AuthorBy Chris CammackAuthor InformationUpdated: October 21, 2020

Copy trading, or social trading, is a combination of social media and Forex trading. It allows traders to invest their trading funds with other successful traders, usually for a small fee or a cut of the investing trader’s profit.

The biggest advantage of copy trading is that it allows beginner traders to profit from the sophisticated trading strategies used by professional traders. The downside is that beginner traders may end up following risky trading strategies without fully understanding the consequences.

Most Forex brokers now offer some form of copy trading function, but there are major differences between the products they offer and how they integrate into trading platforms.

The best copy trading and social trading brokers will offer a clear explanation of how the copy trading platform works with detailed metrics on each trader offering their services. These metrics should include the return as a percentage over time (days, weeks, months, years), largest drawdown (peak to trough decline), average daily profit, the total time the trader has been active and a risk rating.

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Best Copy Trading Forex Brokers

Last updated on 21 Oct 2020
Updated 21 Oct 2020
by Editorial Director Chris Cammackby Chris Cammack
Chris Cammack
All Brokers Regulated
All Brokers Regulated
by Trusted Authoritiesby Trusted Authorities
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1
AvaTrade
Min. Deposit
GBP 100
4.184.18
Min. Spread
0.90 pips
Trading Platforms
Deposit & Withdrawal Methods
Overall Rating
11110.54.18/ 5
AlertAccepts UK Clients. Average spread EUR/USD 0.9 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & MT5 platforms supported. AvaTrade Group regulated by ASIC, FSCA, B.V.I FSC & FSA. 72% of traders lose money with this provider.
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Good value, beginner-friendly and hugely respected all over the world, AvaTrade is one of the most reputable brokers in the industry. With support for the leading trading platforms and top-quality multilingual support, AvaTrade has built a brand on a solid reputation and continues to add to that reputation with the recent addition of AvaProtect – an automated loss-protection tool – to its product lineup.

AvaTrade offers trading in Forex, commodities, cryptocurrencies, exchange-traded funds, options, bonds, and equities and is a good choice for any type of forex trader ranging from beginners to scalpers and intraday traders to long-term traders.

Pros
  • Good for beginners
  • Well regulated
  • Low minimum deposit
Cons
  • Dealing desk
  • Limited education
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2
FXTM
Min. Deposit
GBP 10
4.234.23
Min. Spread
0.10 pips
Trading Platforms
Deposit & Withdrawal Methods
Overall Rating
11110.54.23/ 5
AlertAccepts UK Clients. Average spread EUR/USD 1.90 pips on trading account with lowest minimum deposit. MT4 & MT5 platforms supported. FXTM Group regulated by CySEC, FCA, FSCA and FSC. 80% of traders lose money with this provider.
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By keeping the focus on beginners looking for reasonable trading conditions, the FXTM team of educators and analysts have succeeded in creating a welcoming environment for new traders. Additionally, FXTM is one of the few brokers with 24/7 support, allowing new traders to get set up on weekends or holidays. 

All five FXTM accounts are available as demo accounts and, for the absolute beginner, FXTM has a great deal of training material to help new traders get started. Once you are ready to trade, the Standard Account has a minimum deposit of 100 USD and spreads start at 1.3 pips. FXTM also offers a Cent Account where the minimum deposit if only 10 USD but the spreads will be wider. 

Pros
  • Good for beginners
  • Excellent education
  • Well regulated
  • Low minimum deposit
Cons
  • Expensive withdrawals
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3
Pepperstone
Min. Deposit
GBP 200
4.514.51
Min. Spread
0 pips
Trading Platforms
Deposit & Withdrawal Methods
Overall Rating
11110.54.51/ 5
AlertAccepts UK Clients. Average spread EUR/USD 0.09 pips with 7 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5 & cTrader platforms supported. Pepperstone is regulated by the FCA, ASIC, and the DFSA. 79.3% of traders lose money with this provider.
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Founded in 2010, Pepperstone is an Australian ECN broker known for tight spreads, ultra-fast trade execution and broad platform support. Pepperstone’s award-winning, 24-hour support provides the foundation for its excellent customer service, where personalised assistance is available via several methods.

As our highest rated pure ECN broker, if you want to pay a small commission for tighter spreads, you won’t find a better broker than Pepperstone.

Pros
  • Well regulated
  • Tight spreads
  • Great platform choice
  • Wide range of assets
Cons
  • High minimum deposit
  • Limited market analysis
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4
FxPro
Min. Deposit
GBP 100
4.214.21
Min. Spread
0.60 pips
Trading Platforms
Deposit & Withdrawal Methods
Overall Rating
11110.54.21/ 5
AlertAccepts UK Clients. Average spread EUR/USD 1.50 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5, cTrader and FxPro proprietary trading platform supported. FxPro Group is regulated by FCA, CySEC, FSCA, and the DFSA. 77% of traders lose money with this provider.
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FxPro is one of the most respected Forex brokers in the industry. Regulated by the FCA and CySEC and with over 870,000 client accounts in 173 countries, FxPro is a truly global powerhouse.

FxPro offers a no dealing desk execution model on MT4, MT5, cTrader and a browser-based platform. A reasonable 100 USD opening deposit and outstanding customer service are combined with competitive spreads – often as low as 0.6 pips – to match profitability with security.

Pros
  • Well regulated
  • Great platform choice
  • Tight spreads
Cons
  • Limited education
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5
FXCM
Min. Deposit
GBP 50
4.134.13
Min. Spread
0 pips
Trading Platforms
Deposit & Withdrawal Methods
Overall Rating
11110.54.13/ 5
AlertAccepts UK Clients. Average spread EUR/USD 1.30 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & Ninja Trader platforms supported. FXCM is regulated by FCA, ASIC, and the FSCA. 69.66% of traders lose money with this provider.
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Founded in 1999, FXCM is an FCA-regulated market marker with tight spreads and support for the MT4 platform.

Though it has a strong focus on educating new traders, FXCM also offers innovative trading tools and a wide range of specialty platforms for experienced traders. Customer support is excellent and FXCM’s flagship platform, Trading Station, has won multiple awards for its intuitive layout and customisability. Traders will also benefit from FXCM’s enhanced execution model across all popular currency pairs and CFDs.

Pros
  • Well regulated
  • Great platform choice
  • Excellent education
  • Innovative trading tools
Cons
  • Limited demo account
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6
eToro
Min. Deposit
GBP 200
3.333.33
Min. Spread
1 pips
Trading Platforms
Deposit & Withdrawal Methods
Overall Rating
1110.503.33/ 5
AlertAccepts UK Clients. Average spread EUR/USD 1 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. Only eToro proprietary trading platform supported. eToro is regulated by CySEC, FCA, and ASIC. 75% of traders lose money with this provider.
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eToro pioneered social trading in 2012 and has been widely recognised for making the social trading experience as smooth and engaging as possible. It has since grown to become one of the largest Forex brokers in the world, and its success has made it clear that many traders view an active and helpful community as an essential part of their trading strategy.

eToro has won multiple awards for innovation, and as cryptocurrencies have become more popular, has introduced a wide variety of cryptocurrency CFDs to traders.

eToro’s trading model is quite different from most other brokers and may take some time to get accustomed to, but if you are looking for a fun and simple social trading experience, then eToro is the broker for you.

Pros
  • Well regulated
  • Good for beginners
  • Innovative trading tools
Cons
  • Limited education
  • Wide spreads
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How does Copy Trading Work?

Copy trading requires two traders and a Forex broker, which provides the platform for them to co-operate. One trader is the provider, or manager, and they will make their trading strategies available for others to follow. The other trader, or investor, selects the provider they wish to follow – usually for a fee or a cut of the investor’s profits. The broker provides the social platform for the provider and the investor to meet and co-operate, brokers also provide the trading platform that the provider will use to trade.

Most copy trading platforms will also display the manager’s investment return, risk profile, length of experience and trading style. It is essential to also examine the manager’s largest drawdown, this the largest single peak to trough decline in the manager’s trading account. If you are thinking of investing a smaller amount than the manager’s largest drawdown you are putting yourself at serious risk of losing all your capital.  Controls for investors are also a key feature, allowing you to choose how much money to invest with a provider and which strategies to follow.

Is copy trading legal?

Yes, copy trading is legal in almost all jurisdictions. Prior to the explosion in social trading, copy trading was only available via a managed account. Managed accounts required a power of attorney and a large account balance, and so are unpopular amongst typical retail traders. Copy trading, or social trading, on the other hand is considered self-directed by most regulators, as traders who use this function always select the trading system to copy.

A brief history of Copy Trading

Prior to the merging of Forex trading and social media, the only form of copy trading available was managed account trading. While managed accounts are still an integral part of institutional trading, on a retail level they have been almost completely eclipsed by the rapid rise of copy trading.

Also called mirror trading, auto trading and social trading, copy trading began in the late 2000s with the advent of the eToro and ZuluTrade platforms. eToro has since become one of the most successful Forex brokers in the world, purely based on the strength of their social trading platform, while ZuluTrade is one of the most popular copy trading platforms in the Forex community.

The success of these early pioneers means that most major brokers now offer some form of copy trading or social trading, either through their own platforms or via a third-party, such as ZuluTrade, Mirror Trader or Myfxbook.

Which broker is the best for Copy Trading?

eToro, FXTM and AvaTrade are the best brokers for copy trading.

eToro’s unique social trading platform allows for users to copy each other’s trades and share trading tips. Easy-to-use and web-based, the eToro platform has won many awards over the years for innovation and simplicity. With over 6 million clients, eToro has successfully made social trading an integral part of Forex industry.

FXTM run the FXTM Invest platform, which connects investors with Strategy Managers. Strategy Managers are graded on several metrics and investors can filter Strategy Managers to find the right combination of return and risk they feel comfortable with. Investors only pay a fee on successful trades.

Avatrade offers multiple direct and indirect copy trading options. AvaTrade has also partnered with the Mirror Trader and ZuluTrade platforms to offer a wide range of copy trading functionality. Mirror Trader allows investors to switch between manual copy trading, semi-automatic trading, or automatic trading when following a provider. ZuluTrade is a community of providers, who have been ranked using various practical parameters including maximum drawdown and average profitability.

How do I choose the best copy trading system?

The best copy trading system will not always be the most profitable. It is important to look at a provider’s long-term strategy and risk management to make sure these align with your account balance and goals. Aggressive strategies may make money in the short-term – and may even be successful for those with larger account balances over the long term – but can lead to account wipeouts for those with smaller balances.

Like with all Forex trading, it is important to do your own research and manage your risk appropriately.

Final Word

While a relatively recent method of Forex trading, copy trading has fast become one of the largest. The advantages are obvious for beginner traders, and many experienced traders also swear by it. But, like all Forex trading, it must be entered into with education, caution and a thought for risk management.

References

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Trading Forex and CFDs is not suitable for all investors and comes with a high risk of losing money rapidly due to leverage. 75-90% of retail investors lose money trading these products. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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