Why Copy Trade with Broker Aron Groups?

What is Copy Trading?

Copy trading allows traders to copy the positions of seasoned professionals in the market. The traders being copied are usually referred to as “signal providers” or “strategy providers”. In today’s markets, such as forex, the copying happens instantly and completely automatically with the help of brokers.

The signal providers usually benefit from others copying their trades. One significant benefit is the commision they receive from the copy trading platform. Different platforms usually offer various commissions to sweeten the deal for the copy trader. Traders usually choose their signal providers based on their experience in trading and more importantly, profiting.

Copy trading platforms usually copy the signal provider’s trades instantly but adjust it to the trader’s investment capital. This is known as proportional copying or proportionate allocation.

Traders can make specific adjustments to the copying process. For example, they can define a specific threshold for the maximum allowable loss they’re willing to accept. This is known as Stop Loss (SL) or Maximum Drawdown. There are also other parameters such as Margin Levels and Percentage Loss which can be used to determine when the copy trading platform should stop copying the signal provider.

Benefits of Copy Trading

Copy trading has become an increasingly popular strategy in the forex market and for good reason. Here are some of the benefits traders can reap from copy trading.

Access to Expertise

Copy trading allows traders to watch professionals do their work in real-time. Just as a student watches a master work, new-comer traders can learn what sets the professionals apart from the rest. But observing and analyzing the trades of these professionals isn’t just for new-comers. Many seasoned investors check out what others are doing because there’s always something new to learn in the forex market.

Diversification

One great benefit of copy trading is that traders don’t need to copy one specific investor. Instead they can allocate various amounts of capital to copying each signal provider. This way, traders can reduce risks by not putting all their eggs in one basket. Traders who want to learn the ropes can use copy trading to study different signal providers simultaneously. Copy trading allows traders to analyze a variety of trading styles and strategies.

Time Efficiency

The forex market can be profitable for everyone, even those who don’t have the time to learn the intricate systems of trading in detail. Copy trading grants traders the opportunity to profit while not putting in time to study the market. All traders need to do is pick out the right signal providers and let them execute the trades.

Potential for Profitability

The forex market can be risky, especially for new-comers. Those who have a lot to lose will benefit from following in the footsteps of successful traders. An MIT-funded study in 2012 showed that those who copy-traded fared 6-10% better than traders who were trading manually. Another 2014 study showed that copy trading was more likely to produce a positive return compared to standard trading. However, profitable copy trades have lower return of investment compared to successful regular trades.