So what is copy trading exactly? The best way to describe it would be as a kind of portfolio management. The idea is to give your clients a collection of trading strategies they can evaluate and copy into their accounts.
Experienced traders provide the trading strategies offered in your program. Clients can browse the results these experienced traders are getting and choose to copy the best trades to their broker accounts.
Copy trading is a valuable starting point for less-experienced traders and traders who don’t have much free time to devote to their trading activity. While it is a form of automated trading, clients can choose which traders to copy and how so much broader personal choice is involved.
The process usually focuses on short-term trades such as day trading. However, retail traders have also successfully used the method as a longer-term investment strategy for trading forex.
Offering a copy trading platform is a proven way to attract more clients to your brokerage. As a result, copy trading is growing in popularity, and more and more retail clients are actively looking for brokers offering this feature.
How to copy trade
There are various ways to copy trade, but the most popular method uses a rating system to grade the strategies with ratings for the results. These could be live and historical data, the track record of a specific strategy provider, profitability, maximum risk, and trade amounts.
Traders can choose to mirror the strategies completely or make changes to them. These changes can be take profit and stop loss levels, for example, risk management or the percentage of funds allocated to a strategy.
All a trader needs to do is choose which strategies to follow and copy these to their trading accounts.
What are the benefits of copy trading?
As an operator, copy trading has some significant benefits to your operations, such as:
- Better client acquisition
- Better client retention
- Higher trader volume
- Increased brokerage commissions
Your clients will expect to have access to copy trading. With the rise of social media, it was only a matter of time before the “follow” phenomenon made its way into online trading. Successful traders are sure to have a social media following, so being able to copy their trades automatically is an attractive option for broker clients.
Copy trading is a feature that many clients expect to see from their brokers. If you don’t offer this, you may see a decrease in the number of clients you attract.
The Plugitapps Signals Module is the ideal solution for brokers offering CFD trading, looking to include copy trading in their offer, making it more attractive to potential clients.
The module connects to trading servers via an MT4 & MT5 plugin and offers web-based management for money managers, signal providers, and investors.
It also includes advanced features for multi-account management, a high level of customization with configuration options, flexible performance fee executions, and the option to create unlimited trading strategies with a range of fund allocation methods.
In addition, you can enable the built-in copy trading feature, a proven method to increase trader deposits and volume.
Different trade allocation methods give money managers a remarkable degree of flexibility when creating strategies for traders to copy. These allocation methods include:
- Actual value
- Equity percentage
If you want to see what the Plugit Signals Module can do for your brokerage, get in touch with us today for a no-obligation demo. We’ll be happy to walk you through our product line.