Nowadays, there are many alternative methods of trading on the Forex currency market. Choosing a strategy is the second step after picking up the right broker. One of these methods is copy trade – using schemes of successful traders with the utilization of special software. This method is very old and also used while playing with stocks. Such services are quite popular in the foreign exchange market and more transparent than using the help of special advisors. Let’s try to evaluate the pros and cons of the transaction copy service.
Advantages of Copy Trade
Forex trading is a unique process where each trader has his/her own expectations. A player from the Philippines will have different needs from a trader in Nigeria. Based on them, the transaction copy service gives the opportunity to choose a trading strategy that will satisfy the player. Considering that a player needs to constantly finance your account to make trades, this offer seems very attractive.
Using this strategy, trading results will be seen before joining the transaction copy service. Compared to the Forex robots service, copying makes it possible to see a daily update of your performance indicators. Based on the data provided, the player can obtain information about trading instruments, the number of profitable and loss-making transactions, and the duration of trades. After analyzing the parameters, one can reasonably choose a trading strategy. Copying deals also eliminate the emotional component, saving the trader from worries about the correct or wrong decision.
A very important feature of the copy service transaction is the possibility of parallel trading and managing already opened transactions. Nothing prevents you from closing a deal manually if you are afraid of losing your profit, or opening a new deal if there is a clear signal to enter the market. Moreover, making any adjustments, you can violate the trading tactics that the managing trader adheres to, which, perhaps, will be critical for the client.
Disadvantages of the Copy Transaction Service
The market is constantly changing, therefore, simply copying other trader’s actions in hopes of always staying profitable will not work. A player needs to regularly monitor the dynamics in the market and analyze all changes. From this perspective, copying deals is not a full-fledged investment.
As for the results, they are quite relative. It is very important to correctly determine the parameters for copying transactions depending on the ratio of deposits, leverage, etc. The trader operates exclusively on his/her account and money, and the client, using the service, automatically copies his transactions. The “managing” trader often does not even know how many client accounts copy his moves.
Here are two main things to consider. First of all, the “managing” trader does not bear any responsibility in case of loss of any funds by the client, unlike the manager of the PAMM account. Secondly, a few losing trades on the deposit of the “managing” trader can be a small drawback, while a client can lose all his money.
In conclusion, there is a clear difference between the PAMM-accounts service and copying trades. PAMM is an investment in the Forex currency market when a client entrusts his funds to a PAMM-account manager. The transaction copy service, on the other hand, is simply copying the moves of other players. Both services are available on the majority of platforms, including Alpari and many others.