Copy trading is a popular tool that enables you to mirror the buy and sell positions of an experienced forex trader.
In this guide, I compare some of the best copy trading forex brokers for fees, supported traders, regulation, copy trading platforms and more.
Also consider: My guide to choosing a forex broker
Top Low Spread Forex Brokers
Browse the top copy trading forex brokers in March2023
Below, I reveal a selection of copy trading brokers that enable you to trade forex in a passive way.
Read on to choose the right copy trading platform for your investment goals.
eToro – Overall best copy trading platform
I found that eToro is perhaps one of the stand-out copy trading platforms to consider when searching for the best copy trading forex brokers. More than 30 million traders use eToro from more than 100 countries – including the US.
There are many thousands of verified traders that have signed up for the eToro copy trading program – meaning that you have ample choice. Best of all, I like that eToro offers a significant range of stats for each verified user, enabling you to choose the right copy trader for your goals.
For example, you can review the month-by-month returns and losses generated by the trader since they became an eToro client. This means that you also have access to trading data before the respective individual joined the copy trading service.
Furthermore, you choose traders based on their preferred asset class – such as forex or stocks. For a complete 360-degree overview of the trader, you can even assess recent trades – such as the stake and whether the position returned a profit or loss.
What I like about eToro
In addition to the above, eToro also enables you to evaluate the type of strategy that the trader is utilizing. This can be achieved by assessing the average trade duration and the number of positions entered each week.
For instance, if you are looking to copy a forex day trader, you will likely find that the average duration is several hours. Another top feature that I like with eToro is that the broker automatically assigns its copy traders with a risk score.
This is based on the types of assets being traded, average stakes, and historical performance. Once you have chosen a trader to copy, you can invest any amount from $200 upwards. You can choose to copy the entire portfolio as it is, or just future positions.
Either way, I like that eToro does not charge any additional fees when using the copy trading tool. In terms of fees to be aware of, eToro offers forex trading on a spread-only basis, with EUR/USD starting at 1 pip.
This fee will simply be incorporated into your profit and loss when copying a trader. Stocks and ETFs, on the other hand, can be traded commission-free. You will have the freedom to add or remove assets from your copy trading portfolio at any given time.
Another important point to note is that eToro is both a copy trading platform and a regulated brokerage. As such, your trades will not be executed by a third party. eToro is regulated by the SEC, as well as ASIC (Australia), CySEC (Cyprus), and the FCA (UK).
Pros
- Thousands of verified copy traders to choose from
- Lots of research data provided on each trader – such as past performance
- No additional fees to copy other traders
Cons
- Minimum copy trading investment is $200
- Limited selection of exotic pairs
- Seasoned forex traders may be using more advanced brokers
Forex.com – Copy forex traders via MT4
Forex.com is a popular currency broker that does not directly support copy trading. It does, however, support MetaTrader 4 (MT4), which means that you can indirectly copy forex traders that use this platform.
In fact, MT4 is one of the most sought-after trading platforms for experienced forex traders that seek access to high-level technical indicators and other trading tools. Therefore, this represents a viable option for US clients that wish to engage in copy trading.
First and foremost, you will need to open a standard Forex.com account to get started. This is the only account type that supports MT4.
The standard account not only offers access to over 80 currency pairs, but you will be able to indirectly copy trade on a spread-only basis. The minimum recommended deposit is $1,000.
What I like about Forex.com
After your Forex.com has been opened, you can then download MT4 to your desktop device. You will then be able to link MT4 with your Forex.com account and begin researching suitable traders and signals to copy.
In a similar nature to eToro, MT4 gives you access to a wide range of core data points that will enable you to choose a suitable trader. For instance, you can view the historical past performance, return on investment (ROI), average profit and loss, and maximum drawdown.
All traders that can be copied on MT4 will set their own pricing structure, which is typically charged for each month that you continue to copy them. I also like that through Forex.com, you can connect MT4 to a free demo account.
This is crucial, as you will have the ability to try the chosen copy trader out before risking any money. Each position that the trader places will be reelected in the demo account but with paper funds.
Pros
- Copy seasoned forex traders via an MT4 link-up
- Most traders charge in the region of $20-40 per month
- You can start off with a demo account to test the trader out
Cons
- Forex.com does not directly support a native copy trading platform
- You will need to manually adjust your copy trading settings via MT4
- Required to pay a subscription fee each month
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Have you tried Interactive Brokers?
Capital at risk.
OANDA – Low-cost forex broker supporting MT4 signals
In a similar nature to Forex.com, OANDA does not directly support copy trading on its platform. However, OANDA enables you to trade via MT4 so again – this is another option to consider. OANDA offers two account types – both of which I consider cost-effective.
If you are looking to engage in copy trading with a small amount of capital, you might be more suited for the spread-only account. This means that when you copy a forex trader via MT4, OANDA will not charge you any trading commissions.
The lowest spread on offer is 1.4 pips, which is available when trading EUR/USD, USD/JPY, and AUD/USD. If you are planning to invest larger amounts into copy trading, the core pricing account might be more suitable.
What I like about OANDA
I like that the core pricing account offers access to the wholesale forex market. This means that indirectly, you will be copy trading with the same bid and ask prices as tier-one banks. The underlying commission payable on this account type is $5 per currency lot traded.
If you like the sound of OANDA, your copy trading link-up via MT4 will support more than 70 forex pairs. Furthermore, you can easily fund your OANDA account with a debit card, ACH, or a bank wire transfer.
Most importantly – and just like eToro and Forex.com, OANDA offers a free demo account that comes preloaded with paper funds. This means that via MT4, you can take your chosen copy trader for a test-drive before risking any of your own capital.
Pros
- Fast and easy link-up with MT4
- Indirectly trade more than 70+ pairs
- Core pricing account offers industry-leading spreads
Cons
- You will need to copy trade via MT4
- Lower overnight financing fees available elsewhere
- Monthly fees charged after 12 months of inactivity
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Have you tried Interactive Brokers?
Capital at risk.
Collective2 – Automated copy trading strategies that you can connect to brokers
Collective2 is a third-party copy trading platform that enables you to choose from a broad selection of strategies. In addition to stocks and ETFs, Collective2 also hosts strategies that focus exclusively on forex.
As Collective2 is not a brokerage, you will need to connect your account to a partnered trading platform. For US clients, Trade Pro Futures and Forex is one such option. You can also connect Collective2 to TradeStation.
Either way, Collective2 supports more than 2,200 strategies that have been pre-vetted. You will have access to a range of important information to help with the decision-making process, such as the identified risk and historical returns.
What I like about Collective2
Collective2 charges a monthly subscription fee to gain access to its portfolio of trading strategies. If you require just one strategy, the solo plan costs $49 per month.
If, however, you wish to diversify across multiple copy trading systems, the standard ($99 per month) and portfolio ($199 per month) plans permit three and five strategies respectively.
In addition to the above fees, you will also need to consider the commissions and spreads charged by the broker that you connect your Collective2 account with. I like that Collective2 offers a wealth of guides and videos on how to connect its copy trading signals to its partnered brokers.
In terms of reputation, Collective2 LLC is a member of the National Futures Association (NFA).
Pros
- Clear and transparent pricing structure
- More than 2,200 strategies to choose from
- Member of the NFA
Cons
- Partnered brokers are limited for US clients
- Minimum monthly subscription of $49
- Standard plan supports just one copy trading link-up
We can’t take you to this site at the moment.
Have you tried Interactive Brokers?
Capital at risk.
Capital at risk.
IG – Spreads from 0.8 pips and copy trading via MT4
IG is another popular forex broker that I came across that supports MT4 and thus – copy trading strategies. Once again, you will be required to connect MT4 to your IG account, select a copy trading provider, and set up your parameters before going live.
IG supports over 80 currency pairs, so this will cover your chosen copy trader across all majors and minors, and a good selection of exotics.
What I like about IG
I like that IG does not charge any commissions when trading forex, As such, this will also be the case when you engage in copy trading via MT4. You will indirectly pay the spread, with IG offering a minimum bid/ask price of 0.8 pips on EUR/USD.
I also like that IG offers a practice trading account with $10k in virtual funds. This will be vital when testing out copy trading strategies via MT4.
If you decide to follow the copy trading strategy with real money, you will need to deposit at least $250 into your IG account. IG is an established broker that was first founded in 1974 and is a member of the NFA.
Pros
- Commission-free forex trading
- Spreads start from 0.8 pips
- Full support for copy trading vis MT4
Cons
- Minimum deposit of $250
- No negative slippage coverage
- No proprietary copy trading tool
- Browse the top copy trading forex brokers in March2023
- How does copy trading work?
- How do you copy trade?
- Is copy trading good for beginners?
- Does copy trading really work?
- How to choose the best copy trading platform?
- How do I choose the best trading system to forex copy trade?
- Conclusion
- Copy Trading FAQs
How does copy trading work?
In a nutshell, copy trading is exactly how it sounds. That is to say, this popular tool enables you to ‘copy’ the trades of an experienced forex trader.
For example, if your chosen trader goes long on EUR/USD, the same position will automatically be copied to your brokerage account.
Now that I have revealed the best copy trading forex brokers for passive investors, I can dive a little bit deeper into how this investment product works.
As I explain with a simple example shortly, copy trading positions are mirrored at a proportionate amount. This ensures that your copy trading endeavors remain within your preferred budget.
- Some copy trading brokers in this space offer an all-in-one service.
- eToro, for example, is not only a regulated brokerage, but it supports a proprietary copy trading service.
- This means that you can facilitate all of your copy trading needs through a single provider.
Many brokers, however, do not directly support copy trading. Instead, brokers like Forex.com, OANDA, and IG enable you to connect your account to copy trading platforms like MT4.
And in doing so, you can purchase a copy strategy on MT4 and the respective trades will be carried out via your chosen broker.
Ultimately, the overarching objective when copying other traders is to have the luxury of trading forex in a passive nature.
This means that the entire end-to-end process of researching the forex markets and manually entering positions is taken care of on your behalf with little knowledge of the financial markets. You can copy the trades of experienced traders using copy trading software and your own trading account.
How do you copy trade?
The specific copy trading process can and will vary depending on the broker that you sign up with and their trading platforms. In most cases, however, the fundamentals remain the same.
In this section, I explain the core basics of forex copy trading.
Copy trading example
The best way to understand copy trading is with a simple example.
- Let’s suppose that you invest $500 into your preferred forex trader
- Your chosen forex trader goes short on GBP/USD – risking 2% of their trading capital
- This position will be replicated in your copy trading portfolio at a proportionate amount
- In this example, you will allocate 2% of your $500 investment – which is $10
- Let’s say that a few days later, the trade is closed at a profit of 20%
- You will automatically close the trade too and also make 20%
- Your stake was $10, so 20% represents a profit of $2
The above example highlights that a successful strategy can yield passive income.
After all, while you made just $2 on this trading position, you were not required to spend any time researching and watching over the markets. Furthermore, you were not required to make an informed decision on when to enter or exit trades.
Unfortunately, not all copy trading positions will return a profit. On the contrary, if your chosen trader goes on a prolonged losing streak – this will be reflected in your own portfolio.
How do you copy the best traders?
One of the most important parts of the copy trading process is knowing how to select a suitable trader.
I mentioned earlier that eToro offers access to thousands of verified traders, so the likelihood is that there is a trader that meets your financial goals and risk tolerance.
Here’s what to consider when choosing a forex trader to copy:
Type of forex trading strategy
A good starting point is to assess what type of forex trading you wish to copy.
This is best evaluated by the average trade duration of the respective forex trader, which most platforms in this space display.
For instance:
- If the average trade duration is several days (or weeks), then the forex trader is likely engaged in swing trading
- If the average duration is in the minutes or hours, they are likely a scalper or day trader.
Just make sure you choose a trader that best fits your personal strategies and goals.
Past performance
When browsing your chosen copy trading platform, you will have access to a range of statistics linked to the trader’s past performance.
At eToro, for example, you will be able to view the profit or loss each and every month since the trader joined the broker.
This will enable you to assess how successful the forex trader is over a reasonable amount of time.
With that said, you should probably focus on traders that have at least 2-3 years of historical data.
Risk
You should also determine how much risk the respective trader typically takes before electing to copy them. Depending on your chosen copy trading broker, this information is often readily available.
eToro assigns all copy traders a risk rating, from 1 to 10. The higher the score, the more risk the trader generally takes.
You can also evaluate the risk profile by reviewing the maximum drawdown percentages.
This highlights how much capital the trader has previously lost, in relation to the account balance at any given time. In this regard, low-risk forex traders have a modest drawdown percentage.
Is copy trading good for beginners?
In theory, copy trading is good for beginners, as no prior experience in forex is required.
After all, you will not be tasked with performing technical analysis or fundamental research, as would be the case if you were trading forex on a DIY basis.
Moreover, as copy trading is completely passive, you will not be required to manually place buy and sell orders.
This will suit beginners that have little to no knowledge of trading currencies.
Does copy trading really work?
Copy trading is a legitimate tool that is used by many investors from around the world. However, whether or not you will make money will ultimately depend on your chosen trader.
- For instance, let’s suppose that you copy a forex trader that generates gains of 10% in the first month.
- If you invested $500 into the trader, you would have generated a profit of $50. This takes your total balance to $550.
- However, if your chosen copy trader then finishes the second month at a loss of 35%, this will also be reflected in your own portfolio.
- All of sudden, your balance of $550 has quickly been reduced to $307.50.
This is just the nature of copy trading. That is to say, your potential profits and losses will be dictated by the professional traders that you decide to copy.
How to choose the best copy trading platform?
In this section, I offer some tips on how to choose the best copy trading platform from the different options available:
- Proprietary or third-party – eToro offers a proprietary copy trading platform, which means that it hosts all positions in-house. Most brokers, however, instead rely on third-party copy trading platforms, such as MT4.
- Pool of forex traders – You should also ensure that your chosen copy trading platform has a large enough pool of traders. This will give you ample choice when selecting a suitable trader to copy. Make sure there are also plenty of active traders and not just passive accounts.
- Availability of stats – To make an informed decision, you should have access to real-time stats regarding each copy trader. This should include the past performance, monthly ROI, risk rating, and maximum drawdown.
- Fees – You will also need to explore how much your chosen copy trading platform charges in fees. If you are using a third-party platform like MT4, fees are determined by the respective trader.
- Minimum investment – Be sure to assess the minimum investment requirement when selecting a copy trading platform. For instance, eToro requires a minimum investment of $200 for each trader that you decide to copy.
How do I choose the best trading system to forex copy trade?
To give yourself the best chance possible of making money from a forex copy strategy, consider the following:
- Stick with forex traders that have a verifiable track record of at least two years – the longer the better
- Try to diversify as best as possible by copying multiple forex traders
- Only consider copying traders that have a low-risk rating – especially when it comes to the drawdown percentage
- You should also be fully aware of any commission-sharing agreements that the copy trading broker might have in place
And perhaps most importantly – always start off in demo mode when copying a forex trader for the first time.
Conclusion
In summary, I have reviewed a range of popular copy trading brokers and copy trading platforms that enable you to trade forex passively.
While some brokers offer in-house copy trading platforms, others require you to download third-party software – such as MT4 or MT5.
Ultimately, although copy trading can facilitate a passive investing experience, just remember that any losses that the trader generates will be reflected in your own account.
Copy Trading FAQs
What is the minimum deposit for copy trade?
The minimum deposit to copy trade will depend on the broker that you sign up with. At eToro, the minimum deposit is just $10, but you will need to invest at least $200 into your chosen trader.
Can you make money copying trades?
Yes, you can make money by copying the positions of an experienced forex trader. However, this isn’t guaranteed. Ultimately, any gains or losses that the trader makes will be reflected in your own copy trading portfolio.
Is copy trading legal?
Yes copy trading is legal in the US providing that your broker is regulated to trade forex by the Commodity Futures Trading Commission (CFTC)
- Read our eToro Review to see if it's the right broker for you.
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