Aside from the basic principle of copying another account’s trades, copy trading can vary significantly based on the setup used. Automatic copy trading with the use of a PAMM account enables exact copies of trades, down to the percentage allocation of each trade. By contrast, in an MAM setup, leverage and trade size allocation can be altered by trade copiers.

In manual copy trading, the strategy provider provides updates to clients by advising when to enter a trade and the exact position to take. Trade copiers then copy the trade if they would like to. This allows for maximum flexibility, but it can also result in performance diverging from that of the main account. Trade copiers are also exposed to risks from delays in copying their trades.

At Alchemy Markets, copy trading is done automatically once you have set up your account.

Many commercial trading platforms that cater to the retail market support copy trading for both strategy providers and copy trading investors, including MT5. You can also participate in copy trading through external tools provided by your broker. The Alchemy Markets’ Copy Trading solution uses Social Trader Tools, a cloud-hosted and scalable platform built for Forex copy trading without the need for the use of a VPS or additional plugins. To get started, all you need to do is set up an Alchemy Markets trading account and log into the Social Trader Tools portal. Once you have configured your risk settings, you can automatically copy trades from one account to multiple others.

Copy trading is most commonly used in the forex market for various reasons. The massive liquidity available means trades are less likely to move the market, and it is therefore possible for large numbers of traders to copy a single trade at the same price. Forex trade copiers can also benefit from rapid trade execution on well-established platforms.

How profitable your copy trading is for you and your clients depends on a variety of factors. If your master account (the account run by you, the strategy provider) is profitable, and your copy trader replicates their trades accurately, they should see the same profit levels.

Yes! Forex is the most common asset class for copy trading due to its liquidity and popularity with retail investors. At Alchemy Markets, we offer 125 Forex pairs with tight spreads and institutional liquidity and execution for retail traders. With our automatic Forex copy trading solution, trade copiers can benefit from an average replication speed of 50ms, the fastest on the market.

When you open an account with us and set up Forex copy trading, you will gain access to a real-time leaderboard of strategy providers to copy. Most Forex trade copiers look at the trader’s maximum drawdowns (the greatest loss compared to the start value), percentage of winning trades, number of followers, and AUM (assets under management). Depending on your goals, you may also want to find a trader that offers Forex copy trading strategies that fit in with your portfolio, with the right balance of diversification.

The best Forex copy trading system for you depends on your investment goals and risk appetite. There can be thousands of strategy providers on a single copy trading platform. If you are a Forex trade copier, you should understand your risk parameters and do your research before following one.