Copy trading, otherwise known as social trading or mirror trading, is the action of copying another trader and automatically duplicating his or her trades. You do not actually make the trades yourself, but rather copy what the professional trader is doing. This can be accomplished through platforms that link up traders, which enable them to share their strategy and results.
How Does Copy Trading Work?
1. Choose a platform. First, one has to register himself on a particular website, which allows the copying of his desired performance criteria. For the most popular choice, users opt for eToro, ZuluTrade, and Covesting, through which anyone can view the rankings of the best traders by certain performance criteria.
2. Select the Trader to Copy: At this point, one opens an account and selects the one whose strategy is to be copied. He goes through the trader's profile of his trading style, risk, and past performance. Most platforms come with detailed profiles which outline metrics such…
