Best Copy Trading Brokers in 2021
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The ascent of forex copy trading – also known as social trading, mirror trading, or auto trading – has been ongoing for over a decade. Thanks to social media and an increasingly faster web, financial news and market analysis propagate at lightning speed.CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 65% and 82% 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.
What is copy trading?
The idea of copy trading is simple: use technology to copy the real-time forex trades (forex signals) of other live investors (forex trading system providers) you want to follow. This way, every time they trade, you can automatically replicate (copy) their trades in your brokerage account.
Best Forex Brokers for Social Copy Trading
Based on over 105 different variables, here are the best forex brokers for copy trading.
- eToro - Best overall platform for copy trading
- AvaTrade - MetaTrader suite, ZuluTrade and DupliTrade
- Pepperstone - MetaTrader and cTrader platform suites
- Vantage FX - MetaTrader, ZuluTrade, DupliTrade, and Myfxbook
- IC Markets - MetaTrader, cTrader, Myfxbook, and ZuluTrade
- OctaFX - MetaTrader and cTrader platform suites
- XM Group - MetaTrader with custom indicators
Best overall platform for copy trading
eToro is a winner for its easy-to-use copy-trading platform where traders can duplicate the trades of investors across over 2300 instruments, including exchange-traded securities, forex, CFDs, and popular cryptocurrencies. Read full review
- Large number of investors to copy.
- Extensive range of markets to trade.
- User-friendly platforms and app.
- No automated trading strategies.
- Stops, limits mandatory on trades.
- Research trails competitors.
MetaTrader suite, ZuluTrade and DupliTrade
AvaTrade is a trusted global brand best known for offering traders an extensive selection of trading platform options. Our testing found AvaTrade to be great for copy trading, competitive for mobile, mostly in line with the industry average for pricing and research, and a winner for investor education. Read full review
- Wide variety of copy trading platforms.
- Low competitive forex spreads.
- Rich educational content.
- Research trails industry leaders.
- Limited range of tradeable markets.
MetaTrader and cTrader platform suites
While Pepperstone offers a small set of tradeable products, it provides one of the largest selections of third-party platforms, including multiple social copy trading options. Read full review
- Large selection of third-party copy-trading platforms.
- Competitive pricing for active traders using Razor accounts.
- Small selection of markets.
- $5,000 minimum for DupliTrade.
MetaTrader suite, ZuluTrade and DupliTrade
While offering forex and CFD traders the MetaTrader platform suite, multiple social trading platforms, and a proprietary mobile app, Vantage FX trails industry leaders in key areas, including mobile apps, research, and education. Read full review
- Ranks among best MetaTrader brokers.
- Competitive pricing on Pro ECN account (requires $20,000).
- Trails industry leaders in apps and research.
- Education falls short.
MetaTrader, cTrader, and ZuluTrade
IC Markets caters exceptionally-well to algorithmic traders through its commission-based accounts. Third-party research and trading tool plugins are part of the IC Markets MetaTrader platforms offering, making it our number one MetaTrader broker in 2021. Read full review
- No. 1 MetaTrader broker in 2021.
- Excellent automated copy trading strategies.
- Competitive pricing.
- Research and education are limited.
- Regulated primarily by one Tier-1 regulator (in Australia).
MetaTrader and cTrader platform suites
From among its account offerings, including MetaTrader and cTrader platforms, the MetaTrader 5 (MT5) Pro account stands out but still trails industry leaders in terms of low-cost forex trading and range of markets. Read full review
- Proprietary social copy trading platform connects to MetaTrader.
- Growing number of strategies.
- Just 50 symbols to trade.
- Not regulated in major financial centers.
- Lags in education, research.
MetaTrader with custom indicators
XM Group is a vanilla MetaTrader broker that offers the complete MetaTrader suite, along with a few notable upgrades to enhance the experience, in addition to custom indicators. Trading tools aside, XM Group’s research offering is rich with depth and variety, challenging industry leaders such as IG and Saxo Bank. Read full review
- Copy trading via MetaTrader Signals Market.
- Outstanding educational offerings.
- Standard account spreads are expensive.
- Cryptocurrency CFDs are not offered.
Copy trading history
Thanks to precise legal terms and ever-evolving trading technology, many regulators consider copy trading self-directed. In almost every jurisdiction, copy-trading is self-directed because the client must decide who to copy, even if the copying happens automatically (for each signal).
It’s important to note that not all trading platforms with social features provide copy trading.
Fun fact: Many of the early pioneers in social trading technology started out first as third-party platform developers, such as Tradency, ZuluTrade, and eToro. While some of these firms are still independent service providers (ISPs), eToro became a broker, for example.
Forex copy trading platforms comparison
Using our forex brokers comparison tool, here's a summary of the trading platforms offered by the best copy trading brokers.
|Desktop Platform (Windows)||No||Yes||Yes|
|Social Trading / Copy-Trading||Yes||Yes||Yes|
|MetaTrader 4 (MT4)||No||Yes||Yes|
|MetaTrader 5 (MT5)||No||Yes||Yes|
What is the best copy trading platform?
Our testing found eToro to have the best copy trading platform for 2021. eToro is excellent for social copy trading and cryptocurrency trading, and is our top pick for both categories in 2021. Furthermore, eToro offers a user-friendly web platform and mobile app that is great for casual investors, including beginners.
Is copy trading legal?
Copy trading is legal in most countries, pending the broker itself is properly regulated. When investing in the financial markets through a regulated-broker, procedures during the account opening process help ensure it is legal for you to trade, depending on your country of residence.
Is copy trading legal in the U.S.?
Yes, copy trading is legal in the U.S. provided that your broker is properly regulated by either the CFTC, in the case of forex; or SEC, for stocks. For cryptocurrency copy trading your broker must be a registered Money Services Business, or MSB, and licensed by FinCEN. Copy trading is typically treated like having a self-directed account.
Before copy trading existed, power of attorney was required to authorize a fund manager to trade on your behalf; but today, individual investors agree to a Letter of Direction, or LoD, which authorizes the broker to copy other trades automatically based on your explicit instruction.
Fun fact: The LoD (which is now incorporated in the platform terms and conditions) was a crucial piece of the innovation that helped legalize copy trading in the U.S., making it largely indistinguishable from a regular self-directed brokerage account. That said, in certain countries, there are still restrictions. In the U.K., for example, additional money-management licenses are required for copy trading.
How does you copy trade?
With copy trading, a trader (signal provider) shares their real-time trades with other traders (users). Using a copy trading platform, the users can, in real-time, automatically copy the trades of the signal provider. Each copy trading platform provides optional controls to protect investors. For example, traders can customize the amount of capital they are risking and which signals to copy.
How do you copy the best traders?
Select the traders whose trades you want to copy; set any limits and thresholds for risk management purposes; and last, decide whether to copy their existing trades or only new trades going forward.
The best traders will usually have the most followers and a more established track record of performance (i.e., history of monthly trading results) along with consistent risk-adjusted returns and above-average overall results. Also, depending on your goals, it’s important to find the right balance of diversification.
Pro tip: Look at more than just the absolute returns when comparing the best traders to copy, such as by reviewing additional performance metrics — average profit and loss, the number of traders placed, and average trade duration, for example — when making your decision.
Can you make money from copy trading?
Like any investment, you can make money or lose money copy trading. The idea with copy trading is that you can assess the profitability of each trader before choosing which signal provider you want to follow. However, as the market adage goes, "Past performance is not indicative of future results." Copy trading is risky, and many traders lose money. Only invest what you are willing to lose, start with a small amount of capital, and do thorough research before committing to a strategy.
How do I choose the best trading system to forex copy trade?
The best trading system to copy isn't necessarily the most profitable. It is crucial to align your risk-parameters with the strategy that best suits your investment goals. For example, a more conservative investor may choose a system with a lower average loss per trade, relative to the average profit. On the other hand, a more aggressive investor may choose a strategy which has higher volatility, which means higher risk for losses.
Many modern copy trading forex platforms contain hundreds or even thousands of signal providers. As a result, it can be difficult for traders to decide who to follow. Thus, it is always important to do research, start with a small amount, and never risk more than you are willing to lose.
Is copy trading a good idea?
Copy trading requires active account management, as it is considered self-directed, compared to a set-it and forget-it investment fund or other passive investments. Therefore, only you can determine whether copy trading is a good idea and if it should be included in your portfolio. If used correctly, copy trading can help you diversify your existing portfolio, and the best copy trade brokers offer the most tools.
How do you copy a trade?
First, use the platform's filters to narrow strategies and traders to copy. Next, compare strategies side by side to review historical returns and performance. Finally, enter an amount you are willing to risk and initiate the copy trade.
Copy trade tip 1: Besides choosing a trader with good historical results, it’s important to look at the performance statistics for each system, such as the amount of risk taken (maximum draw down) and average trade size, duration, and frequency of trades.
Copy trade tip 2: Some investors select more than one strategy, but having enough capital and choosing the right risk parameters, if any, are crucial when you copy trade forex strategies. Remember, copy trading is risky. Never invest more money than you are willing to lose.
Does copy trading really work?
Copy trading, or social trading, in financial markets has been around for over a decade, and it works when you choose a trusted and regulated broker. But that doesn’t guarantee you success, and the truth is that copy trading is not a “set it and forget it” tactic — it may require plenty of time and effort.
Copy trading can seem promising when you look at the results of the best performing traders, but it’s challenging to achieve such results in your account. The tools available to analyze traders and manage risk can vary widely across copy trading platforms, and database biases may come into play (for example, recency bias, which can lead to simply following the trader currently performing best, which is not always the best choice). In addition, investors may be led astray by strategy drift, when a trader deviates from historical performance.
Other thoughts on copy trading
Understanding how social copy trading networks calculate trading performance is an essential aspect as it affects the ordering of trader rankings. The method used to measure and track profit and loss also influences trade copiers.
Instant backfill bias is just one example of the challenges social trading technology developers face if they permit traders to instantly upload their entire trading history at the click of a button.
Such challenges have been known for years, and thanks to broker procedures, regulation, and robust technology, these concerns are mostly non-issues, especially for top-rated fx brokers. Nonetheless, if in doubt, it’s always prudent to check and ask questions.
eToro is a winner for its easy-to-use copy-trading platform where traders can duplicate the trades of investors across over 2300 instruments, including exchange-traded securities, forex, CFDs, and popular cryptocurrencies.
- Trust: eToro was founded in 2007 and is regulated in two tier-1 jurisdictions and one tier-2 jurisdiction, making it a safe broker (low-risk) for trading forex and CFDs.
- Commissions: For trading forex and CFDs, eToro is slightly pricier than most of its competitors, despite recently cutting spreads and introducing zero-dollar commissions for US stock trading.
- Copy trading platforms: eToro's main innovation is merging self-directed trading and copy trading under a unified trading experience. It is a winning combination.
AvaTrade is a trusted global brand best known for offering traders an extensive selection of trading platform options. Our testing found AvaTrade to be great for copy trading, competitive for mobile, mostly in line with the industry average for pricing and research, and a winner for investor education.
- Trust: Founded in 2006, AvaTrade is regulated in three tier-1 jurisdictions and three tier-2 jurisdictions, making it a safe broker (low-risk) for forex and CFDs trading.
- Commissions: Compared to pricing leaders such as IG and Saxo Bank, AvaTrade does not rank among the best brokers for low-cost trading, except for clients designated as Professional traders in the EU.
- Copy trading platforms: Alongside MetaTrader, AvaTrade offers its proprietary platforms, as well as ZuluTrade and DupliTrade, for social copy trading. The variety of platform options makes AvaTrade competitive in this area.
Here's a summary of the best forex brokers for social copy trading.
- Best Forex Brokers for 2021
- Best Forex Brokers for Beginners
- Best MetaTrader Brokers
- Compare Forex Brokers
For our 2021 Forex Broker Review we assessed, rated, and ranked 27 international forex brokers over a three-month time period resulting in over 50,000 words of published research.
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About the Author
Steven Hatzakis Steven Hatzakis is the Global Director of Research for ForexBrokers.com. Steven previously served as an Editor for Finance Magnates, where he authored over 1,000 published articles about the online finance industry. Steven is an active fintech and crypto industry researcher and advises blockchain companies at the board level. Over the past 20 years, Steven has held numerous positions within the international forex markets, from writing to consulting to serving as a registered commodity futures representative.