Forex copy trading makes it easy to leverage the knowledge and skills of other traders on your forex platform. With copy trading, you can pick traders to mirror, executing their trades in your account automatically.
While copy trading is very popular, there are some myths and misconceptions surrounding it. Let’s dispel some of the most common myths about copy trading.
1. Copy trading will let you get rich quick.
Many traders believe that copy trading is their ticket to overnight riches. They think all they need to do is find a trader with a good track record, mirror them, and maybe use some leverage in their accounts to command higher lot sizes. They then think the cash will flood into their account while they kick back and watch.
If only it were that easy. But no, you are not going to get rich quick with copy trading (nor are you going to do so with forex at all). And if you manage your money poorly, you will probably just end up blowing your account quickly.
2. You do not need to know anything about forex to do copy trading.
Many people gravitate to copy trading because they think that it means they do not need to learn anything about how to trade at all to do it. They want to just open an account, make a deposit, pick some traders to copy, and hope it works, with zero knowledge of forex.
But no, this is not effective. In fact, if you try to do it this way, you will set yourself up for failure. You will be far better at choosing traders to copy and managing your copy trading if you have some starting knowledge of forex. It does not have to be a lot, but it needs to be enough to manage your money and make decisions about whether to continue copying specific traders or not.
3. You do not ever need to learn how to trade if you copy trade.
Another myth about copy trading is that you can just do it forever and never have to learn anything else about how to trade.
No one has ever been successful this way. Think about it. If it were that simple, why would anyone ever bother learning how to trade?
You do need to keep learning how to trade. In fact, ultimately, you will do best if copy trading is just one tool in your forex toolbox. Having your own strategies will empower you to far more profitability in the long run.
A good approach is to use copy trading to give yourself a boost, but to rely on yourself first and foremost for success.
4. Only novices use copy trading.
A lot of people believe that copy trading is just a tool used by beginners to forex trading. While novices do comprise a large percentage of people who copy trade, they are by no means the only people who are doing it.
When copy trading is working, it is profitable. There is no reason that intermediate and advanced forex traders cannot also benefit from a profitable technique, even an easy one.
That is why copy trading is not just used by newbie traders. You will encounter traders at every skill level who copy trade. And you can keep doing it too long into your forex career. If it fits into your overall trading plan, then you should absolutely go for it.
5. Copy trading means giving up control.
Another misconception about copy trading is that by engaging in it, you are giving up all control over your trading. While there is some truth to this, it is not completely true, as it is not really an “all or nothing” situation.
Copy trading usually is automated, though there are some platforms that support manual copy trades.
On one hand, yes, you probably will give up some degree of control when you place copy trades. You will not control the strategies used, nor even necessarily understand what they are or how they work. You will not be able to do any troubleshooting if the strategies stop working, since you will not be the one who knows or applies them.
On the other hand, you retain a lot of control too. You are the one who decides whether or not to keep copying a given trader, and how much of your money you will put on the line.
Start Forex Copy Trading
We have now dispelled some of the most common myths and misconceptions about forex copy trading.
Forex copy trading involves giving up partial control, but not total control like some traders think. While it is popular among novices, you now know that intermediate and advanced traders can utilize it as well. We also have discussed how copy trading, while powerful, is not a get-rich-quick scheme, nor will it get you out of having to learn about trading.
With all of that in mind, copy trading can be an effective tool when you use it properly. On our site, you can find recommended forex brokers that offer copy trading.
