What is Forex copy trading? Why is it popular in Dubai, UAE?
As the name suggests, Forex Copy trading allows you to copy the positions taken by another trader directly. You decide the amount you want to invest and simply copy all trades they do automatically in your account in real-time. When the trader you are copying makes a trade, the same deal appears in your account at a predefined ratio. This is why Forex Copy Trading is popular among Forex traders in Dubai, UAE.
You do not have to trade manually in your account anymore, and you get similar returns on each trade as the trader you are following.
Forex Copy trading is one of the easiest ways to benefit from an expert trader’s knowledge. It does not mean that you lose all control on your account, you can still close trades and open new ones if you want. But interfering with the trades while following an expert is not recommended.
Anybody can copy another expert trader and can potentially make money based on the expert trader’s skills.
In fact, Forex Copy Trading doesn’t require advanced knowledge of the financial market and helps people with less or no knowledge of Forex take advantage of Forex trading in the expert’s way.
Evolution of Forex copy trading
The history of Forex copy trading goes back to 2005 when traders find the need for copying trades that were placed by professionals after thorough analysis using advanced algorithms. Forex Brokers recognized the potential of having systems where a trader can copy other’s trading account automatically. There is no need to monitor email signals, SMS signals, or trading ‘chat’ rooms continuously to follow the expert’s or the mentor’s trades.
Out of this idea were some platforms like Etoro and Zulutrade that came up, who allowed expert traders to connect their trading accounts to eToro or ZuluTrade copy trading platform. The traders no longer had to share their proprietary trading algorithms; they can only submit their trades automatically. Forex copy trading has become popular after that as it helps inexperienced traders to trade effectively and increase their potential profit.
According to one of a recent survey on Forex Copy Trading –
- 33% traders say a traditional Forex trading approach is over-complicated and can be simplified by automatic Forex Copy Trading.
- 1 in 4 new investors said that they were considering Forex Copy Trading or Social trading last year.
- Social trading platforms has the potential to grow to $40bn in 2020 (annual growth of 95%) and $70bn by 2025 (an annual growth of 45%).
Best Copy Trading Brokers in Dubai, United Arab Emirates 2020
- Excellent collection of traders
- The stringent ranking system for traders
- You get the best traders to follow
- Built-in risk management tools
- No profit-sharing – fees adjusted in spread
- Select your own Forex broker
- Follow as many as traders you like
- FXTM Invest allows copy trading
- In house Copy trading and ranking system
- Low-performance fees
- Start Copy Trading with $100
- Best selection of strategy managers
- Negative balance protection
- Regulated in multiple jurisdictions
- Recommended for Forex Copy Trading in UAE
Forex Copy Trading platforms
Most of the Copy trading platforms have the option of copy trading with different levels of customization. Some of the platforms offer advanced control over Stop-Loss and settings to allow following multiple traders in one account with different lot sizes. Some platforms have a simple interface just to follow only one strategy provider with a specific lot size. Depending on the way of working, Copy Trading can be – fully automatic and manual.
Manual copy trading is most similar to ‘normal’ trading where the trader decides whom to follow, which trades to copy and place the trade. They get the trading signal through the Facebook group, or email, or SMS or from telegram message. Several traders like this approach of copy trading. Automatic Forex copy trading is the full package, where you choose the traders and strategies to follow that has the best performance over several months. All trades from the selected strategy provider gets replicated in your account automatically.
FXTM Invest is the industry’s leading FX Copy trading feature that is available to FXTM traders. You can also have MT4 and MT5 platform on your PC, MAC, or mobile and trade at your convenience. The advanced technology of MetaTrader 4, combined with FXTM’s unique trading features, offers a high-quality trading experience to the traders. Check out FXTM Review.
FXTM Invest has the finest collection of Strategy Managers and the traders following them have made decent profits. You can start Copy Trading in FXTM Invest with a deposit of just $100, however an amount of minimum $1000 is recommended.
How to start Forex Copy Trading in Dubai, UAE with FXTM Invest?
How does Forex copy trading work?
Forex Copy trading in UAE has made automated trading easy. The traders now have access to a few highly advanced Forex Copy Trading providers in Dubai, United Arab Emirates. Here’s a simple step-by-step guide:
- Select a strategy provider that best matches your requirements. You can use the tools provided by the platform to filter the available strategy traders. Determine what is important to you, based on that filter the expert traders or strategy providers by the number of followers, risk level, profitability, the total amount of money they manage, or their ROI. You can choose any combination of these filters to find out the best Strategy provider to follow. In essence, it’s entirely up to you to select the right strategy provider or Expert trader.
- Finalize your investment amount, and how to distribute it if you are selecting multiple strategy managers. Be balanced while selecting traders to follow, and don’t put all your eggs in one basket.
- The Forex copy trading platform will automatically copy all the selected Expert trader’s positions into your trading account.
- Add more funds if you like for a trader who is performing better. Or, reduce your exposure to one particular trader whose performance is not excellent. Always keep your portfolio diversified by not investing all your investment with a single trader. You can replace your strategy providers at any time you want. Just keep in mind that you need a separate account for each trader you decide to follow with most of the copy trading platform provider, except ZuluTrade. With ZuluTrade, you can follow multiple strategy providers in a single account and define how to follow each provider, and determine lot size and risk level for each provider.
- There are no additional fees charged by the broker while using the copy trading feature. You have to pay the Strategy Manager when they make a profit for you. The brokerage fees that apply to any regular trading account will apply to copy trading accounts too.
What markets are better for Forex copy trading?
The copy trading platform offers you access to markets, which include: Forex, indices, stocks, and Commodities.
If you want to trade in the Forex market but are short of time, then Forex copy trading allows you to start trading without having to learn advanced trading skills. Learning the right trading skills can be very time-consuming and challenging.
You can find out strategy providers who specialize in stocks, Forex, and commodities by using the filter option by looking at their strategy descriptions.
The advantages and disadvantages of Forex copy trading in UAE?
There are several advantages of Forex copy trading, which are the reason for being so popular.
What is the responsibility of a copy trader? The most important work of the Copy Trader is to find traders that have a consistently successful track record and trading style that you want to follow.
Or you can distribute your risk in your portfolio, which will enable you to diversify and be on a safer side to face the ups and downs in markets, and stay profitable over the long-term.
The Forex copy trading offers an exciting and easy approach to Forex trading. The advances in social trading and technology have made Social trading or Forex copy trading freely available to many traders.
Upgrade your own trading knowledge while following and making money.
Forex copy trading allows traders to follow the trading activity of experienced traders. These experienced traders have years of expertise, experience, and consistently making money. You can learn from them by watching and replicating their trades and slowly developing your own trading skills.
There are a large number of platforms and a huge variety of trade strategies on offer. You can allocate your portfolio to different providers and adopt a different trading strategy. By spreading your portfolio among several professional traders, you can offset losses if one trader performs badly. You can also potentially make money in different types of market conditions.
Trade in the sector you like
Do you want some exposure Oil trading as Saudi Arabia is in the news that can affect oil prices? Do you want to take advantage of the intraday price moves of EURUSD during Jerome Powell’s press conference? You can decide and get whatever exposure you want, on your terms by tapping into a wealth of global expertise.
Free time to spend with family and friends
You can invest in the market and have the strategy manager you have chosen continuously monitoring them and trading. This means you can spend quality time with your family and on your other hobbies!
Risks of Copy trading
Nobody can ever eliminate the risks involved in Forex trading. You must know and be aware while using Forex copy trading – you are taking part in the Forex market along with the risks that come along. Forex Trading by its nature is a high risk, high reward financial instrument.
Strategy providers’ histories
Finding a reliable long-term expert trader to copy can be difficult. You must do your own homework while selecting the traders, and make sure that you understand your chosen traders. Sometimes, the results can be misleading in the short term. It is better to follow a consistently performing low-profit trader having a track record of more than a year, than a highly profitable trader with just a few months of record. If a trader is giving too high return, it is likely to have a high drawdown also.
Trade Execution risk
Similar to any financial trading, there is a risk due to the liquidity of the asset. Your trades may not execute at the same price as the trader you are following. The spreads involved may be different. These conditions affect the profitability of your account.
Many traders fail while trading Forex in UAE due to a lack of experience and knowledge. It is not easy to master the Forex market just in a few days or months. You can’t just rely on some Indicator or Auto-Trading system as they always fail to perform in real-time.
Here comes the requirement of the Forex Account management feature. Managed Forex trading can be achieved through Forex Copy Trading and Managed Forex Accounts. Both of these systems help you manage your trading activity through a professional trader who has a proven track record and has consistent, safe, and profitable trading for several months. Your chances of success in the Forex market is higher while you are following high rated Forex Copy Trading and Forex Account Management service.