Copy trading is a great way to enter the markets, have some fun and make a little money. It takes all the hassle of having to choose assets, analyze markets and speculate direction while allowing you the opportunity to make money. The thing is, not all copy trading is the same. Not only are there differences between platforms, there are differences in styles of copy trading and multiple avenues of trading for you to choose from. The answer to the question “how to copy trade binary options” is very carefully. While it is possible to reduce risk, it is also possible to increase it so a little education can go along way toward helping you have a satisfactory experience. The most important thing, as with all forms of trading, is to choose the method best for you.
The easiest way to copy trade is of course to follow a signal service provider, auto-bot or or other automated system. These are websites and programs that generate signals and then either send them to you or execute them directly into your account. These are OK but not my top choice. Automated trading takes all the fun out of the market, you have no control of the trading and are at the mercy of the system. It is possible to make money with these but it is not the norm. If you really want to use an automated system to generate signals I suggest using something like the Boss Indicator. The Boss Indicator is a custom indicator for MT4. It is based on over 100 individual indicators and shows the probability of the next candle being bullish or bearish, perfect for binary options. The tool is great because it generates probability signals based on 5 years of past data and also allows you to use your own judgement on whether or not to enter a trade.
Is It Really Copy Trading?
Other methods of copy trading involve following the trades of actual traders, a method I like much better. There are generally two different styles and they depend on the platform and how expiry works. The first kind I call “spot copying”. This is is where live trades are posted as they are made. Each trade is listed with the name of the trader and some data including the traders win rate, obviously you would want to copy traders with the highest win rates. If you like a trade that you see you can copy it. This will place a trade on the same asset and all you have to do is enter a trade amount. Expiry for this style of copying is usually short, like 60 seconds up to an hour, and perfect for those who like that kind of trading because it is in effect nothing more than a signal to enter a short term trade. Binary1000.trade is one place where you can trade like this.
The “managed account” style of copy trading is much more prevalent and my favorite by far. This style lets you pick traders from a leader board and follow them in your account. The number of traders that you can follow at one time will vary from one platform to another but is generally only limited to the size of your account. I like this style because it is very similar to trading ETF’s or other risky, high return investment vehicles based on the underlying performance of the “asset”. The asset in this case is the trader or traders you follow. Their performance becomes your performance when you follow them. Most leader boards will allow you to filter traders by asset at least so you can get a form of diversification in your account as well.
A good copy trader can make a lot of money by keeping up with the performance of each trader and making adjustments to their account as needed. . . hence the reason I have term it managed binary options copy trading. The best platforms will allow fine tuning so that you can limit the size, number and duration that you follow in each trader in your account. The top platforms at this time include AnyOptions CopyOp, SpotOptions iFollow (found at a number of top brokers) and CTOptions Binary Replicator.
Dashboards Can Offer More Advanced Social Binary Options Copy Trading
Now, if you really get into copy trading you might be interested in a more advanced platform like the BOAT (Binary Options Auto Trader) or Trade4Me.com. These are both advanced, stand alone, third party social trading platforms that each have a set of unique features. The BOAT, not to be confused with an automated trading system of the same name, is at first an auto-trader, but is also a signal generator that can be linked to MT4. Not only that it can also use your own custom indicators, all you have to do is ask the company when you sign up, they will be happy to help you.
The BOAT is also a platform for social trading because it allows traders to post trades, and for you to follow them. The Trade4me.com copy trading platform is similar but focused on copy trading. It is a dashboard where you can hook up with top traders, follow them and have their trades executed in your account. The beauty, and main difference over broker run copy trading, is that you can link multiple accounts and are not limited to only one broker. Another difference is that trader profiles are much more complete.
I’m sure by now you get the idea of how to copy trade. The next step is to check out the sources I have listed and see how each may or not fit your needs and wants. After that comes the hardest part, and the most fun… choosing a trader to follow. It may seem easy, and can be, but offers its own unique challenges. Look out for my next piece which will go over who, how, where, why and when to follow.