Copy trading, also known as social trading, represents an innovative investment strategy in which users replicate the trading actions of more seasoned and successful investors. It serves as an excellent entry point into the world of financial markets, enabling individuals to both learn from and mimic the transactions executed by experienced, often professional traders.
Within this comprehensive guide, we delve into the premier software and platforms designed for copy and social trading. Our assessment is grounded in a range of factors, encompassing security, reliability, fees, trading interface, mobile application quality, customer support, available investment options, and more.
Furthermore, we take an in-depth look at the associated risks and advantages of engaging in copy trading investments.
Copy Trading Platforms in 2023
This compilation spotlights the most outstanding copy trading platforms currently accessible. Before establishing an account, it's crucial to weigh several key considerations, including fees, commissions, regulatory compliance, deposit and withdrawal processes, and other pertinent aspects – all of which we will explore in greater detail later on.
Here's a rundown of the leading platforms:
- eToro – The Ultimate Copy Trading Platform
- AvaTrade – Premier Forex Copy Trading Platform
- Pepperstone – Top cTrader Copy Trading Platform
- ZuluTrade – Leading Third-Party Copy Trading Software
- IC Markets – – cTrader Copy Trading Platform
- Octa FX – Exceptional Copy Trading Broker
- Vantage FX – Forex Copy Trading Platform Featuring AutoTrade
Best Overall
PFI Rating 4.9
77% of retail investor accounts lose money when trading CFDs with this provider.
Best Trading App
PFI Rating 4.9
76% of retail investor accounts lose money when trading CFDs with this provider.
Low Spreads
PFI Rating 4.9
74-89 % of retail investor accounts lose money when trading CFDs
PFI Rating: 4.9/5
1. eToro: The Premier Choice for Copy Trading
eToro stands out as our top pick for the best copy trading platform, primarily due to its status as the largest and most widely recognized software for copy trading. Established in 2007, eToro now operates under the regulation of esteemed authorities like the Cyprus Securities and Exchange Commission (CySEC).
As a trailblazer in the world of copy trading, eToro has experienced substantial growth over the years, consistently setting the standard for other social trading platforms to follow.
One of the standout features of eToro is its offering of zero-commission trading on real stocks, complemented by overall low trading fees.
To commence your trading journey with eToro, you'll need to make a minimum deposit of $50 to $200, depending on your country of registration. For those new to trading, eToro's demo account is particularly noteworthy, providing a generous $100,000 in virtual funds for practice.
Furthermore, the eToro CopyTrader platform is accessible in over 32 languages, ensuring a broad user base. It's available to anyone with a valid eToro account, and you can access it through a downloadable PC app, a web-based platform, or mobile applications compatible with both Android and iOS devices.
77% of retail investor accounts lose money when trading CFDs with this provider.
PFI Rating: 4.9/5
2. AvaTrade: The Premier Choice for Forex Copy Trading
AvaTrade emerges as the optimal platform for those seeking to engage in forex copy trading. Established in 2006, AvaTrade has its headquarters in Dublin, Ireland, and boasts a well-regarded status as a regulated Forex and CFD broker. The company holds licenses from a multitude of reputable authorities, including the FCA, ASIC, FSCA, FRSA, Israel Securities Authority, Financial Services Agency, and the Financial Futures Association of Japan.
To embark on your trading journey with AvaTrade, a minimum deposit of $100 is required, coupled with the advantage of low trading fees. Additionally, AvaTrade provides an invaluable tool for newcomers in the form of a demo account. Registering for this account grants you access to $100,000 in virtual funds, empowering you to mirror the forex trades of your chosen traders without risking real capital.
AvaTrade's offering encompasses a wide range of financial instruments, including CFDs on Forex, Stocks, Commodities, FXOptions, Cryptocurrencies, Indices, ETFs, and Bonds.
The platform distinguishes itself with its proprietary copy trading platform known as AvaSocial, specifically designed for Social Copy Trading. AvaSocial enables you to replicate the trading actions of a diverse array of traders. For those who prefer a mobile trading experience, AvaTrade's mobile app stands out for its user-friendly design and intuitive interface. Alternatively, a desktop app is available for those who favor trading on a computer.
In addition to AvaSocial, AvaTrade extends its social trading capabilities by offering access to DupliTrade and ZuluTrade, providing a comprehensive suite of options for traders seeking a social trading experience.
76% of retail investor accounts lose money when trading CFDs with this provider.
PFI Rating: 4.9/5
3. Your Reliable Choice for Forex and CFD Trading
Pepperstone, established in 2010 and headquartered in Australia, stands as a prominent Forex and CFD broker. It has earned a solid reputation in the industry and boasts global regulatory oversight from prestigious entities, including ASIC, CySEC, FCA, SCB, DFSA, BaFin, and CMA.
Pepperstone extends a variety of copy trading options to its clientele, facilitated through platforms such as MyFxbook, MetaTrader Signals, and Duplitrade.
What distinguishes Pepperstone further is its commitment to keeping trading accessible and cost-effective. The platform offers traders the advantage of low trading fees, making it an attractive choice for those conscious of transaction costs. Additionally, Pepperstone imposes no minimum deposit requirement, ensuring that traders of all backgrounds can participate in the platform's offerings. Importantly, there are no inactivity fees, providing flexibility for traders who may not engage in frequent trading activities.
74-89 % of retail investor accounts lose money when trading CFDs
PFI Rating: 4.6/5
4. ZuluTrade: Empowering Copy Trading with a User-Friendly Platform
ZuluTrade is a versatile trading software solution designed to facilitate copy trading seamlessly by integrating with your existing brokerage account. The platform was meticulously developed to empower clients to register, assess, and select traders they wish to replicate. ZuluTrade diligently verifies the performance results of these traders, ensuring transparency and reliability.
The minimum deposit required to engage with ZuluTrade varies depending on the brokerage partner you opt for. Similarly, the trading fees associated with your transactions are determined by the specific broker you choose to collaborate with.
ZuluTrade offers two distinct account types to cater to your preferences:
Classic Account: This account option is devoid of any subscription fees. Instead, it employs volume-based fees, offering a flexible approach to copy trading.
Profit Sharing Account: For a monthly fee of $29.99, which includes a one-month free trial, you can access the profit-sharing account. This account type adopts a transparent profit-sharing model, where you are only charged for successful (profitable) trades. Here's how the profit distribution works:
20% of the profit goes to the trader whose actions you are copying.
5% is allocated to ZuluTrade for its services.
Investors retain a significant 75% share of the profit, enhancing the potential for returns on your investments.
On ZuluTrade Official Website
PFI Rating: 4.5/5
5. IC Markets: Your Premier Choice for Forex Copy Trading
IC Markets, an established Australian-based broker, facilitates copy trading through the cTrader and ZuluTrade platforms, ensuring a diverse range of options for traders.
One of IC Markets' standout features is its provision of raw spreads, which can reach as low as 0 pips, contingent upon the selected account type. This makes it an excellent choice, particularly for Forex traders who seek tight spreads and optimal pricing. The platform offers three distinct account types, catering to various trading preferences and strategies. Moreover, IC Markets imposes a reasonable minimum deposit requirement of $200, and importantly, there are no inactivity fees, ensuring flexibility for traders.
Throughout our comprehensive research and testing, we observed that IC Markets consistently delivers swift execution speeds, enhancing the overall trading experience.
IC Markets extends its offering to encompass a wide array of financial instruments, including CFDs on Forex, Commodities, Indices, Bonds, Cryptocurrency, Stocks, and Futures, making it a comprehensive platform for diverse trading needs..
On IC Markets Official Website
PFI Rating: 4.5/5
6. Octa FX: Your Accessible Global Trading Partner
OctaFX, established in 2011, has established a prominent presence in over 150 countries worldwide. While they operate within the EU and Asia, it's important to note that their services are not available in the United States. OctaFX prides itself on a well-crafted and user-friendly platform, characterized by its intuitiveness and supported by a rich array of educational resources. The company operates under the regulatory oversight of CySEC, ensuring a secure and trustworthy trading environment.
OctaFX offers its Copytrading app, accessible exclusively on Android devices or through a web-based platform. This user-friendly interface allows traders to navigate with ease.
One of the key advantages of OctaFX's platform is the ability to filter and search for expert traders based on their performance metrics, risk score, number of copiers, gain, and commissions. This empowers traders to make informed decisions when selecting traders to emulate.
OctaFX distinguishes itself by offering some of the most competitive commission rates among brokers. Additionally, they provide a valuable assurance of zero slippage or requotes when trading Forex pairs, enhancing the reliability of their service.
On Octa FX Official Website
PFI Rating: 4.5/5
7. Vantage FX: Your Next Trading Destination
Next on our roster is Vantage FX. Founded in 2009, Vantage FX operates under the regulatory oversight of VFSC, ASIC, and CIMA, instilling confidence in its reliability and compliance with industry standards.
Vantage FX caters to traders with a reasonable minimum deposit requirement of $200, and importantly, there are no deposit fees, making it an accessible choice for traders. The platform offers leverage options of up to 500:1, allowing traders to amplify their positions, coupled with competitive spreads starting from 0.0 pips.
Vantage FX equips its clientele with two robust trading platforms: MetaTrader4 and MetaTrader5, providing flexibility and choice to meet diverse trading needs.
For those interested in copy trading, Vantage FX offers a range of options, including DupliTrader, ZuluTrade, and MyFXBook Autotrade, enabling traders to replicate the strategies of experienced traders with ease and confidence.
Comparing Copy Trading Platforms: An In-Depth Analysis
In the following sections, we conduct a thorough comparison of these platforms, evaluating them across a spectrum of critical factors.
On Vantage FX Official Website
Compare Copy Trading Platforms
Below we compared the platforms based on a variety of factors.
| Trading Platform | eToro | AvaTrade | Pepperstone | ZuluTrade | IC Markets |
|---|---|---|---|---|---|
| Founded | 2007 | 2006 | 2010 | 2007 | 2007 |
| Regulation | FCA, CySEC, ASIC, FSAS | FCA, ASIC, FSCA, FRSA, Israel Securities Authority, Financial Services Agency, Financial Futures Association of Japan | ASIC, CySEC, FCA, SCB, DFSA, BaFin, CMA | EU and Japan | ASIC, CySEC, FSA, SCB |
| Offering Of Investments | Stocks, ETFs, Forex, Crypto, Indices, Commodities | Forex, Stocks, Commodities, FXOptions, Cryptocurrencies, Indices, ETFs, Bonds | CFDs on Forex, Crypto, Shares, Indices, Crypto | Forex, Stocks, Crypto, Commodities, Indices | CDFs on Forex, Commodities, Indices, Bonds, Cryptocurrency, Stocks, Futures |
| Minimum Deposit | $50 - $100 | $100 | $0 | Broker Dependant | $200 |
| Demo Account | Yes | Yes | Yes | Yes | Yes |
| Withdrawal Fee | $5 | $0 | $5 | Broker Dependant | $0 |
| Inactivity Fee | $10/month | $50/month After 3 Months | $0 | Broker Dependant | $0 |
| Deposit Methods | PayPal, Skrill, Neteller, Credit Card, Debit Card, Rapid Transfer,iDEAL, Klarna / Sofort Banking, Bank Transfer, Online Banking - Trustly, POLi | Credit and Debit Cards, Wire Transfer, e-payments | Credit/debit cards, Bank/Wire Transfer, PayPal, Neteller, Skrill, UnionPay | Broker Dependant | Credit Cards, Debit Cards, PayPayl, Neteller, Skrill, UnionPay, Wire Transfer, Bpay, Fasapay, Broker to Broker, Poli, Thai Internet banking, Klarna, Rapidpay, Vietnames Internet Banking |
Differences Between Copy Trading, Social Trading, and Mirror Trading
The distinctions among these forms of copy trading are subtle but pivotal.
Copy Trading: This empowers users to handpick a specific investment strategy to follow. Copy trading platforms provide access to signal providers' performance histories and vital data, enabling users to align their goals with compatible signal providers. Sometimes referred to as social trading, copy trading is an ideal entry point into financial markets, facilitating learning through emulating the trades of seasoned investors.
Mirror Trading: Initially an older trading strategy, mirror trading has evolved into copy trading with the aid of big data. In mirror trading, users replicate the portfolios of experienced traders without manual intervention. These platforms aggregate signal data from top-performing traders, which retail traders can then follow.
Social Trading: This term encompasses both copy and mirror trading. Social trading blends the best aspects of social media into automated trading software, allowing users to interact and exchange ideas. The objective is to cultivate a global community of traders.
Copy Trading Software
Retail Brokers: Platforms like eToro and AvaTrade utilize proprietary trading platforms for executing trade orders. Others employ copy-trading software, with MetaTrader 4 and MetaTrader 5 (MT4 & MT5) being the most popular. Copy trading isn't fully automated but replicates investors' trades.
MetaTrader4
This platform enables direct trading. Brokers using MT4 consolidate various charts into focused information for user convenience. While older than MT5, MT4 still offers ample features, albeit lacking an economic calendar.
MetaTrader5
MT5 Released in 2010, MT5 boasts an expanded feature set, though not all brokers have adopted it. It features an economic calendar and an embedded community chat for knowledge sharing.
cTrader
cTrader Copy is utilized by niche brokers, with a focus on social trading. It allows any trader to become a signal provider, fostering competition among signal providers to maximize transparency.
DupliTrade Copy Trading: DupliTrade offers strategies in stock, CFDs, and Forex, with a strong emphasis on Forex. While it offers fewer instruments to trade, it provides in-depth analysis of traders' portfolios, enhancing transparency.
Should You Start Copy Trading?
Copy trading is touted as a means to reduce the risks associated with trading, but it's essential to understand its pros and cons.
Pros
- Emulate strategies of top traders for automated trading.
- Trade even while you sleep, minimizing time investment.
- Start and stop copy trading quickly on many platforms
- Minimal trading experience required.
- Emotion-free trading; decisions aren't influenced by emotions.
- A wide choice of brokers and traders.
Cons
- Even the most profitable traders don't guarantee consistent wins.
- Copy trading often incurs higher commissions than manual trading.
- Traders following others may be slightly behind the trend.
- Limited knowledge gained compared to learning trading independently.
How to Choose a Copy Trading Broker?
Selecting the right copy trading platform is crucial. Here are key factors to consider:
Fees & Commissions
Assess the fees charged by the platform, including commissions on trades and inactivity fees. Some signal providers may also charge a commission on copied trades.
Inactivity fees are also something worth paying attention to. Brokers penalize traders who leave their accounts dormant without trading. These fees can add up if you’re not paying attention. Many signal providers charge a commission on each copied trade.
Regulation
Ensure the broker complies with regulations in its operating territories. Regulations cover aspects such as leverage limits and tradable instruments.
Customer Support
Access to responsive customer support is vital. Check the methods available for contacting the broker and their availability across different time zones.
Deposit and Withdrawal Methods
Each platform offers its own deposit and withdrawal methods. Ensure they align with your preferences, and consider the diversity of options offered, including cryptocurrencies.
By evaluating these factors, you can make an informed decision when selecting a copy trading platform that suits your needs.
The Risks of Copy Trading
Copy trading entails inherent risks, similar to other online trading methods. Despite seemingly confident predictions, no one can guarantee with absolute certainty how a market will behave. It's important to exercise caution, especially for new traders utilizing leverage. While leverage can amplify profits on successful trades, it also magnifies potential losses, potentially exceeding the initial investment.
Best Copy Trading App
When it comes to mobile applications, eToro stands out among its competitors. Designed with user-friendliness in mind, it offers a streamlined and feature-rich experience. eToro's mobile app mirrors the functionality of its desktop counterpart, ensuring seamless trading and communication.
Best Copy Trading Platform for Cryptocurrencies
For cryptocurrency enthusiasts, eToro shines as the premier platform for cryptocurrency copy trading. Offering an extensive range of cryptocurrencies, including Bitcoin and Ethereum, eToro provides users with access to a crypto wallet. It also introduces crypto copy portfolios, catering to those seeking a more passive approach to crypto trading, revolutionizing crypto social trading.
Forex Copy Trading
For those focusing on Forex pairs, AvaTrade emerges as the top choice. Renowned for its stringent regulations, AvaTrade is considered a low-risk option in the forex industry. With access to an impressive array of 55 currency pairs, coupled with some of the lowest commission charges among retail Forex brokers, AvaTrade is a standout choice for Forex copy trading.
Choosing a Competent Trader to Copy
Selecting the right copy trading platform is just the beginning; the choice of traders to copy is equally critical. Here's a brief guide on what to consider when searching for the ideal trader to emulate:
Track Record
Scrutinize the potential trader's track record. Assess the consistency of their successful trades and the duration of their trading history. Traders with over 12 months of experience offer insights into their performance during various market conditions. Prioritize traders with a consistent record of success over those with sporadic profitable trades.
Number of Followers and Amount of Money Invested
Number of Followers and Amount Invested: Similar to social media, more followers generally indicate a trader's credibility. Analyze whether their followers are actual traders using real money rather than demo accounts. This indicates a greater level of trust. Evaluate the profit earned by followers and the total amount invested in the trader's portfolio.
Drawdown
Drawdown reflects the extent of losses incurred before achieving profitability. High drawdowns signify greater risk, especially for novice traders. Consider traders with maximum drawdowns of 20% or less. Day traders should also assess daily drawdown rates.
Frequently Asked Questions (FAQ)
Is copy trading legal?
Copy trading, including forex copy trading, is entirely legal worldwide. Regulatory compliance varies by region, so traders should ensure brokers adhere to relevant regulations. In the U.S., copy trading is legal, subject to the regulations of the CFTC (Commodity Futures Trading Commission) or the SEC (Securities and Exchange Commission).
Can you trade forex for free?
Yes, free forex copy trading is possible through the use of a free demo account.
Can you make money with copy trading?
Yes, profitability in copy trading is attainable by following profitable signal providers. Thorough research is essential before selecting a trader to emulate. Not all traders yield high returns, so accessing trade history data can help mitigate risks.
How to start copy trading?
Starting copy trading is straightforward after reading this guide. Choose a platform that aligns with your trading preferences, whether forex or stocks. Research commission charges and deposit requirements before opening an account. Once you've registered, select a signal provider and analyze their trading history. Opt for a trader with a consistent profit record before copying their trades.
How to find good traders to copy?
Vet potential traders by examining the amount of capital other traders have invested in their strategies, excluding demo accounts. Traders with substantial follower investments are generally trustworthy. Evaluate a trader's returns, avoiding those with negative returns or excessively high returns, which may indicate high-risk strategies.
