CFD Copy Trading

CFD Copy Trading

CFD Copy Trading Broker Comparison Table
Online BrokerMinimum DepositCopy Trading Platforms
$200Web Trader & Apps
$200ZuluTrade, MetaTrader Signals
Depends on the broker chosenZuluTrade
$100ZuluTrade, DupliTrade
$100CopyFX
$100ZuluTrade, Myfxbook

CFD Copy Trading - Automated vs Auto Trading

CFDs are Contracts for Difference. CFDs let the trader trade a market without owning it. A CFD allows the trader to go long or short and to use leverage, but increasing leverage increases risk. Copy trading is a type of trading automation. To copy trade a trader needs to find a broker which supports this kind of trading. Then table provides a selection of platforms offering this functionality. When CFD copy trading, the trader is letting another trader trade CFDs (i.e. trade markets without owning them) on their behalf.

The broker may offer copy trading directly from its online trading platform or may support another dedicated platform which allows the trader to copy trade (for example, ZuluTrade of DupliTrade). Alternatively, the trader can sign up with a platform such as ZuluTrade and connect a broker or choose one to connect.

Typically the trader can also access social trading (for example as a feed) as well as copy trading. Social trading is not trading automation. When social trading, the trader can see a feed which has commentary of and about other traders. This means that the trader can augment their own analysis with the ideas and actions of other traders.

Copy trading is different from trading with automated trading strategies. When copy trading, the trader is letting another trader trade for them. When trading with a robot, the trader is letting a pre-defined algorithm trade on their behalf. In both cases trades are executed into the trader's own account. In both cases the trader gives up their own trading discretion, in one case to another trader, in another to an online trading robot. In both cases the trader has a measure of control in that they can choose the trader (according to a range of criteria given on the copy trading interface) or choose or even build the robot.

Is copy trading a less or more advanced strategy than trading with robots ? Copy trading can be seen as more straightforward than robot trading, and perhaps trading with robots can be seen as a more inherently advanced way to trade. This is partly because the trader really should understand the strategy being implemented by the robot. Following another trader seems more straightforward, however the trader should also try and understand what the trader is doing, rather than simply copying them, to the extent they can. In both cases there will be performance metrics. For example, how well a trader has been performing and in the case of a robot, the capacity to backtest the strategy on past market data (as well as performance metrics).

However in either case, because the trader or robot performed well in the past, does not means they will perform well in the future. A robot has this difference as well, if the trader wants they can built their own robots (when they know how to program in the language used to create robots on a particular platform). The trader does not necessarily need to copy trade, and can use social trading information as another tool when executing their own trades.

Thus the difference between trading on their own behalf and copy/robot trading is that the trader executes their own trades even if they use a range of tools such as signals to automate part of the process on the one hand, and with robots and copy trading the trader does not execute their own trades, rather lets a program or a trader do this for them. But in all these types of trading, it can be helpful to understand the context within which any trade is taking place, to try and optimise performance, to the extent that the trader can do so, whether to pick a robot, trader or to place a trade. Thus these types of trading become related tools to try and tackle the complexity of the market.

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