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The ascent of 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.
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
- Pepperstone - Numerous copy trading platforms
- FXCM - FXCM App store for automated trading
- Darwinex - Unique social copy trading community
- AvaTrade - Multiple copy trading platforms
- HotForex - Full MetaTrader suite
- FxPro - Full MetaTrader suite
Best overall platform for copy trading
eToro is a winner in 2020 for its easy-to-use copy-trading platform where traders can copy the trades of other users across over 1,900 instruments, including CFDs on popular cryptocurrencies. Read full review
Numerous copy trading platforms
Pepperstone offers a small set of tradeable products but provides forex and CFD traders with competitive pricing, excellent customer service, and one of the largest selections of third-party platforms, including numerous options for social copy trading. Read full review
FXCM App store for automated trading
While its range of tradeable markets is narrow and pricing is just average for everyday trading, FXCM caters to multiple trader types. High-volume traders, algorithmic traders, and, overall, traders that appreciate robust trading tools alongside quality market research will find FXCM to be a good fit. Read full review
Unique social copy trading community
Darwinex provides forex traders with a unique social copy trading community that enables investors to buy and sell trader-developed strategies. Copy trading aside, while Darwinex also offers the full MetaTrader suite, the offering is just average. Read full review
Multiple copy trading platform options - Visit Site
While AvaTrade provides multiple platforms for algorithmic and social copy-trading, the broker's overall client experience trails industry leaders. Customer service is terrible, pricing is just average, less than 1000 instruments are available to trade, and research is underwhelming. Read full review
Copy Trading History
Without social trading technology, the act of copy trading would be considered a managed account and require a power of attorney. Or, in other cases, a trader would need to monitor their account continually for signals to manually copy. However, thanks to precise legal terms and ever-evolving technology, many regulators consider social 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.
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.
Best Copy Trading Platforms
From the 30 international forex brokers we reviewed for copy trading, eToro, is our top pick for 2020. The broker has continued to innovate within its next-generation eToro platform, which delivers an impressive user experience packed in a modern web-based user interface.
Overall, the eToro platform experience sets the bar high for social trading and is again the clear winner in 2020. eToro continues to lead the industry forward and almost exclusively focuses on social copy trading.
Indicative prices for illustration purposes. Indicative prices; current market price is shown on the eToro trading platform.
Pepperstone took second place this year as it offers a comprehensive range of third-party social copy-trading platforms, in addition to the native forex signals market available in MetaTrader 4 (MT4) and Spotware Systems’ cMirror platform. The firm also offers the ZuluTrade platform, AutoTrade by Myfxbook, Tradency’s MirrorTrader platform, in addition to the developer’s RoboX solution.
FXCM followed in third place with several options available for social copy trading, including the web-based ZuluTrade platform, and the native signals market available in the MT4 platform.
Darwinex, our fourth-place finisher, provides traders access to nearly 1,200 trader-developed strategies that are traded like securities (ticker symbols) on the Darwinex platform. The best performing strategies on the platform receive funding from the broker itself, which allocates $4.5 million among the most successful traders, during each competition period.
AvaTrade came in fifth place for its array of social copy-trading platforms such as ZuluTrade and Tradency, and including its most recent addition of DupliTrade.
Copy Trading Platforms Comparison
Using our forex brokers comparison tool, here's a summary of the trading platforms offered by eToro, Pepperstone, FXCM, and Darwinex.
|Desktop Platform (Windows)||No||Yes||Yes||Yes|
|Social Trading / Copy-Trading||Yes||Yes||Yes||Yes|
|MetaTrader 4 (MT4)||No||Yes||Yes||Yes|
|MetaTrader 5 (MT5)||No||Yes||No||Yes|
What is the best copy trading platform?
Our testing found eToro to have the best copy trading platform for 2020. eToro is regulated in countries across the globe, offers over 1,700 different instruments for copy trading, and provides a robust trader community. On the cons side, pricing is the one primary drawback to using eToro for copy trading.
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.
How does copy trading work?
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.
Can you make money copying trades?
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 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.
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.
Bottom line, for 2020, the above forex brokers provide traders the tools and capabilities they need to confidently copy trade.
Here's a summary of the best forex brokers for social copy trading.
- Best Forex Brokers for 2020
- Best Forex Brokers for Beginners 2020
- Best MetaTrader Brokers 2020
- Compare Forex Brokers
For our 2020 Forex Broker Review we assessed, rated, and ranked 30 international forex brokers. Each broker was graded on 105 different variables and, in total, over 50,000 words of research were produced.
While encouraged, broker participation was optional. Each broker had the opportunity to complete an in-depth data profile and provide executive time (live in person or over the web) for an annual update meeting.
All data submitted by brokers is hand-checked for accuracy. Ultimately, our rigorous data validation process yields an error rate of less than 1% each year, providing site visitors quality data they can trust. Learn more about how we test.
Forex Risk Disclaimer
"There is a very high degree of risk involved in trading securities. With respect to margin-based foreign exchange trading, off-exchange derivatives, and cryptocurrencies, there is considerable exposure to risk, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or related instrument. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable, or that they will not result in losses." Learn more.