Quick Guide To Mirror Trading

Mirror trading has become an extremely popular form of online trading over the past decade and in this quick guide we discover why.

Most people think that mirror trading is the same as copy trading or social trading, but there are subtle differences that you need to be aware of.

In this article, we explain what it is, why people love it, the differences between mirror trading, copy trading and social trading, and we also list some brokers that offer mirror trading platforms.

What is Mirror Trading?

GraphicsPut simply, mirror trading is a form of online trading that allows traders to copy the trades of others, in a real-time trading environment. Mirror trading is particularly popular for those that are new to online trading and hoping to learn from the best.

No intervention is required from the trader who is copying the trades, as the platform does all the work for you. All you have to do is create a trading account and login to check your account balance from time-to-time.

By definition, mirror trading is seemingly identical to copy trading, with one main difference – mirror trading is fully automated, copy trading can be manual (if you choose for it to be).

Best 3 Mirror Trading Platforms in 2021:

Broker     Official Site   Max. Leverage Regulations Min. Deposit    Spreads From Review
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400:1 $100 From 0.9 pips
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500:1     $200 From 0.1 pips
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See Deal >
500:1 $100 From 0 pips
Review

How Does It Work?

Generally, you will create an account, login and then be able to see a bunch of ‘Master’ traders. Master traders are the experts or successful traders that you will be able to copy.

Once you have found one or more master traders that you would like to follow, take the time to view their recent trading results, strategies and most importantly, their risk appetite. If they are aligned with your trading objectives, then you can choose to mirror all of their upcoming trades.

Once you have linked your account to theirs, when they trade, so do you.

The Pros of Mirror Trading

Like all forms of online trading or investing, mirror trading has many benefits as well as weaknesses and risks.

Ease

Mirror trading, whilst not without its risks, is relatively easy to get into. This is particularly beneficial for beginner traders who are trying to learn from the best, without having to sit on the side lines for months on end.

Wide Range of Markets To Choose From

Online trading is your gateway to the world’s financial markets. Most trading platforms will grant you access to all the different asset classes, including stocks, indices, forex, cryptocurrency, commodities, bonds and more. Take your pick!

Control of Your Account

When you sign up for a copy trading account, the account will be in your name and you will have full control of it. This differs from traditional investing, where you would send your money to a fund manager, who would invest on your behalf.

Proportionality

Mirror trading allows for proportional replication of a trade signal. For instance, if a signal comes through that works on a 200k trade size, but your account is only 20k, the trade will be replicated but on a smaller scale (a tenth of the size). This means you do not miss out on the trade!

Diversification

This form of trading opens doors for a more diversified trading portfolio. Simply copy some traders who are experts in asset classes you have no clue on and potentially turn a profit.

Check Past Performance

You have the ability to follow and mirror trade only those that align with your trading objectives and plan. What’s more, you can check their past results to see if they’ve been successful or not, and then decide whether to copy them or not.



The Cons

Trust

Can you trust someone that you have never met to trade with your money? If you wish to mirror trade, you will need to accept that you may lose money copying the trades of someone that you have never met (and will likely never meet).

You May Lose

Without doubt, this is your greatest risk of all. You are relying on master traders to help you turn a profit but even experts have bad days. Ensure you only trade with funds that you can afford to lose.

Complacency

Never become complacent with any form of online trading, mirror trading included! It is easy after a few profitable trades to think that you are invincible, but you or your trading account are not.

Control

Mirror trading is great because the trades are executed automatically for you. However, it also means you are placing a lot of trust in the master trader.