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Is Copy Trading and Social Trading The Same? What Is a Trade Copier?

Copy trading has gained widespread attention in recent years. Some investors opt for copy trading due to time constraints, while others go for it because of limited market knowledge. However, people sometimes mix it with social trading. Even though they look the same, they certainly have some differences.

In this forex copy trading guide, we’ll review copy trading in-depth and help you understand the difference between the two. We’ll also discuss what is a trade copier and highlight the best copy trading platforms offering such services. Before we proceed further, let’s briefly introduce you to copy trading.

What is Copy Trading?

Copy Trading is a real-time trading method that mirrors the trades of successful traders. The process is automated, and it is up to the individual investor to determine how they want to handle copy trading. Investors typically use copy trading services to trade forex, cryptocurrency, and other financial markets. 

How Does Copy Trading Work?

Investors commit capital to link up with a trading strategy on the copy trading platform. A copy trading account is instantly created once funding is approved and becomes readily available to mimic the selected tactic. When executed, the strategy provider’s trades get automatically replicated in an equity-for-equity fashion.

Types of Copy Trading

You can choose between fully automatic, semi-automated, and manual copy trading.

Manual

The manual is closest to “regular” trading, in which you choose who you want to follow and what trades you wish to copy. Social trading is another common term for this practice.

Semi-Automated

When you engage in semi-automated trading, you get access to your preferred trader’s whole history of trades. Next, it’s up to you to decide whether to follow the trades of a selected trader manually or to copy the trades of your chosen trader automatically.

Automated

The auto copy trading option lets you pick the best traders and trading techniques based on your risk tolerance level. Automatic position and trade replication ensures consistency at all times.

What Is The Difference Between Copy Trading And Social Trading?

While there are similarities between copy trading and social trading, there are also vital distinctions.

By linking your trading account to another trader using a service called “copy trading,” you can automatically mirror the actions of the other trader in your account. You benefit from their success or suffer from their failure depending on whether or not they generate a profit. In simple terms, you take a back seat when you engage in copy trading, and the trader whose trades you are replicating does all of the activity.

You can choose which trades to imitate on semi-automated platforms and apps, but this is not possible when using automated copy trade software. If you’re starting in the trading world, copy trading is a great option because it allows you to trade even when you don’t have much experience. Remember, copy trading has several significant drawbacks, the most egregious being that it prevents traders from learning and exposes them to potentially catastrophic losses if they end up copying losing traders.

On the counterpart, social trading is a more general investment approach that uses social media. Traders can connect, share information, and receive updates on the trades of their peers. A social trading platform may provide its users with access to message boards and chat rooms. Investors can discuss and share trading ideas. Personalized social news feeds keep investors apprised of the latest developments in the trading careers of their leaders and help them know detailed information on each trader’s performance, including their portfolio, risk score, and success rate.

Both copy and social trading are effective trading methods. While some platforms offer free copy trading signals, others may have a little cost associated with the service. However, choosing a trading strategy that fits your requirements and tastes is crucial. Telegram Forex provides both options, including the Telegram to MT4 copy trading app and a forex signal service. Make sure you pick the one that best suits your comfort level and how you want to trade.

Which Markets Are Available For Copy Trading?

Forex, commodities, equities, indices, and cryptocurrencies are just some of the markets your copy trading platform will likely support. Remember, there is always a limitation when you start copy trading. You lack control over deciding which markets your selected leader will trade. Some traders may put their money into the kinds of financial assets that you would never consider buying. Conversely, your diversification choices may be limited if you follow two distinct traders who both deal in, e.g. USD/GBP or gold.

In addition, it is wise to spread your money around and invest in a variety of skilled professionals, such as those that deal in foreign exchange, stocks, commodities, and digital currencies, to reduce the risk of losing all of your money. You can use this method to mirror the actions of other investors in any market, not just forex. Several potential asset categories for trading are outlined below.

  • Forex

The “Foreign Exchange” market (sometimes shortened to “Forex”) is a place where people can trade currencies from all around the world. For instance, you may trade your currency for U.S. dollars, British pounds, Euros, etc.

If you want to talk about the sheer volume of commerce, this is the world’s biggest market. Currency trading is predicated on the assumption that an underlying currency’s value may rise or fall depending on various economic factors. Therefore, traders can engage in speculation and identify trading opportunities due to changes in currency exchange rates. The most popular currency pairs involve the U.S. dollar, GBPUSD, USDCAD, EURUSD, etc.

  • Stocks

Trading stocks entails purchasing and selling shares of publicly traded corporations. Holding shares in a firm means you effectively own a portion of that business. Stock investments yield profits through dividend payments and the increase in value of individual shares over time.

  • Indices

Index investing is a great way to get your feet wet in both the general economy and a specific sector. A market index can show general market movements when equities are grouped. Consider the S&P500 as an example of a stock market index. The index is a measure of the overall health of the stock market. Market participants can choose from a wide range of specialized indices, such as the small-cap-focused Russell 2000 Index.

  • Commodities

Grain, oil, gold, silver, and other precious metals and stones are all examples of commodities. Commodity prices provide an effective way to diversify your portfolio because they are less responsive than stock prices to critical economic announcements. You can trade futures, exchange-traded funds, and contracts for differences under this category.

  • Cryptocurrencies

In the past decade, cryptocurrency has grown in popularity. Due to the unpredictability of digital currency pricing, traders and investors can engage in endless price speculation. Bitcoin (BTC) may have been the first cryptocurrency, but now thousands of other cryptos are in the market.

Why Go For Copy Trading?

Copy trading is a tremendous resource for those new to the market. It enables you to gain insight into the trading of foreign exchange, equities, cryptocurrency, and other financial instruments from more seasoned traders who have developed successful signal trading systems. Let’s enlist a few benefits of copy trading below.

Portfolio Diversification: Taking a diversified approach to your business is wise, as keeping all eggs in the same basket is riskier. With copy trading, you can pick from many strategies that have been compiled from the finest traders across the world.

User-friendly: Investors won’t need to worry about technical analysis, charts, plots, tracking results, etc. You can watch while your mentor makes money off of the deal. Of course, there is no assurance that this strategy will always work. However, professionals have a better chance of foreseeing dangers and avoiding them long-term.

Time-saving: It may take weeks, months, or even years to build a viable action plan. Only some people can afford to do it. They want more straightforward and automated ways to trade without taking risks. When you use Copy Trading, you can leverage the expertise of a person who has already found success with their chosen approach. No need to get creative with new strategies.

Adaptive: When you use copy trading, you observe how specialists make split-second trading decisions and respond to market fluctuations. While strategies remain open to scrutiny, you can keep tabs on them and tweak your plan to make it more effective. So you can eventually develop into an expert in your field. With Telegram Forex‘s full suite of features, you can easily copy the trades of some of the world’s most respected traders.

What Is Forex Trade Copier?

A “trade copier” refers to a copy trading app that mirrors user activity across numerous trading accounts. This is the quickest and easiest way to handle multiple MetaTrader accounts simultaneously and place identical trades on different platforms. While there is a wide variety of account copying tools, most are compatible with the copy trading forex MT4 platform. Notably, there must be at least two MetaTrader 4 (MT4) accounts on the same machine for trade copying to be possible. To your surprise, setting this up takes less than 10 minutes.

Typically, a trade copier is confused with a trade copier service. However, there is a major difference between the two. The former is software built around MetaTrader 4 accounts to copy trades from one account to another. A trade manager or trade copier service executes the trade copy on the software. The Telegram.Forex app can also execute this.

On the other hand, the trade copier service copies signals from the trade copier software, and automatically directs them to your MT4 account. The automated copy-trading feature is a popularly-used service that outweighs the risks involved.

Speaking of which, let us go over the benefits of automated copy trading and the risks that may come along.

Benefits of Using a Forex Trading Auto Copier Service

  1. Of course, you can perform forex trading and make money without even analyzing the market or comparing prices. The work will be reduced to zero. (Except if you choose to initiate a deal on your own, which you always can)
  2. When a beginner enters the marketplace, they spend a substantial amount of time gaining experience, planning approach, etc. During that period, you are making a profit. 
  3. You can diversify your investments, which allows you to share profits from various expert traders.
  4. You can independently set your copy parameters based on the copy-trading performance. 
  5. Add or delete your funds from the copy trader’s account. Then, select only the one whose trading goals match yours. 
  6. Eliminate the burden of wrong decisions and the emotional turmoil that follows.
  7. You gain practical experience with minimal losses.
  8. Forex trade copying services demand a nominal fee, and in return, relieve you of the hard labor.

Ready to use an MT4 trade copier for your trading spree? You may also consider the following pitfalls to weigh your options.

What are the Risks of Auto Copy Trading?

  1. No guarantee of the effectiveness of the trading strategy.
  2. It is a paid service, and a commission is deducted at the beginning of each trading day.
  3. Finding the best copy trading forex platform can be challenging; you could end up registering with a substandard service provider.

Final Thoughts

Forex auto copy trading service is the perfect means to slip into the forex marketplace. Get some money rolling in until you learn and work out your trading strategy to open independent deals. To conclude, get your hands on the best forex trade copier service to begin your venture.