Copy trading allows less experienced traders to take advantage of the Forex market’s profitability. Through this system, they are able to copy the trades of seasoned traders with proven track records.
With so many traders to choose from, deciding which one to copy may seem easy. However, these traders behave in the market differently. They have differences in their trading habits, risk tolerance, and strategies. This makes the selecting process a tricky one.
How do you choose the best one?
We put up a few tips on finding the best traders to copy.
Consistent Profit-Earner for 1 Year or More
Most copy trading providers display the performance of their copy traders. The first thing you would want to check in a trader is if he has been a consistent profit-earner for 1 year or more. This means you should not get too excited investing in traders who have only been earning profits for a couple of months because there’s no guarantee that they will be able to continue to be profitable in the long term. What if their system or strategy only works at the current market condition? What if the trend reverses? Choose a copy trader who can perform well during different market conditions.
Responsive Trader
There are many cases in which copy followers don’t receive any message from their copy traders at all. There should be regular communication between you and your chosen copy trader to clear any doubts. A responsive trader means he closely monitors his account, giving you peace of mind that he takes care of his followers.
Attributes of the Trader
As we have said, different traders have different trading habits. It’s essential that you are aware of how your copy trader behaves in the market. Does he like to scalp? Knowing that it’s a risky style, are you willing to risk your money? What are his favorite currency pairs to trade? Does he employ automated trading systems?
Copy Trade in Demo Mode
Not all brokers have this feature. If you want to test your chosen copy trader’s trading system, copy their trades in demo mode. This allows you to get a feel of his trading without any financial risk.
Also read: What is TMT Scalping System?
