The prevalence of online brokers and the reliance on technology to execute market orders and manage investments opened the door for more new investors. Accordingly, brokerage firms have been offering advanced trading techniques that offer faster time-to-market and allow beginners to trade like pros.

Copy trading is one of these tactics, which bridges the gap between newbie and experienced market participants, ensuring fair market opportunity distribution among all investors.

Adding this function to your brokerage firm can significantly boost your operations, landing more customers and investors on your platform. Here’s how you can start.

First Things First: What is Copy Trading

Copy trading means creating a trading system that looks similar to a professional trader’s investment portfolio, including financial instruments, markets, technical tools and order types.

Using tested and proven strategies, this approach makes it more feasible for beginners to place market orders at higher success rates. Moreover, this allows new investors to learn by doing and following the most common trading techniques.

With that being said, adding a copy trading tool to your brokerage platform will enable you to attract more investors, professionals and newbies.

Challenges and Drawbacks

Despite the straightforward approach of this trading system, it has various pros. Here are some pros and cons of copy trading.

Advantages

• Faster access to financial markets for new investors.
• Providing an easier way to understand how markets work through learning by doing.
• The ability to choose and copy a trading strategy that aligns with the trader’s risk tolerance and interest.

Disadvantages

• Relying on copying styles without actual learning can hinder the trader’s learning process.
• Mal-programmed copying systems can lead to malfunctions and expose investors to additional risks.

Top 3 Copy Trading Providers

Copy trading systems are developed by technology providers that facilitate integration points to facilitate the copying of various investment strategies that suit different users.

B2COPY

B2COPY is an advanced copy trading platform that integrates social trading, PAMM, and MAM accounts in cTrader and MetaTrader.

B2COPY comes with CRM integrations and customised payment methods. Moreover, it offers custom trade copying systems that allow investors to fine-tune their risk factor, lot size and other metrics.

eToro 

eToro is a famous CFD brokerage and crypto exchange platform. It offers a convenient copy trading tool that serves B2B and B2C purposes. eToro copy trading encompasses thousands of financial assets and markets. Being highly regulated and recognised by top-notch financial regulators makes eToro a reliable social/copy trading solution.

AvaTrade

AvaTrade offers a wide range of tradeable securities across cryptocurrencies, stocks, bonds, ETFs, indices, commodities and Forex pairs using the most advanced trading technologies and tools.

AvaTrade’s copy trading offers a powerful risk management tool and live market feeds, allowing traders to adjust and execute strategies on time.

Conclusion

Copy trading is highly demanded by investors and brokers. Traders use this system to automate their investment activities and multiply their projected returns. On the other hand, brokerage firms integrate a copy trading solution to attract more investors and offer much-needed trading technologies.

Last Updated on August 14, 2024 by Icy Tales Team