The international foreign exchange business is a very attractive place for investment. After all, the more liquid assets are traded there. Choosing a good strategy, high-quality analysis of the market situation, and the right choice of the moment to enter a trade can bring excellent profits. A large number of users are thinking about how to start a forex business. But remember that this segment is also very risky. It is necessary to study a large number of details and nuances, gain experience, and try different strategies. It takes a lot of effort and it will take a long time before you start a cryptocurrency exchange business in Forex.
However, there is a great way to save time and avoid common beginner mistakes. We are talking about the copy trading method. Let’s find out more about this Forex trading method.
Basic Principles and Benefits
First of all, you need to figure out what is copy trading. This is copying of transactions of highly efficient traders that have shown their trading skills. We can say that this is a new way of earning money on Forex both for newcomers and for the professionals of stock trading. The first get a chance to watch the trading of experienced traders online, subscribe to signals, and copy successful trades. The latter can receive additional income from profitable strategies thanks to the commission from subscribers. Obviously, this approach has several important advantages:
- No need to waste time learning. You don’t have to learn a ton of strategies, try them, and lose money (if you fail). You just need to get the idea how does copy trading work and connect to an experienced trader. Now you can repeat his decisions and earn money together with a professional.
- Choosing a trader with a trading style close to him. From the whole set of traders, you can choose the only one, or several, which are as close as possible to your trading style. For example, you might choose a trader with a more angry style who can probobly make more of your profit, or a moderately risky trader.
- No need to waste time monitoring the market. The time that a person has is perhaps more valuable than any money. Money can be earned, but time can never be returned. Therefore, by copying traders’ transactions, you do not waste your time analyzing market conditions.
- Setting up the rules for automatic copying. Most of the services allow you to customize the rules for copying deals. You can select the copy ratio, specific tools, and other conditions.
- Diversification of copying. Along with setting up copying rules, as a rule, it is possible to copy several traders at the same time on one of your accounts. This will allow you to reduce the risk of trading a single trader. Carefully analyze the traders whose strategies you are going to repeat, or even better, divide the deposit into several at the same time.
How to choose a trader for copy trading
When choosing a trader, whose deals you will copy, the following parameters will help:
- the duration of the trading history, starting from 1 year;
- the number of subscribers in trading networks – few will subscribe to a bad trader;
- type and number of transactions: a reasonable number of small-volume transactions (for small amounts of money) is a good choice for a beginner;
Stability is more important than profitability! If the user has consistently shown a profit over the past few months, there is no reason to believe that this will change in the near future. Therefore, Forex copy trading with him can be productive and effective in the future. Stability indicators can be:
- At least 60% of all trader’s transactions must be profitable (the more, the better);
- Maximum drawdown (indicator of possible losses) 25% and below;
- Monthly income 10-30%.
A trader with such or similar indicators is good at risk management. A newcomer with little money will be comfortable making money with this strategy.
The recommended amount for effective copying (if specified) will help you choose the best trader for your budget. Let the system scale transactions by correlating the accounts of the copier and the copied one, some transactions are simply impossible without the presence of the required amounts on the trading account. If the amount is not indicated, contact the trader and get advice. As a last try, you can roughly tell the number of them by looking at the amounts and duration of the trader’s transactions, and the number of transactions in the provided trading history.
How to Choose a Quality Broker
Of course, every trader should learn more about the broker before starting a cryptocurrency exchange. It is necessary to cooperate only with the best copy trading platforms. Easy and useful indicators when choosing a broker are the time of existence on the market and reviews about it. But it would be much better to see a few more things:
- Legal. Is the company registered and where exactly? Does it have a license?
- Service. What toolbox is offered? Is support available and how can you contact it (phone, chat, e-mail, etc.)? Is the accuracy of following the operations of the manager high?
- A matter of convenience. From the companies that came up according to the above criteria, choose the one that offers a simple and convenient site interface and software settings, social components (chat, trade social network, a news feed, etc.). Does the platform accept crypto payments, etc.?
Best Copy Trading Platform
The number of copy trading platforms for social trading and investment is growing rapidly, and it is easy for a beginner to get lost among the descriptions of dozens of services. And you must choose the best copy trading platform worthy of your attention.
B2Broker offers clients a huge number of options. Brokers cooperating with the company get access to high-quality white label cryptocurrency exchange software. The service offers assistance in obtaining licenses, as well as a wide range of tools that are convenient for both the broker and the user. Thanks to this, the trader can use the copy trading MT4 platform (or MT5 version). This functionality allows you to act more efficiently and conclude profitable deals while minimizing risks. Learn more about how to start a crypto exchange Forex business as efficiently as possible with a B2Broker partner.