What is Copy Trading?

Often used by new investors to replicate the success of more experienced traders, copy trading is exactly what it sounds like – a system that allows traders to join a network of other traders, pick the traders they like, and copy the trades that they make.

For the less-experienced trader, the trading journey can be extremely daunting. There are pitfalls around every corner and an endless amount of information to digest. Copy trading allows them to take advantage of the experience and skills of other traders by following their trades. 

In return, those whose trades are being copied – also known as signal providers – usually charge their followers either a subscription fee and/or draw a commission from followers’ profits and spreads.

Copy trading has also given rise to a new kind of investor portfolio: the signal portfolio. Instead of having their funds in assets or instruments, one’s money is placed with other investors. For example, if a copy trader wants to diversify among different asset classes, they would split their funds among a signal provider that trades forex, a signal provider that trades indices, and one that trades commodities etcetera – instead of directly investing in said assets. 

What can be done in copy trading?

While all copy trading platforms will allow users to follow and automatically copy trades, some, like PU Social, will provide users with added flexibility and functions. These can include the following:

Auto Copy

Copy the trades made by an experienced trader, but only risk the capital you want to. The size of your trades can be made as a percentage of your equity – meaning that if your chosen signal has equity 10x larger than yours, your trade size will be 10x smaller than theirs’.

Inverse Copy

This function lets you bet against a trader by making trades opposite from them.

Discover the Best

Signal providers are tracked and ranked based on their performance. Information like their trade history, all-time returns, and max drawdown are public information, so traders can pick based on their own risk appetite and trading personality. 

Risks vs Benefits

Benefits

Start trading with little or no experience in the financial markets

Take advantage of the skills and experience of others

Learn from other traders and develop your own strategy

Copied trades are more likely to yield returns compared to standard trades for the average trader

Risks

Market risks, which also apply to standard trading

High-performing signals: Past results are not a guarantee of future returns

Automatic copying might result in higher liquidity risks

Insufficient funds might result in a copied strategy not being properly executed

Ready to start copy trading with PU Prime? Download PU Social today and start copying!

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Step into the world of trading with confidence today. Open a free PU Prime live trading account now to experience real-time market action, or refine your strategies risk-free with our demo account.

Disclaimer

This content is for educational and informational purposes only and should not be considered investment advice, a personal recommendation, or an offer to buy or sell any financial instruments.

This material has been prepared without considering any individual investment objectives, financial situations. Any references to past performance of a financial instrument, index, or investment product are not indicative of future results.

PU Prime makes no representation as to the accuracy or completeness of this content (except newsroom articles and Trading Hours Changes messages) and accepts no liability for any loss or damage arising from reliance on the information provided. Trading involves risk, and you should carefully consider your investment objectives and risk tolerance before making any trading decisions. Never invest more than you can afford to lose.