Copy Trading
Copy trading mirrors another trader's positions automatically - a way to outsource execution while keeping your own account.
Copy trading mirrors another trader's positions into your account automatically. The result depends on the trader you copy, and their losses hit your account just like your own.
Copy trading automatically mirrors the trades of a selected trader into your own account, in proportion to your balance. It is offered by many brokers as a built-in feature and by platforms like eToro as their core product. The quality of the strategy depends entirely on the trader you copy: their track record, risk management and drawdown history. Past performance is no guarantee, and copied losses hit your account the same way as your own.
How It Works
- You allocate a portion of your account to a signal provider
- Their trades are copied in proportion to your allocation
- Platforms show track records, drawdown and risk scores
Trading Tips
Judge providers on drawdown and consistency, not just headline returns
Check whether the provider trades the same instrument sizes you can afford
A copied loss is a real loss - size allocations like any other position
Copy Trading Example
Say you allocate $1,000 to copy a trader with two years of steady 3% monthly gains and a 15% max drawdown. Your account mirrors each position proportionally, so their 2% risk per trade becomes your $20 risk, until you stop the copy.
How Traders Use Copy Trading
Audit the trader like an investment: maximum drawdown, months active, and whether size explodes after losses. Cap the allocation small, set your own stop on the copy, and never copy a track record younger than a full market cycle.
Related Terms
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