One of those ways is providing strategies (or better-said trades) for other traders to copy. This is generally known as copy trading and can be very profitable for both the strategy provider and the copier. For strategy providers, it is a great way to boost your earnings that can range from very little at the beginning to something that can be your main source of income once you amass enough followers.
In the previous article we discussed copy trading from the perspective of the copier, and here, we’ll discuss the other perspective, namely how already successful traders can use copy trading to generate a nice additional income and at the same time help others to make money too.
Have a good strategy
Obviously, the number one step for becoming a strategy provider is to have a good strategy that is profitable over a longer period of time.
Now, this is not required by any copy trading service or platform since they can’t know in advance how profitable your strategy is, but on most platforms, all your trades are made public so if you don’t show that you are profitable no one will follow you or copy your trades.
Our website is dedicated to helping the common retail trader, so you can find plenty of resources throughout our site that can assist you in finding or developing a profitable strategy.
People will not copy you without enough trading history
After you know that you have a profitable strategy, you then need to trade with it for some period before people can notice you and trust you. Everyone will require a different length of trading history before they can trust you, but generally, you will need to have at least several months in which you generated profits for people to begin to trust you.
The longer you successful trading history is the better and the more followers/copiers you will get. And of course the more copiers you have the more money you will make.
Avoid risky strategies and large losses
You may have a very successful strategy that is too risky. And, it may even work for a while, but eventually, it is likely to blow up and your followers will be gone in no time. No followers means no money for the strategy provider. In addition, people can notice that your strategy is too risky by looking at your track record and many won’t even follow you in the first place.
So, avoid risky strategies and avoid large losses in your trading history as much as possible. You need to build trust with your followers and over time grow the number of people that are willing to copy your trades. One fat loss that is bigger than your average monthly gain is a big turn off for people that look to make some money by coping trades.
Evaluate the different options (copy trading platforms)
Finally, this is the part where you take your share for the trades and strategies you provide.
The easiest and cheapest way to start providing Forex strategies is by signing up with some of the many social trading platforms such as Zulutrade, eToro, myfxbook etc. These platforms are a great option for starting, but there may be noticeable delays between trade execution on your account and execution on your followers’ accounts. Every copy trading network has its own terms and conditions and you will need to read them before signing up. Also, your rating will depend on things like profits generated and risks taken so be sure to understand that part first in order to get a better rating on their public lists.
The best thing about copy trading for both the manager and the investor is probably the fact that you don’t need to deposit money at the copy trading service. Instead, you can use any of the brokers on their long list (a lot of professional brokers support copy trading) and basically you are still trading with the broker of your preference and use their full features.
The more advanced options to provide strategies on Forex would be to create your own signal/copy trading service. You can use the popular Metatrader platform for this and an expert advisor will allow your followers to directly connect to your account and copy your trades. This is a more versatile option which offers you more control and often much better execution between the connected accounts.
Finally, another option to provide strategies on Forex are PAMM accounts which are something similar to copy trading. You can read more about PAMM accounts and the different opportunities that Purple Trading offers here:
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