Mirror trading and the peculiarities of the Forex approach
Mirror trading is an approach that copies all trader’s transactions and operations. In this case, the investor’s and trader’s accounts are combined, and both receive profits. The trader’s maximum commission from the investor’s profit is up to 20%. For the broker, the income is the spread.
This trading strategy is popular with newcomers to the market. It is a great way to see how professional traders work in practice.
Mirror trading is almost identical to copying. There are two ways of doing this:
1. Manual copying. The investor follows the trader’s actions and repeats them. However, in this case, players rarely show their transactions online. Therefore, the investor may receive information with a delay, which will not be available.
2. Automatic copying. All actions are automatically copied from the trader’s account to the investor’s. You can independently adjust the speed of copying information. This mode allows you to disconnect from the trader’s account anytime. This is necessary if the investor starts losing money. The broker provides technical support and sets up the copy.
In mirror trading, the investor copies the signals and the entire strategy. This helps the investor understand the rules of trading faster. By following the example of experienced players, the investor learns how to open trades, set stop losses, and perform other processes.
The essence of the approach
Any standard account is suitable for mirror trading. Moreover, this approach allows you to use other strategies simultaneously. For example, you can open trades manually or using dedicated software. When choosing a platform, it is better to focus on the one the broker uses to ensure similar spread size and execution speed. Using the same platforms guarantees that there will be no difference in quotes between the trader and the investor, as well as the same amount of swap accruals.
A mirror strategy can be useful for creating one’s trading approach. In addition, by copying the best trades of different traders, the investor can build up his good statistics, which can then be used by other players.
Differences from social trading
Social trading involves sharing approaches and discussing different ideas. This process usually takes place on social networks or specialised services. The discussion then becomes a practical strategy for individual traders. At the same time, each individual decides whether or not to follow the ideas presented.
The mirror approach involves copying an existing strategy. However, the investor analyses the actions, delving into the logic and fundamental principles. And in the future, it is possible to use this or that approach to develop your algorithm of steps.
