Making profits in financial markets requires experience, knowledge, and continuous monitoring, which can be challenging for many. This is where the concept of copy trading (Copy Trades) comes in as an innovative solution. It enables investors to benefit from the skills of professionals and their well-considered decisions, increasing their chances of making a profit. For this reason, copy trading has gained wide popularity among traders who lack experience in trading, as well as those who have limited time to manage their trades. In this article, we will provide a comprehensive review of the concept of copy trading and the best specialized companies in this field.

What is Copy Trading?

We can consider it as a trading tool or method offered by certain platforms, allowing a trader to copy the positions of an expert trader. In simpler terms, when this expert opens or closes a position, it is automatically replicated on the beginner’s or copier’s account without any human intervention. Thus, those without trading experience or enough time to follow the markets moment by moment can make investment decisions directly and automatically based on professionals’ decisions. This system relies on software or platforms that enable such mirroring or copying.

The copy trading style, sometimes called “mirror trading,” emerged in 2005. Initially, traders copied specific algorithms developed through automated trading. Developers shared their trading history, allowing others to replicate their trading strategies.

Generally speaking, copy trading focuses on short-term trading, particularly day trading strategies. Copy trades often concentrate on assets within the Forex market, as well as cryptocurrencies and other complex or volatile markets.

Advantages of Copy Trading:

• Copy trading allows you to diversify your investment portfolio in unfamiliar markets that you wish to trade in due to their strong investment opportunities. By using copy trading, you can access the expertise of another trader or maximize the benefits of seasonal trends that you might not normally consider as potential opportunities.
• Through copy trading, you can make the most of your time by making quick decisions based on the choices of traders who have proven, profitable performance records.
• Investors can reduce risks by following professional traders, helping them benefit from successful strategies and achieve stable returns.
• Copy trading can reduce the stress associated with making investment decisions and enable users to learn professional analysis and investment methods.

Disadvantages of Copy Trading:

• Copy trading may not provide a strong incentive for traders to conduct their own research and learn about the markets.
• Copy trading does not completely eliminate risks. Sometimes professionals use this method to influence market prices for their own financial gain.
• There may be other risks associated with fully relying on others’ performance, such as significant losses if the professional fails to achieve profits. The professional might be able to bear these losses, but the beginner may not.
• This system may require fees or commissions that can affect total profits. Additionally, users should recognize that copying does not eliminate the need to follow the market and understand the fundamentals.

While copy trading can help when you are first getting started, it is not the only available trading strategy. However, the appeal of potential earnings with minimal work may be enough for some people.

How the System Works:

With copy trading, the investor has the option to automatically execute every trade performed by another trader, mirroring their performance in their own account. Therefore, the investor does not place their money in the hands of a fund manager or an expert managing the portfolio (as is the case with common investment methods). Instead, the investor simply opens their own trading account, retains ownership, and then links it to the professional trader’s account (selected based on their stable trading record) through a platform or broker that supports copy trading.

In simpler terms, the funds always remain in the investor’s possession and are not handed over to a third party. Instead, the investor delegates the management of their account to another trader (or multiple traders) to automatically copy their trades.

For copy trading, you need a broker to open a trading account through which you can receive the trade signals from the traders you’ve decided to copy. This is done via the copy trading platform.

Below is a list of the best companies that offer copy trading services, along with the advantages of each:

Pepperstone

• Pepperstone holds licenses from globally recognized regulatory bodies, ensuring the protection of client funds and boosting trust in the company.
• Pepperstone uses MetaTrader 4 and MetaTrader 5, well-known trading platforms that offer advanced technical analysis tools and easy copy trading functionality.
• Pepperstone offers a range of account types to suit different trader profiles, including Islamic accounts.
• Pepperstone is characterized by low trading commissions, making it easier for traders to achieve higher profits.
• They provide 24/7 technical support in multiple languages, making it easier for clients to get help when needed.

XM

• XM offers a variety of account types that allow traders of all levels to choose the account that suits their needs, including standard and micro accounts.
• XM provides comprehensive educational resources, including webinars and interactive lessons, helping new traders improve their skills.
• The company offers popular trading platforms like MetaTrader 4 and MetaTrader 5, giving investors access to various online user forums.
• XM’s Copy Trading feature allows traders to easily replicate successful traders’ strategies.
• XM offers bonuses and promotional campaigns that appeal to new traders, such as deposit offers and incentives for opening new accounts.
• XM provides advanced technical analysis tools to help traders make informed decisions.
• Also, the company holds several important internationally recognized regulatory licenses to ensure the protection of client deposits.

Zulutrade

• The company offers a copy trading option where users can choose traders based on factors like performance and risk.
• Provides a wide range of different strategies that can be copied.
• Offers tools to help you make informed decisions based on performance data.

CopyFX

• The company provides customization options for copy trading, allowing for the setting of desired risk and return levels.
• Supports direct communication and performance analysis of traders.
• Professional traders can earn commissions from investors who copy their trades.

eToro

• The company has extensive experience in social trading, enabling users to interact and share ideas.
• A user-friendly design makes it easy for beginners to get started.
• Offers trading in stocks, Forex, and digital currencies.

AvaTrade

• The company offers a variety of copy trading accounts to meet the needs of investors at different experience levels.
• Provides numerous technical and news analysis tools.
• Offers educational content and courses to enhance your trading knowledge.

In the end, before committing real capital based on another participant’s advice—no matter how professional they may be—you should conduct some of your own analysis, even if you are not familiar with the underlying market. This is especially important if you are unfamiliar with how a particular market operates.

Yen fell in Asian trade on Monday against a basket of major rivals, expanding the losses for the sixth straight session against the dollar, and plumbing three-week lows as investors await the Bank of Japan’s latest policy meeting of 2024.

According to media reports, the BOJ will likely maintain interest rates unchanged as inflationary pressures stabilize with yen’s recent strength.

The yen is also pressured by higher yields on US 10-year treasury yields before the upcoming Federal Reserve’s monetary policy this week.

The Price 

The USD/JPY rose 0.25% today to 153.97 yen per dollar, the highest since November 26, with a session-low at 153.32.

The yen lost 0.65% on Friday against the dollar, marking the fifth loss in a row as US treasury yields rose and the odds of a BOJ rate hike in December diminished. 

The yen lost 2.4% last week, the second weekly loss in a row, and the largest since late concerns about the widening yield gap between Japan and the US.

The BOJ

According to Reuters, five different sources said the Bank of Japan prefers to maintain interest rates unchanged next week as they continue to analyze risks abroad and wages forecasts.

The sources said there’s no consensus in the BOJ about the final decision, with some still estimating that Japan has fulfilled the conditions of raising interest rates in December. 

A BOJ source told Reuters that Japan isn’t in a position that requires an immediate rate hike, with another source believing that time could be used to analyze data in a deeper and fuller way. 

Japanese Rates

Following the report, the odds of a 0.25% interest rate hike by the BOJ next week tumbled from 65% to 25%.

US Yields

US 10-year treasury yields traded at three-week high at 4.407%, boosting the dollar’s standing. 

The developments come before the Federal Reserve’s policy meeting this week, fully expected to cut interest rates for the third time. 

However, the Fed is also expected to hint at a slower pace of interest rate cuts next year, which could prop up the greenback.

Corn, soybean, and wheat prices slid on Friday in Chicago under pressure from the stronger dollar against most major currencies, after the European Central Bank’s interest rate cut, and following weaker than expected weekly exports.

The dollar rallied against the euro after the ECB cut rates for the fourth time this year, while US consumer prices marked the biggest increase in seven months, making dollar-denominated exports costlier in global markets. 

According to the US agricultural ministry, net corn exports reached 946.900 metric tons, below estimates of 1.1 million metric tons. 

US soybean sales clocked in at 1.1738 million metric tons, below estimates as well.

Technical factors also contributed to the losses, with corn futures due in March facing a 200-day SMA resistance, while soybean January futures failed to trespass the 100-day SMA barrier.  

The Brazilian government raised its estimates for soybean production in the 2024/25 year to a record high. 

The dollar index rose 0.1% as of 19:45 GMT to 107.01, with a session-high at 107.1, and a low at 106.7. 

Corn 

On trading, corn futures due in March fell 0.2% to $4.42 a bushel.

Soybeans 

Soybean futures due in January fell 0.7% to $9.88 a bushel.

Wheat 

Wheat March futures fell 1.2% to $5.52 a bushel.

Ripple rose on Thursday and contained the losses sustained in recent sessions due to profit-taking, following a series of stunning surges by Ripple. 

US two-year treasury yields rose 1.5 basis points to 4.215%.

US 10-year treasury yields rose by two basis points to 4.335%, the highest since November 22, while 30-year yields rose 2.5 basis points to 4.57%.

Earlier data showed US consumer prices rose 2.7% y/y in November as expected, up from 2.6% in October.

US producer prices rose 3% y/y in November, above estimates of 3.6%, and up from a revised 2.6% increase in October.

Therefore the Federal Reserve will likely continue to cut interest rates at upcoming meetings, with the odds of a 0.25% interest rate cut next week standing at 97%.

US President-elect Donald Trump said in an interview that the US will achieve great progress in the crypto field, and will not accept China or any other country to pioneer in this field. 

Ripple 

On trading, Ripple rose 2.7% on Coinmarketcap as of 21:47 GMT to $2.42, with a weekly profit of 3.1%.