If you’re a newbie in Foreign Exchange trading, there are more than a few things which you need to learn first before going for a transaction in this market. Multiple variables come into the picture when it’s about profiting from this market. Taking these variables into consideration with the right set of technical tools and indicators is a difficult proposition for a beginner like you. This is just where Forex mirror trading functions come in, giving newbies like you a proper way to go ahead with the transactions.
Forex Mirror Trading:
This is just another name for automated trading platforms. These platforms are coming up as quite a popular alternative for beginners and even professional traders around for investing in this market.
The basic idea is that you’ll already have a transaction, rather entry and exit points as per a strategy in front of you to go forward and invest. All you have to do is copy that trade and invest in it. These setups are where you copy a trade as per your preference, a trader which some other trader is hosting. All that you’re liable for in case of profits is a certain percentage of it to that trader from whom you’re copying.
To get the best out of this setup, here are some tips and tricks or rather suggestions which can help you a long way.
5 Tips to get the best of Forex Mirror Trading for a First-Timer:
1. Keep an eye out for Risk-Reward Pointers:
This format of trading is just to have a proper trade in front of you with only the investment part of it all pending. But, it’s just like any other Forex trade. You’ll either profit or lose out. So, these trades will have certain risk-reward pointers. Ponder on whether a transactions too risky or if it provides too flimsy profits in return before investing.
2. Covering Loss Percentages as well:
You know by now that you’re going to give up a certain portion of your profits in lieu of the trade. To continue, there are certain transactions and traders who additionally cover up for any potential losses as per percentages. More often than not, trades with high profit percentages provide these functions.
3. Understanding the Trade:
A worthwhile pointer which should actually come first, there’s much more to a probable transaction than just profit/loss reward structures. Consider the Forex mirror trade itself first, read it as to how it looks to give you a positive ROI in the first place.
4. Accounting in Interest Rates for Long Trades:
If you’re going for a long trade, you’ll need to keep your currencies in overnight and that will obviously attract interest rates. So, before accounting for your overall probable profits from a long transaction, gauge the amount you’re liable to pay up as per interest rates.
5. Provider Portfolio:
The trader providing you the trade in the first place is a provider while you’re the copier. Know who you’re copying your trades from before going forward with it. Not every single pro out there can give you one properly profitable trade every time out.
To conclude, Forex mirror trading does make trading easier for a beginner like you. But it’s not like you’re going to go headfirst into it with a blindfold. Always know what you’re getting into if you want to profit.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.