Copy trading is one of the many investment methodologies that are more innovative and less crude. In copy trading, the investor has the option to copy every operation that has been operated by another trader of choice. The process is completely automated with the purpose that the performance of the trader whose executions are being copied will reflect in the investor’s account. Here the funds of the investors do not go to the fund manager which in many cases is another trader. the investor begins with the opening of a trader’s account. This account is then linked to the other traders account through a copy trading platform. This ensures that the finds at al time remains with the investor and are never handed to a third party.
What are the important components of copy trading?
There several services offered on these platforms and each service has different versions with their good points and bad points. However, the basic components of copy trading remain the same in any case:
- market: as a financial realm the structure has its market. The biggest market in this case where copy trading grew and was nurtured in the forex market. Later, with the introduction of CFDs every other market joined in the gameplay such as the stock, indices, bitcoin, commodities and many more.
- the broker: broker is the second fundamental part and a trader’s best bet at profits if it is a competitive one. It is almost impossible to become a trader without a broker. In copy trading, the broker receives a trading account of the individual in which all the operating signals of the trader are received.
- trader: the signal provided whose execution is being copied.
- the investor: the individual who copies the account and makes the trade. A copy can be a very flexible way around many other investment schemes.
What to know more about copy trading?
Awareness and up to date knowledge never get wasted when it comes forex trading and another form such as copy trading. To keep up with the times and to now figure out what’s the best platform that suits your trading requirements visit the bus forex website. They have in-depth information on all sorts of activities involved with forex trading and even have their forums where one can learn more and share their own experiences.