Finding or creating your own trading techniques can be challenging. Some trading tactics are more profitable than others. If only you were aware of the most effective trading strategies and how to use them. In this article, we examine how having access to the top trading strategies via mirror trading might help you reach your goals.
The ground-breaking technique, referred known as “mirror trading,” enables you to link your trading account to a sophisticated system that automatically replicates the top algorithmic trading methods in any market, including forex, stocks and cryptocurrencies.
What is forex mirror trading?
Any trader can use the mirror trading technique to have their account automatically “mirror” the choices made by a pre-selected trading strategy.
Comparable to mimicking another person’s mannerisms when out on a date or in a business meeting except that you can create a portfolio of profitable transactions instead of developing a personal relationship.
By giving them access to tried-and-true strategies and tactics that seasoned traders have created and tested, mirror trading empowers inexperienced traders. Mirror trading is a subset of social trading as a result.
You can discover who is already at the top and attach your account to their trading tactics rather than competing with other traders to get there. For those of us who lack the time or patience to put in all that work, this is fantastic news.
How is mirror trading carried out?
Depending on the broker you choose, the specific steps to take will vary, but you’ll be relieved to learn that the mirror trading procedure is quite easy.
It entails funding your brokerage account with money, connecting it to one of the top trading techniques or traders, and then letting the algorithm run its course. There is no need to independently research any trade ideas or execute any trades.
Here is how it typically works:
1. Open an account on the best mirror trading platform that best suits your needs, deposit a little amount of money, and get started. Most platforms require a minimum deposit of $250 to get you started. Some forex mirror trading platforms provide free demo accounts so you can trade it out without making any financial commitment to see if it is suitable for your needs.
2. After your account has been activated, you can browse through the many trading approaches that you can copy. You should be able to see all of the most important statistics that you need to make a decision such as profit/loss, drawdown, win rate, average win vs loss, profit factor, duraction, instruments, etc.
3. Select the best-performing strategy, follow the instructions, and connect your account to the chosen trading algorithm. You can choose to follow and unfollow traders at any time.
Who is mirror trading for?
Have you ever desired to profit from the markets but were just intimidated by the myriad of available options and technical jargon? You’re not alone; according to studies, only 20% of day traders stick with it for more than two years and a large percentage of retail traders lose money.
Mirror trading serves as a simple answer because it not only enables inexperienced investors to get their feet wet, but it also benefits traders of all levels of experience. Pro traders with solid trading strategies can share them with others and make a little extra on top.
With this trading strategy, you can pick up knowledge from others and spend more time on the things that matter, like your loved ones, friends, and interests. In addition to saving you time, mirror trading enables you to diversify across several financial markets, reducing risk and increasing opportunity.
The ideal solution for you may be mirror trading if you want to:
- Copy trading strategies with a high rate of success (historically speaking)
- Eliminate the need for hours of study and research
- Try out different systems and see which tactics are effective
Is mirror trading forex profitable?
If you link your trading account to the appropriate trading tactics, mirror trading can be rewarding.
Additionally, because your trades will automatically execute when the relevant algorithmic rules are activated, you won’t ever miss any possible profit possibilities.
However, it’s crucial to remember that nothing is assured when you start choosing what color Lambo you are going to buy.
In actuality, mirror trading involves the same dangers as conventional trading, so if you’re not attentive, you might lose your money!
A trading technique does not guarantee that it will continue to work once you begin using it just because it has been lucrative for three consecutive months. Because all traders have draw-downs at some time, and prior performance is no guarantee of future success, you might not obtain the outcomes you were hoping for.
Mirror trading is straightforward and can be a successful endeavor if you choose carefully and stay on top of things. However, there are a few things that can aid in order to be successful:
- Observing risk management guidelines
- Emulating successful trading methods that have been around for a while
- Being realistic about the potential gains
- Varying among different marketplaces and trading systems
Successful traders establish a plan, adhere to it, and then maintain their focus. Losses are inevitable for traders, but they can be reduced by practicing risk management, such as avoiding putting more than 1% of your account at risk in a single trade and setting a limit on your overall loss.
Losses, as you probably already know, are a given in forex trading. The difference between those who are successful and those who lose everything is how we handle losses.
What are the benefits and drawbacks of manual trading versus mirror trading?
Trading beginners may gain from observing more seasoned traders – A trader who is new to the market might learn a lot from observing professionals and their accomplishments. Finding the greatest trading techniques is also useful for introducing a novice trader to an instrument they would not be familiar with otherwise and for helping them comprehend why the strategy works.
For the advantage of all traders, information can be shared. A trader with experience in a particular asset class may impart that knowledge to other traders. Those who choose to emulate them will greatly benefit from this since they will be able to make informed decisions based on the guidance of a knowledgeable and experienced person!
Mirror trading takes the emotions out of trading – Using an automatic trading system to mirror trade takes the pressure out of having to make big decisions. This not only improves your mental health but also ensures that your trading is free from any unfavorable feelings.
This type of trading may be more time-effective than others because it gives users access to an automated system that trades their accounts continuously around-the-clock. This implies that when you’re traveling to work or even just strolling down the street, your account will be trading!
Increase your potential by utilizing tested techniques. When it comes to trading, copying a tried-and-true approach is one way to possibly succeed. Avoid trying to innovate on your own.
There are many who make a living day-to-day trading, but the facts are in the numbers. In fact, according to a recent research from Brazil, 97% of day traders there lost money, indicating that the majority of people who try to trade the markets do so at their own peril. The only method to benefit from trading appears to be by replicating the small portion of traders that are successful.
Good traders may demand payment before allowing you to imitate their trades. This typically takes the shape of an annual membership fee or a commission paid as a percentage on any profitable trades executed via your account.
Additionally, the broker may charge their “master traders” lower spreads every deal. This could lead to the master trader making money while you lose money, in addition to increasing the price you pay for the same service.
This is a significant factor and may be a reason to stay away from day traders. In reality, following long-term, low frequency traders on larger time frames will lead to fewer trades being performed and ultimately lower brokerage costs.
The danger of dubious trading decisions being replicated – Your success is largely dependent on the algorithm’s decisions, which you precisely replicate. As a result, you must invest a lot of time in developing a plan that commits the fewest errors possible.
Can give the impression of security – Although copying effective tactics can result in substantial gains, nothing is guaranteed. This false sense of security that follows from thinking that nothing can go wrong leads people to make bad decisions like overinvesting.
It takes time to research more seasoned traders since even though you won’t be making any deals, you still need to locate the finest tactics to emulate. Due diligence and extensive investigation are required.
Many traders are unsure of how to modify their techniques as the market swings from one extreme state to another. Past performance is not necessarily indicative of future performance. During a market correction, a technique that was successful for them during an upswing may no longer be effective.
What distinguishes social trading from mirror trading?
Social trading enables seasoned traders to guide inexperienced investors in choosing the best investments. Social trading platforms let users connect and analyze one another’s trades from all around the world.
Setting a portion of your capital up to reflect an algorithmic trading strategy’s real-time actions is known as mirror trading. The system will automatically complete deals rather than awaiting your action.
By default, you are a social trader if you engage in mirror trading. It is possible to be a social trader, though, without engaging in mirror trades.
What distinguishes copy trading from mirror trading?
Both mirror trading and copy trading are considered forms of social trading, but they have a few minor differences.
In today’s copy trading approach, traders automatically duplicate the trades made by other, more seasoned investors.
In mirror trading, you mechanically copy deals, but instead of duplicating another person’s human decisions, you typically imitate automated trading systems and expert advisors (EAs).
How do you begin mirror trading?
It’s simple to create an account, and you can do it on your phone. Simply use a card or wire transfer to fund your brokerage account, then pick one of the several trading techniques to use that day.
The automated trading system follows each action taken by other investors without any additional input.
In order to have a successful and enjoyable experience you should consider the following:
- Start with a sum you’re willing to lose or risk.
- Pick a licensed broker that provides the services you require.
- Find the top-performing tactics that can be mirrored by using the search feature.
- You can choose to study how the trading strategy functions.
- When you’re ready, start a demo account mirror trade.
- If it works, you might want to start as low as you can and rise from there gradually.
You could increase your chances of being set up for success if you follow these suggestions. Choosing the right strategy is quite important, so be sure to look at the past results and keep an eye on how much money you’re committing to that particular approach at all times.
What qualities should a mirror trading platform have?
Choosing the best forex mirror trading platform might be challenging. However, this step is crucial because there are many terrible platforms available you will want to try and avoid.
A checklist can be helpful while seeking for the best mirror trading platform. The requirement that the platform be regulated in your jurisdiction is at the very top of this list. Several additional warning signs are included below:
Regulated: Some platforms are subject to government regulation and oversight, while others remain unchecked. For complete coverage, make sure the platform is governed in your country. Don’t do the same thing with your trading capital as you wouldn’t allow some unknown person to manage your bank account while you’re on vacation.
User-friendly: Mirror trading’s main goal is to make forex trading simpler. Some platforms, though, apparently missed the memo. The platform must be simple to use, otherwise you risk becoming annoyed and choosing the wrong course of action.
Real-time trader performance monitoring: You must keep a careful check on your traders’ performance. To avoid traders who have lately lost their mojo, this should not only be done frequently, but also in real-time.
Furthermore, traders with a longer history of performance are frequently more trustworthy than those with a shorter history.
Good reviews: Reading what other users have to say on reputable review sites like Google Reviews is one approach to identify the best platform. You can learn a lot about how satisfied users were with their interactions and whether or not they would suggest this platform to others.
Having said that, there has been an increase in bogus reviews as a result of rival attacks or clients blaming the broker for their failure. The Competition and Markets Authority actually claimed to have discovered “troubling evidence of a thriving marketplace for fake and misleading online reviews.”
Which mirror trading platforms are the best?
I have tried and tested many forex mirror trading platforms over the years. These I have listed here I think truly deserve to be on this list after a thorough and prolonged examination.
You no longer have to worry about which of these mirror trading platforms is best for your needs because I have extensively examined and assessed each one.
AvaTrade has been around since 2006 and offers a number of trading-related solutions. For automatic trading, you can utilize the MQL5 Signal Service or, if API Trading if that is more your thing. They also integrate with Duplitrade, which allows you to mirror trade quickly and easily.
AvaTrade is a business that uses cutting-edge financial and technological practices. They are governed by several of the most well-known regulatory bodies in the world, including those from Europe, South Africa, Japan, Australia, and the United Arab Emirates.
You have the option to trade on the currency markets from anywhere in the world thanks to AvaTrade. They provide a variety of trading alternatives, attractive spreads, and real-time streaming of market data. Both novice and experienced traders can use the platform because it offers a wide variety of trading platforms. MetaTrader 4, MetaTrader 5 and mobile trading apps are all options.
NAGA offers manual and automated trading solutions. The UI is straightforward and simple to use, yet it has a variety of complex features to make trading a delight. The sophisticated algorithm that identifies the most effective techniques for you to emulate is an example of this.
Retail investors can trade Forex, futures, options and cryptos with FP Markets, which offers a variety of services to assist them be successful in their trades (thanks to the MetaTrader suite).
This platform is not your standard, everyday broker. In order to guarantee that traders are getting the best possible deal on transactions, they offer a very competitive spread through their Raw ECN account.
You can track the trades of numerous providers at once with FP Markets, which is different from some other mirror trading platforms. This is helpful for individuals who want the most variety possible in their portfolios and do not want to restrict themselves to the products offered by a single provider.
In order to protect investors from loss and to ensure institutional-grade liquidity, the company provides a wide range of tools that can be utilized to help control risk.
eToro, which was established in 2006, is the pioneer in social trading. You will have several possibilities and be able to diversify yourself because there are over 1,000 instruments available to trade on.
eToro has developed a platform with social trading as the core feature, in contrast to other platforms that have mirror trading as a side function. This platform has gained a lot of traction when it first launched since traders can explore and communicate with one another easily because to the user-friendly interface.
More than just replicating transactions is what eToro does. You can connect with traders and investors who share your interests thanks to a number of social features. For instance, the platform’s “feeds” section is made to enable users to follow traders, exactly like they would on Twitter or Facebook.
ZuluTrade, which is based in Greece, provides copy trading services to its users all around the world, including those who live in the United States.
The free demo account Zulu is offering as part of its welcome package can be the gateway to trading you’ve been looking for. Try it out and you may use all of the features, including unlimited virtual money to practice your abilities.
You can always discover a trader on the site with a technique that works for you because it has over 10,000 different traders from all over the world!
ZuluTrade is available to US people, which will please them, but a concession must be made. Account holders might mirror trade one pair at a time, for instance. This is due to regulatory limitations in America that place a limit on the number of pairs that can be opened at once on an account.
The MQL Company is committed to offering trading terminals for digital currency and FX traders online. The MetaTrader platform is available from them, and you can use it on whatever market you choose!
MQL5 is cutting-edge trading software designed for customers with tight budgets in mind. Most traders use MetaTrader4 or MetaTrader5, but in order to mirror trade on either platform, you must have a subscription and pay a nominal charge.
How do you choose a trader or signal source when there are so many available? You can filter the signal providers by drawdown, average leverage used, monthly profit, and more more using their advanced search function. You can rely on the “Reliability” parameter, which combines numerous parameters to provide you with a reliability score, if this is too much work.
You can access more than 7,000 methods from the top traders and investors in the market with the free sample account. The drawback is that using MetaTrader to carry out your trading methods requires you to be online, unless of course you choose to use a forex VPS.
Mirror trading strategies
Act fast: You might want to take action if you notice that a trading technique is working well! It is essential to locate profitable techniques with a successful track record over the longest amount of time possible, even though replicating the popular strategies might be quite rewarding. Even if big/quick gains are alluring, it is best to be cautious of such transactions because they could be the result of an anomaly in an otherwise unpredictable and unproven trading approach.
Recognize when to stop: There will be some trades that will be more difficult than others. It’s critical to recognize when the trading technique isn’t performing as expected, even while you’re in an upswing. By establishing a predetermined drawdown level, you may streamline your strategy. By doing this, you can determine with objectivity when to stop trading.
Increase market variety: Without having to become an expert in every aspect of the market, mirror trading is a fantastic method to diversify your holdings. Utilize this by employing the most effective tactic in each unique market.
Keep a watch out for chages in strategies: Market fluctuations and changes are an inherent feature of trading. However, you should always be aware of strategy adjustments because failure to do so will make subsequent transactions less successful.
Keep a careful eye on the top traders and be flexible: It does not inherently make someone a “great trader” to only have a few huge successes. Finding traders that consistently produce over time is the key. They are superior to the one who occasionally “wins big” but is using dangerous money management such as a martingale strategy or grid trading.
Watch out for traders who suddenly change their behavior: Examples include tripling down on failing trades, hence it is best to unfollow these traders before things get out of hand.
Tips for mirror trading
You could be on the road to success if you put the suggestions from this article into practice. There are a few more things for us to consider before we begin:
- The equity curve must be considered before copying any trading approach or trader. This will give you a decent indication of their general trading record and demonstrate whether they have had any profitable deals in the past.
- In order to guard against a decline in one market or strategy, you could diversify your portfolio.
- Every day, new trading methods are released. Don’t adopt the newest trend when formulating your plan. Avoid using mirroring tactics with a limited track record.
- It’s crucial to resist having second thoughts about your strategy. Spending time on your research can prevent you from later second-guessing your decisions. You can learn more about these tactics and become a better trader if you take the time to comprehend what they entail. You will simultaneously be awarded for your work.
- Always start on a demo account to begin with and never risk more than you can afford to lose.
Conclusion: is forex mirror trading right for me?
In conclusion, mirror trading is a well-liked strategy for increasing market exposure for a variety of factors. Whether you are a novice or have some experience doesn’t matter. Any lifestyle or schedule can use this technique!
However, mirroring won’t help you get rich or fulfill all of your desires by turning your spare change into millions! The truth is that it has the same dangers as conventional trading.
Don’t start out by investing your personal money right away. On a practice account, begin by understanding and applying appropriate risk management strategies. No actual money will be on the line in this manner.
Personally, I do not think anything can beat taking time to learn how to trade forex manually by yourself. This way, you can learn from your mistakes and become a better trader in the long run without having to rely on anyone else.
Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.