Is Copy Trading A Scam?
One of the hottest new trends among binary options brokers today is Copy Trading. You may know it under Social Trading. There are many skeptics out there who question its validity. They want to know if Copy Trading is a scam.
As with many things in the world today, scams do exist within otherwise legitimate arenas. That doesn’t mean that the entire industry is a scam. In the case of Copy Trading, there are many brokers involved with it that are really offering what is known as ‘copy trading’. This is where the biggest chance of a scam exists.
There is a definite difference between social and copy trading. Some brokers tend to whitewash these differences a little in order to get business. One of the distinctions of copy trading is when they utilize ‘trader sentiment’ indicators. These indicators supposedly let you know which way most people are trading. This is truly a platform for copy trading. It’s a feature that enables you to search within a list of traders to see which ones have the best success rates, and then you can ‘follow’ them while adding their trades to your account.
In this type of copy trading you will seldom get any information regarding the individual traders themselves, nor will you be able to contact them. All you get is the chance to copy what they do.
The Mechanics of Copy Trading
Leader-boards are used to entice traders to follow the traders who are leading in certain platforms. The people who are the ‘copiers’ look at the leader-boards to find traders they believe will be good to follow. Once they make their selection those trades are put into effect in their own account. This gives them a way of piggy-backing off traders who already know and understand how to trade. It’s not a bad idea, unless you get scammed. If a person can find a way to deal only with trusted brokers on trusted platforms, they can avoid the scams. Take a look at our Homepage.
Copy Trading Explained
Copy Trading is where social media and Forex trading ‘mesh together’. It gives traders the ability, along with their social communities, to connect, post, chat, and follow other traders. Depending on the platform they choose, this can mean receiving signals, tips, updates, and automated trades in their accounts.
What happens is this – successful and seasoned traders post their trades so other traders can ‘follow’ them. It is very similar to what is known as an ‘SSP’, or signal service provider. It’s a way for social traders to get various trading signals all week long. The signals may be generated by any form of analysis and can be run by a single trader or several. The subscribers will pay a fee and then start receiving their tips via email, texts, and newsletters.
All it takes today to become one of the SSPs, is to start posting your tips. Copy Trading has grown in popularity and evolved to give new traders the benefit of following seasoned and experienced traders via social media and electronic trading.
Where The Scams Come Into Play
The reason it’s so hard to be sure about which platforms are reliable and not scams, is because new Copy Trading platforms are showing up every day. This is still the Internet, so scammers will always be lurking around where people are dealing in money matters.
The trick is to find trustworthy trading platforms that are already established and have good reputation (that you check out, not just take what is said on the site at face value). There are a few that have already made a good name for themselves like –
and again, new ones are popping up all over the net on a daily basis. That’s why you need to have a system or guideline in place to help you weed out the potential scammers.
Here are some of the basic features you’ll find on most legitimate platforms –
(a). If they make it FREE to join or to open up a demo account it’s a good sign. You can sign up and start searching for traders to follow once your account is approved.
(b). Most of these Copy Trading Platforms aren’t Forex brokers. That means you’ll need a compatible account before you can trade. However, there are a few brokers beginning to offer Copy Trading so you can check that out while you’re there.
(c). The Traders are listed on some form of a leader board. You should have the opportunity to view a ranking of signal providers that are ranked by system type, asset, win/loss ratios, or risk tolerance.
So is Copy Trading a Scam?
It seems clear that Copy Trading IS NOT a scam but there are scammers out there. You should never take any profile at face value. Be diligent in your investigating before you put up your hard-earned money.
Even the best of things online can be overshadowed by unethical, heartless, and greedy people. Copy Trading is no different. However, when done correctly it can be an exciting and fun way to trade. Once you’ve located a trustworthy provider and a good platform, you too can be successful with Copy Trading.
The concept of Copy Trading is solid and very appealing. Keep in mind that the people who are successful at trading have developed skills over the course of many years. You should be patient in your search to find a reliable trader to ‘follow’, whose merits you will trade on. Patience and due diligence are key to experiencing success with Copy Trading.