Since it first appeared in 2005, copy trade has enjoyed tremendous popularity as more and more retail traders started copy trading on one of the many platform offers in the financial services industry.
Copy trade works by offering a simplified way for beginners without trading experience to invest in the financial markets. Their lack of knowledge is one of the main reasons beginner traders lose money. Copy trading is a simple way for beginners to start their trading journey.
The only research copy traders need to do is decide which strategies to follow. This simplicity is one of the main reasons behind its rising popularity.
Particularly popular among less experienced traders, copy trade is one of the features new clients actively look for when researching a new broker. Love it or hate it, as an operator, you need to offer copy trading to attract new deposits and retain existing clients.
The strategy works by duplicating trades from experienced top traders into connected trading accounts. Then, when that professional trader opens a new position, the same position is automatically opened in the connected trading accounts.
The connected accounts can customize their trading using several platform variables. For example, traders can set their trade volumes, risk settings such as stop loss, and percentage allocation. All these settings are available inside the copy trade platform.
The process is user-friendly, intuitive, easy to set up, and can yield good results, which has increased the practice’s popularity.
The image below is a simplified representation of the whole process:
The experienced trader provides the trading strategy or actual trades. The copy traders must use these trades in their trading accounts with the corresponding trade variables discussed above.
One offshoot of copy trading is Mirror Trading. Mirror trading involves copying an entire strategy instead of individual trades. Mirror trading can lead to a more diversified trading portfolio as the strategies involve more than one symbol or instrument class.
Social Trading is another variation of the idea behind copy trade. Rather than following specific traders or strategy providers, social trading concentrates on sharing ideas and strategies within a community of traders.
While highly popular, social trading isn’t an automated process. Instead, social trading platforms allow exchanging of ideas and knowledge. Still, traders must open all their positions manually, while in copy trade, the process is automatic and happens in real-time.
One other subset is Trading Signals. Trading Signals have gained significant traction over the last few years as more and more providers appeared, including notable names from the world of Fundamental and Technical Analysis. Signals work slightly differently and concentrate on direction, key resistance, and support levels. The idea, however, is similar to copy trade.
We’ve already touched on the choice of copy trading platforms available to you as a broker. Several options are open to you, but it’s essential to know the key features your potential clients will be looking for to make the best choice of platform.
Simple and User-Friendly Copy Trade
Copy trade is aimed mainly at less experienced traders, so the interface and functionality must be correspondingly straightforward. Therefore, traders signing up for your copy trading platform will look for an intuitive interface with simple, user-friendly options.
Copy trade platforms present complicated ideas and strategies in simple-to-understand segments. While your users should, of course, have access to advanced features, these need to be simple to access and use.
Of course, we might be accused of being biased, but our Copy Trade module wraps some very advanced features into a highly user-friendly interface. The module integrates natively with your existing MT4 or MT5 platform and offers multiple allocation methods, including equity, balance, and lot-based rules. Your clients can allocate the minimum amount they’re most comfortable with to any specific trade.
These features and intelligent automation make for a powerful copy trade system with a simplified client area: no steep learning curves or complex functionality. Everything is within reach of even the most inexperienced trader.
Your clients will love the features and ease of use. That means more trade volume for your brokerage and increased revenues!
Secure Copy Trade Platform
One of the main concerns for brokers today has to be the security of their systems and the privacy of their client data. Data theft is a severe threat to any business but is particularly dangerous for brokers. Don’t forget that your KYC procedures involve collecting ID and Address documents from all your clients. That makes your data an attractive target for hackers.
Security isn’t just about complicated passwords and SSL certificates. The basis of your platform security comes from its foundations. Strong foundations make for secure systems.
We develop all our products on Azure, the highly secure cloud environment from Microsoft. We’ve been a Silver Microsoft Partner since 2013 and a Gold Partner since 2017. We developed our copy trade module on this secure platform and integrate this directly with your MT4 or MT5 platform.
This direct integration means running multiple servers, and White Labels is straightforward while triggering virtually limitless trade volumes. Our clients asked the questions, and we provided the solutions!
More and more retail traders look for trading signals from their brokers, so we included this functionality in our copy trade module. The PLUGIT copy trade module is an ideal solution for Brokers, Money Managers, and Signal Providers looking to add signals to their list of services.
All the parameters can be configured and customized from within the module. For example, the interface includes commissions, limits, fee settlement (manual or automatic), allocation methods, volume, and direction.
The flexibility of the Microsoft Azure infrastructure means you can offer your trading signals in real-time across multiple trade servers and white labels. In addition, we design all our modules to scale as your operations grow. We don’t believe in limits. With PLUGIT, the only limit is your imagination!
MAM accounts or Multi-Account Management accounts allow money managers to trade client accounts with compensation from a performance fee.
Money managers trade on a master account with trades copied to connected to client accounts depending on the allocation method used for that particular account.
Money managers tend to attract higher net-worth individuals, able to commit higher amounts to their trading. Onboarding these individuals is significantly faster than with other retail clients, as they will already have an existing relationship with the money manager.
The PLUGIT copy trading module allows you to offer MAM accounts to qualifying money managers, opening up a significant avenue for additional revenues. In addition, your connected money managers can choose to add client trades to their A-Book or B-Book while connecting directly to your MT4 or MT5 platforms.
Adding copy trading to your range of services is tried and tested way to increase your revenues. Copy trading used to be a niche product. That has changed drastically, and the sheer number of brokers offering this feature to their clients is proof of that.
Offering value-added services like copy trading make for more straightforward and cheaper client acquisition. However, client acquisition costs have been rising for the last few years, with more and more active brokers raising competition and marketing costs. Therefore, anything that can help to increase conversion rates and FTDs is hugely beneficial, and copy trading is one of those products.
Apart from increased conversion rates and FTDs, adding copy trading to your broker offering will also help with client retention. Copy trading tends to involve higher volume since clients feel more confident in their activities and trading decisions, which leads to more significant positions and trade volumes.
Forex is a highly competitive industry. While brokers can have multiple platforms to choose from, the most popular choices are MetaTrader 4 and Metatrader 5. Both platforms have a well-deserved reputation for being robust, user-friendly, fast, and feature-rich. That does, however, mean many broker offers can appear very similar, if not identical, to prospective new clients.
What sets one MT4 broker apart from another MT4 broker? While there are, of course, many features that can vary from broker to broker. However, these might not be immediately apparent to a beginner trader looking for a new broker.
For example, it’s challenging to sell low spreads to someone who doesn’t understand the concept of spread in the first place! This is where value-added products such as copy trading come into play. It would be best if you offered a diverse trading environment to attract clients and deposits.
The PLUGIT Copy Trading module offers your brokerage precisely that. A diversified trading environment. Features like copy trading aren’t optional extras anymore. As more and more clients actively look for features like this, it becomes essential that your brokerage supports them.
We’ve been developing add-ons and platform plugins for over a decade now, and we know what adds value to a broker and what doesn’t. Copy trading is one of those platform add-ons you need to offer.
One of the features of our copy trading module we’re most proud of isn’t something you’ll find in the user manual. At PLUGIT, we take customer service seriously, and like all our other products, copy trader comes with our industry-best customer service. Most of our clients have been with us for multiple years, a testament not only to the quality of our products but also to our attitude to customer service.
Our copy trading module is part of the multi-award-winning YOONIT suite. Comprising five separate modules, YOONIT lies at the heart of over one hundred of the leading brokers in the world.
We’d love to show you the power behind the YOONIT name, so why not take advantage of our no-obligation demo offer? Contact us today, and one of our team will show you what YOONIT can do for your business.