The Best Copy Trading Platform in 2024

eToro has emerged as the pioneer in popularizing copy trading, establishing itself as the industry leader with the largest network of traders.

The platform stands out with its advanced functionality and intuitive design. It provides a wide range of filters and criteria that allow users to find traders based on their desired risk profile, past performance, and trading style.

Additionally, eToro offers a social news feed, where users can interact, share insights, and discuss trading strategies, fostering a vibrant community of traders.

eToro boasts an extensive network of traders all around the world, making it easy to find traders that align with your investment goals.

As with other platforms on our list, it comes with various risk management tools, including stop-loss orders.

However, where eToro really stands out is that it doesn't use external services for copy trading. Rather, you can copy trade directly from the platform through their CopyTrader™ system.

It is somewhat limited, though, in the fact that you can only copy 100 traders simultaneously. While that may not be a severe problem for beginners, and even seasoned traders, those with higher ambitions might not be thrilled by this limitation.

	Name	Score	Visit	Disclaimer
	eToro	8.7	Visitetoro.com					Don’t invest unless you’re prepared to lose all the money you invest.

When it comes to copy trading, companies opt for different approaches. Some develop their own proprietary copy trading services, while others form partnerships with social trading platforms.

Pepperstone, for instance, collaborates with MyFxBook and DupliTrade, offering the option to use their copy trading services.

The advantage of this partnership is that Pepperstone avoids charging extra commissions for copy trading.

However, it's important to note that the fees and minimum deposits for copy trading on platforms like MyFxBook and DupliTrade may vary. They typically range from one pound to five thousand pounds.

The wide selection of trading platforms available through Pepperstone, combined with the absence of extra fees and markups, makes it an attractive option for copy trading.

Each platform has its own set of pros and cons, allowing traders to choose the one that best aligns with their needs and preferences.

	Name	Score	Visit	Disclaimer
	Pepperstone	9.0	Visitpepperstone.com					Between 74-89 % of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

IC Markets is a reputable broker known for its exceptional services and competitive offerings for active traders. The broker is recognized for excellent order execution quality.

The platform offers copy trading services in partnership with top social trading platform providers, namely ZuluTrade and MyFxBook Autotrade.

Working with these renowned platforms, allows IC Markets customers to access a wide range of signal providers (around 2,000 providers) and a large client base.

It is worth noticing that the platform is regulated in Australia and the EU, providing clients with a secure trading environment. It also offers diverse Forex and CFD markets, low commissions, and high-quality order execution.

However, it is important to consider that when copying traders with ZuluTrade, IC Markets applies a 1.5 pips markup to the spread.

While IC Markets offers attractive opportunities for copy trading, it is essential to remain vigilant and be aware of potential scammers who may misuse the company's name for fraudulent activities. The FCA warns of online websites and companies that misuse the IC markets name.

	Name	Score	Visit	Disclaimer
	IC Markets	7.1	Visiticmarkets.com

Copy trading has emerged as a method for traders to replicate the trades of successful individuals. Initially, traders would communicate their intended transactions through newsletters or trading rooms, but that was just the beginning.

Now as technology advances, automated trading systems and platforms like Tradency's Mirror Trader were introduced around 2005, allowing traders to share their trading strategies and others to mirror-copy their trades.

This led to the development of copy trading, where traders could connect their personal trading accounts to platforms, making their trading actions directly available to users without the need for submitting their strategies.

Copy trading gained significant popularity from 2010 onwards, especially in the foreign exchange markets. However, the Forex industry has faced challenges with scams, prompting some brokers to shut down their copy trading services.

eToro stands as a prominent platform in the field, having received a trademark for its CopyTrader system, and boasting a large user base of verified traders from around the world.

The Regulation of Copy Trading in the UK

In the UK, copy trading falls under the regulatory oversight of the Financial Conduct Authority (FCA), which is responsible for ensuring fair practices and investor protection in the financial markets.

There are no specific rules that govern copy trading directly. However, the FCA does impose regulations that apply to investment services in general, which does protect you to a certain degree. Any platform that offers copy trading in the UK is regulated by the FCA.

Regarding investor protection, it is important to note that copy trading platforms are not typically protected under the Financial Services Compensation Scheme (FSCS). The FSCS provides compensation to eligible clients in case of a firm's failure, but it may not cover losses resulting from copy trading activities.

Investors should check if the copy trading platform they choose falls under the FSCS protection.

Copy trading might sound safe, but there are certain risks associated with the practice. These include:

• Trader risk – Regular risk associated with trading, and the fact is that past performance and success are not a guarantee of future success.

• Market risk – Standard risk any trader faces, due to market fluctuations and changes.

• Lack of control – Copy trading means you give up control and blindly follow another trader’s strategies.

• Over-reliance on the target trader – Depending too heavily on a single trader or not diversifying the copied trades can expose investors to concentrated risk.

There is also the risk of scams, of which the most common ones are:

• Fake signal providers – Scammers may pose as successful traders or signal providers. They may lure investors with promises of high returns and encourage them to copy their trades. However, these scammers may manipulate their trading records or engage in fraudulent activities.

• Trader identity fraud – Fraudulent platforms or individuals may use the identities of reputable traders without permission to attract followers. They may falsify trading records or present misleading performance data to deceive investors into copying their trades.

• Phishing and data theft – Scammers may attempt to collect sensitive personal and financial information from copy-trading platform users through phishing emails, fake websites, or social engineering techniques.

Copy trading, mirror trading, and social trading are all forms of social investing, but they differ in their execution and the level of interaction among participants.

First of all, let’s talk about copy trading. As we've already mentioned, it involves replicating the trades of selected successful traders in real time.

Investors choose a trader to copy, and their trading decisions are automatically mirrored in the investor's own account. Furthermore, the copied trades are executed proportionally to the allocated funds.

Next is mirror trading. It is similar to copy trading but has a broader scope. It focuses on replicating entire trading strategies rather than individual trades. Investors choose a trading strategy provided by a trader or a system, instead of tracking an individual directly.

Last but not least, social trading is a much broader term than both copy trading and mirror trading. In fact, both of these can be defined as a subtype of social trading.

Social trading also encompasses a wider range of activities and interactions among traders. It emphasizes the social aspect of connecting with other traders, sharing insights, and collaborating within a community.

Copy trading is a unique approach to investing, with a host of benefits, but also potential issues.

Copied traders don’t provide their services for free. In fact, there are several ways they get paid, which vary between platforms, and on the reputation and expertise of the trader. These are:

• Subscription fees – Many copy trading platforms allow successful traders to charge subscription fees to the traders who wish to copy their trades. These fees are typically paid on a monthly basis.

• Performance-Based Fees – Some copy trading platforms offer performance-based fee structures. In this model, traders receive compensation based on the profits generated by the followers who copy their trades.

• Partnership Programs – Copy trading platforms sometimes establish partnership programs with successful traders. These programs can include revenue-sharing agreements, where traders receive a percentage of the platform's earnings generated from their copiers' trades.

• Spread Rebates – Popular traders with a large number of copiers may negotiate spread rebates with the copy trading platform or the broker. Spread rebates are discounts on the bid-ask spreads charged by the broker for executing trades.

The exact process varies from platform to platform, but the general details are pretty much universal. Copy trading involves a simple process of replicating the trades of a chosen trader in your own trading account.

Opening and Closing Positions

To begin, you need to open an account with a copy trading platform or broker, and some may have a minimum deposit requirement. Once your account is set up, you can select a trader to copy based on their performance and trading style.

The copy trading platform will automatically replicate the trader's positions in your account, opening and closing trades in real time or with a slight delay.

What Is Automated and What Is Manual?

The automation lies in the execution of trades, while manual features may include setting parameters like stop-loss orders or take-profit levels. The choice between automated and manual copy trading depends on personal preferences and trading strategies, with automated being more hands-off and manual offering more control and customization options.

When a trader with a large number of followers executes significant trades, it can create a ripple effect that influences market sentiment and liquidity.

As an example, if a trader with many followers initiates a buy or sell position in a particular asset, it can create a sense of market sentiment among other traders. This sentiment can influence their decisions and potentially lead to increased buying or selling pressure, affecting the asset's price.

However, this same sentiment can lead to an increase in trading volume and liquidity in the market.

A famous example is Goerge Soros shorting the British pound. In 1992, on Black Wednesday, Soros famously made a substantial bet against the pound, and his actions, along with other market participants following his lead, contributed to the pound's decline and subsequent exit from the European Exchange Rate Mechanism (ERM)

Choosing investors to copy based on their risk tolerance can be a key strategy.

Consider the traders’ trading style first. Does the investor prefer short-term gains through day or swing trading, or if they adopt a buy-and-hold approach for long-term investments? In other words, do they play it short term, or prefer to HODL?

Then, keep an eye on the risk factor of the assets that the investor chooses. Some investors may prioritize high-growth stocks or sectors, while others may lean towards undervalued assets.

The second important factor when choosing a trader is whether you want to go manual, automatic, or somewhere in between. It all depends on the level of engagement and control you seek. Consider the following levels of automation:

Stocks (a term interchangeable with shares) represent ownership of shares in individual companies. Copy trading stocks allows you to replicate the trades of successful investors in the stock market. It offers the potential for capital appreciation and dividends.

However, stock prices can be volatile, and individual company performance may vary. Copy trading stocks requires monitoring company news and market trends.

Derivatives are financial instruments whose value is derived from an underlying asset. Examples include options and futures contracts.

They offer opportunities for hedging, speculation, and leverage. They also involve higher risk and complexity compared to traditional securities.

Spread Betting

Spread betting is a form of financial speculation where participants bet on the price movement of an underlying asset without actually owning it. It is popular in the UK and Ireland.

It offers potential tax advantages, flexibility in betting sizes, and access to various markets. However, it also carries significant risks as losses can exceed the initial deposit.

CFDs

CFDs are derivative contracts that allow traders to speculate on price movements in various markets without owning the underlying asset.

CFDs provide access to multiple markets, including stocks, indices, commodities, and cryptocurrencies. They offer the potential for leverage and the ability to profit from both rising and falling markets. Remember that CFDs carry high risk due to leverage.

Forex is the largest and most liquid financial market, where participants trade currencies.

Keep note that forex offers opportunities for profit from currency fluctuations and operates 24/5. It involves understanding economic factors, geopolitical events, and technical analysis.

However, it is worth noticing that forex trading can be very volatile, even when compared to some other securities from this list.

As always, the most important step when it comes to any kind of trading is doing adequate research – it is vital to make informed decisions and manage risks effectively.

When researching traders to copy, consider factors such as their trading performance, risk profile, trading style, and consistency. Look for traders with a track record of positive returns and prudent risk management practices.

When researching assets, analyzing their fundamentals, things like market trends, and potential risks. You should also assess your own risk tolerance – always be aware of the level of risk you are comfortable with, and choose assets and traders accordingly.

Implementing stop losses is an essential risk management tool in copy trading. A stop-loss order sets a predetermined exit point for a trade to limit potential losses. If the copied trade moves against your favor, the stop loss order automatically closes the position to prevent further losses.

While stop losses provide protection and help control risk exposure., using them too aggressively and prematurely, can lead to lower returns.

3. Be Disciplined

Discipline is crucial in copy trading, as well as in trading. A disciplined trader follows a well-defined trading plan, sticks to their risk management rules, and remains consistent in their approach. Above all, though, a disciplined trader avoids making impulsive decisions.

Developing discipline requires self-awareness, continuous learning, and practising good trading habits. Lacking discipline carries with it a host of potentially negative outcomes, ranging from simply gaining lower results than you otherwise would, to even becoming vulnerable to scams.

Diversification helps reduce overall portfolio risk by spreading investments across different assets, asset classes, or geographies.

Within asset classes, you can diversify by investing in various stocks, commodities, or currencies.

Among asset classes, consider allocating funds to stocks, bonds, commodities, and other instruments.

Geographical diversification involves investing in different countries or regions. In copy trading, diversification can be achieved by selecting multiple traders who specialize in different strategies or asset classes.

Finally, always monitor your trades.

By closely observing your investments, you can identify any deviations from your risk tolerance, make timely adjustments, and take necessary actions. Failure to monitor copy trades can result in missed opportunities, prolonged exposure to underperforming strategies, or failure to react to changing market dynamics.