Many new traders dream about making big profits and living off their trading income but simply don’t have the time to trade consistently because of the demands of every-day life such as work and family. However, these traders can still achieve their trading dreams without even needing to be in front of the charts or to place a trade.
What is Mirror Trading?
Mirror (or Copy) trading is a software solution that allows new traders to benefit from the experience and success of professional traders in a simple and straightforward manner. The beauty of this is that traders can profit from experienced professionals without needing to spend endless hours in front of the charts, analysing markets, and executing trades themselves.
Traders need simply register for mirror trading and connect their existing Orbex trading account to their chose trading provider. Once connected, each trade the trading provider executes will also be executed in your account, however, the trading provider cannot access the funds in your account, and mirror trading can be stopped at any time.
FXStat is Orbex’s mirror trading partner and boasts the fastest growing network of traders. Traders can select from a list of traders and systems and view their historical performance to find a trader or strategy that they like. The FXStat performance dashboard displays full performance metrics given a detailed breakdown and analysis for traders to use when selecting which system to follow.
With over 250,000+ traders listed on the site, there are plenty of options to cater for all risk profiles and trading types such as high frequency, low frequency, high risk, low risk, manual, systematic.
With such a wide selection of trading styles and risk profiles, it can be quite daunting for new users; so here are some quick tips that can help you get the very best out of mirror trading.
Key Tips For Success With Mirror Trading
1.Don’t just focus on profit, watch drawdown also
Many new users will instantly begin their search by scouring the list for the traders with the highest percentage returns. This makes sense because, of course, you want to make money from mirror trading. However, you need to be careful that you don’t expose yourself to unnecessary risk. The drawdown percentage refers to the biggest peak–to–trough decline in performance. This shows you what the biggest sustained loss was in that trader’s performance and is a vital statistic when choosing a trader to follow.
For example, if a trader has returns of 90% and a drawdown of 30% this means that at some point over the measured period, that trader lost 30% of capital. For example, the trader might have gone from 0% up to 60% over a year, then back down to 30% over the next year and then up to 90% over the following year. Drawdown is important because that is the amount of loss you should expect to experience when using the system. Some systems boast huge returns but also reckless drawdowns as high as 80% or more. Unless traders have a very high-risk profile, it is far better to look for the lowest drawdowns possible as you will have a far lower chance of losing your money.
2. Focus on trading history
Again, instead of just focusing on overall trading returns it is important to consider other statistics. A very high-risk system can post impressive results in just a one month period, but there is no way of knowing if that one month was just an anomaly that benefited from a few lucky wins. It is best to stick to traders who have as much trading history as possible. If a trader has 4 years worth of history, you will have a much better understanding of their distributions than a trader who just has a one-year history.
3.Stick to verified accounts
Verified accounts are real trading accounts that have been verified by a broker. Some systems are run on demo accounts as hypothetical models, and their actual results can vary significantly in live trading conditions. It is far better to stick to verified accounts which have actually performed in real markets.