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Copy Trading | A Guide to Get Started

BY TIO Staff

|Oktober 24, 2023

In this digital age, more people are discovering ways to generate additional income. One approach that is gaining significant momentum is copy trading. But what is copy trading? How does copy trading work? And how can you start copy trading with a reliable copy trading broker?

These are common questions often asked by newbies to trading and copy trading in general.

So we decided to put together this guide to help you make sense of it all.

A guide to get started with Copy trading

Copy trading is a method of investing in financial markets where traders automatically copy the trades of an experienced or already successful trader. In this way, the selected individual’s investment decisions are mirrored in the copier's trading account. This trading strategy aims to leverage the expertise of top-performing traders, offering a unique experience and an opportunity to diversify your trading strategy or portfolio.

Copy trading is sometimes referred to as mirror trading or social trading but the concept is the same. Copying other peoples trades and automatically replicating them in your account.

How does copy trading work?

Copy trading operates on a simple principle: when the trader you've chosen executes a trade, the same trade is executed on your account simultaneously. You allocate a specific percentage of your investment funds for copy trading. Once set, that portion of your capital will copy the actions (buy, sell, stop-loss, take profit, etc.) of your chosen trader.

How much you gain or lose will directly depend on the performance of the chosen trader's actions. Therefore, it’s crucial to carefully select the traders you decide to follow, based on their historical trade performance, investment strategy, risk tolerance, and other vital metrics available on a copy trading platform.

Choosing your copy trading broker

What's essential in your copy trading journey is choosing a reliable copy trading broker. Here are some critical aspects to consider:

  1. Reliability & Safety: Ensure your chosen broker is reliable and safe, enhancing the safety of your investment.
  2. Transparency: Look for brokers that provide transparent reporting of the performance of the traders available for copying.
  3. Diversity: A good broker should offer a broad selection of traders to copy to diversify your risk.
  4. Usability & Support: A user-friendly interface is vital, and so is excellent customer support.
Copy trading strategy providers performance

How to start copy trading

Getting started with copy trading involves a few basic steps:

  1. Research: Understand the ins and outs of copy trading, risks involved, and how to maximize your success.
  2. Broker Selection: Identify a trustworthy broker as discussed earlier.
  3. Account Creation: Create and verify a copy trading account and register as a follower to copy other traders.
  4. Fund your Account: Deposit funds into your account based on your intended investment.
  5. Select Traders to Copy: Analyse the traders available on the platform, examining their success rates, trading strategies, and risk levels before deciding whom to copy.
  6. Start Copying: Once you've selected your trader(s), set the amount of your funds you wish to use for copy trading and start the process.
  7. Monitor: Regularly review the trades and monitor the strategy providers performance to ensure they align with your investment goals. You may choose to stop copying a trader or alter your allocation anytime.

Copy trading can be an effective way to participate in financial markets. However, you should understand that all forms of investment carry risks.

How to become a strategy provider to attract copy traders

Here's how you can become a strategy provider with TIOmarkets.

1. Open a Copy Trading Account

Register an account with TIOmarkets and create a copy trading account on the MT5 trading platform in your secure client area.

You can register here.

2. Deposit Funds

Next, you must deposit funds into your account. The minimum deposit to become a strategy provider is $250 or equivalent.

3. Create Your Strategy Offer

As a strategy provider, you will need to register on the copy trading portal to create your public profile and the offer to attract followers. When followers subscribe, they will automatically copy your trades in real time.

Your trading results and offers will be made public for potential followers to analyse your track record and decide if they want to follow you.

One of the benefits of being a strategy provider at TIOmarkets is you can decide on the terms to copy you. You can get rewarded in 3 different ways as follows.

  • Performance Fees: Calculated based on a high water mark level either daily, weekly or monthly. You can earn up to 30% of your followers' profits.
  • Management Fees: You can also earn a monthly management fee up to $30. This is an optional ongoing fixed monthly fee.
  • Registration Fee: This is an optional one-time fee decided by you as the strategy provider. You can charge up to $30 to followers when they subscribe to start copying your trades.

4. Trade & Earn

As a strategy provider, you trade like you normally would. If you are a successful trader, you will not only profit from your trading, but from your followers as well. This gives you an opportunity to earn extra income.

While being a strategy provider can be rewarding, remember that successful trading is required to draw in and retain followers. As well as creating a reasonably attractive offer and profile.

You can learn more about forex trading here and register an account with TIOmarkets to get started.

Risk disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Never deposit more than you are prepared to lose. Professional client’s losses can exceed their deposit. Please see our risk warning policy and seek independent professional advice if you do not fully understand. This information is not directed or intended for distribution to or use by residents of certain countries/jurisdictions including, but not limited to, USA & OFAC. The Company holds the right to alter the aforementioned list of countries at its own discretion.

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Trade responsibly: CFDs are complex instruments and come with a high risk of losing all your invested capital due to leverage.