What is FXTM Invest Forex Copy Trading service?

FXTM Invest – Copy Trading

Curious about copy trading? How can copy trading help? What can you expect from a broker?

This guide has compiled all the basics into one easy-to-understand article.

This will allow you to keep up with this social trend that is as simple as it looks.

What is copy trading?

Exactly what the name implies! Copy-trading allows you to copy and link positions taken by other traders. When an investor decides the amount to invest, all trades of the other party are automatically copied in real-time. In other words, when a trader makes a trade, the same trade occurs in the investor’s account.

Investors do not need to enter a buy or sell order and each trade will earn the same return as the chosen trader.

Copy trading is the easiest way to access the expertise of other traders. And you never lose control of your trading results. If you wish, you can close your trading position and open a new one.

However, by linking trading with other traders, you can make a profit according to the skill of the trader.

In fact, you can participate even without deep knowledge of the gold market.

The story of ‘copy trading’

The history of copy trading goes back to 2005 when it was linked with an algorithm developed through automatic trading. Brokers explored the potential of a system that, once linked to a specific trader, could be linked to a trader’s trading account . There was no need to constantly monitor email signals or trade chat rooms. This was supposed to be something big…

What was born was Etoro and Zulutrade, which allowed traders to link their personal trading accounts to the platform. Traders no longer have to submit specific strategies. Since then, copy trading has exploded in popularity .

According to a recent survey… 1 in 3 said the traditional stock market is too complex to access, which can be simplified with auto-following traders.

One in four investors said they considered social trading last year.

The social trading platform is expected to grow to 40 billion euros (annual growth rate: 96%) in 2020 and 70 billion euros (annual growth rate: 48%) by 2025.

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How to use FXTM Invest copy trading?

Copy trading is a readily available automated trade. A simple step-by-step guide:

Use the tools available on the FXTM Invest platform to filter traders and select those that match your investment goals . What is important? Number of followers or return, risk, total working capital or ROI are important. You can choose a few combinations of these, and it may depend on the criteria you consider important.
You decide the amount of your investment and how it will be distributed among the different managers. If you have selected more than one trader to link, choose a balanced amount to distribute to each trader so that you don’t have all your eggs in one basket.
The copy trading platform then automatically replicates the trader’s position to the investor’s trading account.
If the trader is satisfied with the return, he invests more . Or, reduce your exposure to one trader and diversify your portfolio to avoid investing too much in a single trader. Existing traders can be replaced at any time. However, do not forget that you will need a separate Invest Account for each trader you wish to follow.
There is no separate fee to use the copy trading function, except for the fee paid to the strategy manager when a profit is made. The broker fee normally charged for trading is also charged for linked trading.

Which markets are best for copy trading?

Copy trading is available in all markets including Forex, Indices, Stocks, Commodities, etc.

If you want to enter the FX market but are short on time, you can enter the FX market through copy trading without having to learn advanced chart analysis techniques. This can be time-consuming.

Entering and exiting a market is very simple if you want to increase your exposure to one market compared to another. Perhaps you are unfamiliar with the term tech stock, but have you ever wanted to buy Apple or Netflix?

Let’s take a look again at the FX market, a global market that is overwhelmingly large in terms of the trading volume .

The global FX market has a market cap of $1,934.5 billion.
It is 27 times bigger than the stock market.
The daily Forex trading volume is 53 times that of the New York Stock Exchange.
Over 85% of FX trading is centered on major currency pairs such as EURUSD, USDJPY, GBPUSD, USDCAD, AUDUSD, NZDUSD and USDCHF.

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Advantages and Risks of Copy Trading

Advantages of FXTM Invest

The advantages of copy trading are the reasons for the growing popularity of copy trading.

Goal? The goal is to find a trader with a solid return performance and a trading style you want to emulate.

Alternatively, diversifying your portfolio’s risk so that you can trade for a longer period of time can be profitable in both bull and bear markets.

Accessibility: Copy trading offers a fun and realistic path. It is now freely available as social trading and several social trading networks have developed significantly.
Acquire trading knowledge: Copy trading allows you to follow the trades of experienced traders with years of expertise and know-how. You can learn by watching the profitable trades of experienced traders and build your own trading skills.
Dispersion: Numerous trading strategies are available, allowing you to allocate your portfolio to multiple traders across different stocks. By diversifying the risk of individual decisions, you can compensate for the loss of one poorly performing trader. It can also be profitable in many types of market environments.
Ask yourself…: Do you want to invest in oil even though there is a high chance of vandalism in Saudi Arabia? Want to trade with intraday volatility during Jerome Powell’s press conference? Or are you satisfied with quiet daily life, low volatility, and investing in green companies? FXTM’s diverse global expertise allows itself to make any investment you want.
Free time: You can trade all day, as your chosen trader watches the market for you and trades. This means you can spend time with other hobbies!

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Disadvantages of Copy Trading

The main risk of copy trading is, of course, that it carries some financial risk. Trading is characterized by high risk and high expected return.

Market risk: As with other financial markets trading, copy trading carries some risk of loss of principal. There are unavoidable market risks associated with this, and losses may occur depending on the trading results of the chosen trader.
Trader record: Choosing a trader you can trust in the long run is not easy. It is entirely up to you to properly understand the trader you choose. In some cases, if the returns are incredibly good, or if the trader is making profits in a row, it means that a loss transition is not far off.
Execution risk: As with other trading, there is risk involved when trading with insufficient liquidity (the degree to which it is easy to liquidate a holding position). You also need to know what costs are included in a copy trader’s returns, and other aspects such as whether bid/ask spreads are included in the published returns.

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Platform of FXTM Invest Copy Trading

Most software has three copy trading options: automatic, semi-automatic and manual.

FXTM offers the industry standard FX trading platform MT4 that runs right on your PC, MAC, mobile or tablet, so you can trade conveniently anytime, anywhere.

The latest technology from MetaTrader combined with the excellent trading services of FXTM provides a high-quality experience.

Manual is the closest option to ‘normal’ trading, and you decide which trade to link with the trader you want to follow. Many people refer to this as social trading.
Semi-auto trading allows you to view all positions of the selected trader. You can then choose which positions you want to link to and trade them directly, or you can choose to have them trade automatically with the trader of your choice.
Auto Silver is a full-package service provided by FXTM Invest, where you choose the trader and strategy that suits your risk-taking propensity. All positions and subsequent trades are automatically linked.

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FXTM Invest – Copy Trading Terminology

Before you start copy trading, there are a few basic terms you should know.

Here is a list of useful terms.

Diversification: It allows you to avoid trading risk by including different trading strategies and assets in different market conditions. It is also a key advantage of copy trading.
Drawdown: It is the decline from the relative high to the relative low of the trader’s account balance. It is expressed as an absolute value or as a %.
Equity Line: A graphical representation of the signal provider’s account balance.
Fundamental Analysis: It refers to analyzing all news, whether political or economic, in order to predict future price movements.
Investor: A person who uses information by following other traders or directly links trading.
Mirror Trading: You can link the trader’s actual strategy by copying it.
Money/Risk management: It refers to the most important factors that determine profit or loss and how to manage risk. How much should you allocate to each signal provider and strategy?
Signal Provider: A trader looking for signals to be followed by investors or followers/linkages.
Slippage: The difference (in pips) between the order price and the execution price when the trade is executed. Due to market volatility or internet connection delays, order prices may change before reaching the broker.
Social Trading: It allows one or more investors to link their trades within the trading network.
Stop Level: If the market moves in a different direction than expected, the trade close price stop loss set by the trader to reduce losses may vary depending on the trading strategy.
Symbol: Currency ticker symbols are used to indicate currency pairs that are traded on the foreign exchange market. A currency such as the dollar cannot be bought or sold alone and is always traded in conjunction with other currencies.
Technical Analysis: Usually refers to chart analysis that traders use to interpret past price movements and predict future price directions.