A look at copy trading
Copy-trading is a popular way of investing funds, which implies the procedure of copying orders performed by the more experienced traders to your trading account. Today we'll review a popular platform for copy-trading CopyFX designed and supported by RoboForex.
What does the CopyFX platform offer?
The procedure of copy-trading is a cooperation of two parties, a trader and an investor. A trader opens a trading account in the CopyFX system, performs trading operations through the platform, and demonstrates some certain results. An investor, in their turn, uses the rating of traders to assess their statistics and trading results in order to make a decision about copying orders of a trader (or several) that they find interesting.
This cooperation is mutually beneficial. CopyFX is a platform for traders, where a successful trader, who can trade with a stable profit, can increase their profit by attracting investors. CopyFX is also a platform for investors, where they have the opportunity to choose the most successful traders from the rating and also receive profit from trading on the Forex market, while paying traders they are subscribed to some part of this profit as a commission for copying.
How to use CopyFX
A trader uses MetaTrader 4, a terminal that is familiar to everybody in the world of trading. They can create several accounts and use different strategies. An investor can copy orders to any of their MT4-based accounts, excluding trader and affiliate accounts. An order is copied to an investor's accounts at the same it is performed by a trader. There are no fees and charges for using CopyFX.
To help investors assess the results of traders' operations and make the most suitable choice to subscribe to, the company has created a special tool called the Rating. The Rating displays traders' statistics online:
- Profitability
- Account opened, days
- Maximum drawdown
- Balance
- Number of subscribers (investors)
- Number of orders (trades)
Every trader has their own participant card, which contains complete information on their active trading accounts, including the history of orders (trades) and subscriptions.
Risk management in CopyFX
Participants of the system have access to a tool called Investor's Calculator, which can be used to create a balanced portfolio of subscriptions to several different traders. Traders are ranked by profitability and divided into three groups: low, medium, and high risks. After specifying the sum to be invested and the investment period, as well as the distribution of risks between three groups, you will see a predicted result of your investments based on the current statistics exclusive of traders' commission.
Types of copying and commissions
The CopyFX platform offers five modes of copying orders (trades):
- A test mode allows to copy traders' orders with the same minimum lot and offers the opportunity to test their trading strategies with minimum risks.
- A flexible mode provides the opportunity to copy traders' orders within a specified percentage range from 10% to 90%. It's very convenient if an investor has less money than a trader.
- In a Standard mode, your copied volume of orders is the same as the trader's. It's a good choice if deposits of a trader and an investor are equal.
- A risky mode helps you to copy traders' orders with an increased volume. This mode is used when an investor has much more funds than a trader.
- A proportional mode allows to copy traders' orders with the volume, which is automatically defined by the system based on the ratio between funds owned by an investor and a trader.
Traders receive a commission for their trading results in three different ways:
- A trader on profit receives a percentage of an investor's profit.
- A trader on commission receives a commission for each profitable order.
- A trader without commission receives no commission for their orders being copied. This method provides allows beginner traders to demonstrate their results and attract investors.
Trader's affiliate program
The CopyFX has a trader's affiliate program. A Trader has the opportunity to set affiliate commission conditions for their trading account in order to attract more investors. Anyone who wants can become an affiliate and attract new investors, thus increasing a trader's profit and receiving commission for that.
Closing thoughts
CopyFX is a convenient service that offers successful traders the opportunity to receive extra income from their subscribers (investors). Investors can choose the most successful and stable traders from the rating so that they could receive profit by copying orders to their trading accounts. More detailed information about how the system works can be found on the CopyFX official website or the RoboForex blog.
This article was submitted by Dmitriy Gurkovskiy, Financial Expert and Author at RoboForex Blog
