assured that their personal and financial information is safe while they trade.
The account opening process is fast and intuitive. You also have many options when it comes to deposits, with all of them having no fees. The customer service team is responsive and helpful, so don’t be afraid to reach out to them if you have any questions.
The feature that really sets it apart is the ability to mirror more than strategy at a time.
One of the downsides to trading CFDs is that there are high fees. But it’s also important to consider how often you will use the platform, as there are fees associated with inactivity.
FP Markets offers Forex, futures, and options trading for retail investors with a number of features to help them succeed in their trades (thanks to the MetaTrader suite).
This platform is not your typical, run-of-the mill broker. They offer an ultra competitive spread through their Raw ECN account to ensure traders are getting the best possible deal on trades.
Unlike some other mirror trading services, FP Markets enables you to follow the trades of multiple providers at once. This is useful for those who want maximum diversity in their portfolios and do not wish to limit themselves with a single provider’s offerings.
The company offers a wide range of tools that can be used to help manage risk, with the goal being protecting investors from loss while also guaranteeing institutional grade liquidity.
Founded in 2006, eToro is the leader when it comes to social trading.
Unlike other platforms that have mirror trading as a side feature, eToro has built a platform with social trading as the foundation. The user-friendly interface makes it easy for traders to navigate and interact, which is why this platform has become so popular since its inception.
eToro is much more than just mirroring trades. There are a variety of social features that help you engage with traders and like-minded investors. For example, the “feeds” section of the platform is designed to allow users to keep up with traders, just like they would on Twitter or Facebook.
There are over 1,000 assets available to trade on, which means you’ll have plenty of options and be able to diversify yourself. Although this is a US friendly platform, US citizens can only mimic trades placed on cryptocurrency assets.
Based out of Greece, Zulu Trading offers copy trading services to its users around the world – even those residing inside America’s borders.
Zulu’s introductory offer of a free demo account could be the doorway into trading that you’ve been looking for. Give it a try and enjoy full access to all their features, including practicing your skills with unlimited virtual money!
The site features more than 10,000 different traders from all around the world, so you will always be able to find someone with a strategy that suits your needs!
US citizens will be happy to learn that they can use ZuluTrade, but some compromise needs to be given. For example, account holders will mirror trade one pair at a time. This is because of regulatory constraints in America that limit how many pairs can be opened concurrently on an account.
Collective2 is a trading platform that takes advantage of the latest technology to create an all-inclusive, easy-to-use experience for traders. The Collective2 system has been validated by US agencies and amassed over 78,000 users from around the world with its great reputation.
1. Automatic Trades (ATS) – Have an automated trading service execute the best algorithmic strategies for you.
2. Social Trading (ST) – You may not have the time to do all of your research, so just copy trades from traders who are already doing it for you!
The trading chat room is a great way to interact with other traders and learn from the best. You can even ask for advice or feedback on your latest trade!
The site C2 offers you the opportunity to get a demo account. This gives £100,000 of virtual cash for you to test on over 5000 different trading systems. Once ready and satisfied with your progress in the free trial period, one then pays a fee per system that they wish to trade with online.
The MQL Company is dedicated to providing trading terminals for online forex and cryptocurrency traders. They offer the MetaTrader platform, which can be used on any market you choose!
MQL5 is advanced trading software that caters to people with limited funds. Most traders use the MetaTrader4 or MetaTrader5 platforms, but both platforms require a subscription and a small fee if you want to mirror trade.
With so many traders and signals providers out there, how do you know which one is right for you? Well, you can use their advanced search function to filter the signal providers by drawdown, the average leverage used, monthly profit, and much more. If this is too much work, then you can rely on the “Reliability” parameter, which aggregates several parameters to give you a reliability score.
The free demo account will give you access to over 7,000 strategies from the best investors and traders in the industry. The downside is that you must stay connected to MetaTrader to execute your trading strategies.
Strike when the iron is hot. If you see that a trading strategy is performing well, take action! But while mirroring the trending strategies can be highly profitable, it’s best to find profitable strategies with a positive track record over the longest period of time possible. While big/quick gains are appealing, it’s advisable to be wary of such trades, as this could be a fluke in an otherwise volatile and unproven trading strategy.
Know when to call it a day. Some trades are going to be more of a challenge than others. Even if you’re on an upswing, it’s important to recognise when the trading strategy isn’t working out as planned. You can streamline your strategy by setting a predetermined drawdown level. In this way you objectively know when it is time to walk away from the trade.
Diversify your markets. Mirror trading is a great way to diversify your investments without having to learn everything there is about that field. You should take advantage of this by following the best strategy in each specific market.
Keep an eye on changing strategies. Market shifts and changes are a natural part of the trading process. But you should always be aware of strategy changes; otherwise the success of future trades is undermined.
Follow the best traders closely and adapt quickly. Just having a few big wins does not automatically make someone a “great trader”. The key is to look for traders who consistently perform over time. They are best than the one who “wins big” every so often.
Also, lookout for traders who suddenly behave differently. Examples include tripling down on losing trades, as these people should be unfollowed before things escalate.
Putting the advice from this article into practice will put you on the path to success. Before we get started, there’s a few more things for us to think about:
In conclusion, mirror trading is a popular way of gaining exposure to the markets for many reasons. It doesn’t matter if you’re a newbie or already have some experience. This method works with nearly any lifestyle or schedule!
However, mirroring won’t help turn your spare change into millions and make all your dreams come true! The truth is that it comes with the same risks associated with traditional trading.
If you’re just starting out, don’t dive in with your own money. Start by practicing and learning proper risk management techniques on a demo account. This way no real money will be at stake. Oh, and of course make sure to follow the tips from us friendly people at The Lazy Trader.