Copy Trading
A feature that automatically replicates another trader's positions in a user's own account, generally in proportion to the user's own allocated funds.
Copy trading is a feature, generally offered by a specific platform, that automatically replicates another trader's positions — their trades, entries, and exits — in a user's own account, generally in proportion to however much of their own funds the user has allocated to following that trader.
Copy trading carries a real, distinct risk worth understanding clearly: a copied trader's historical track record is no guarantee of their future performance, and a user copying trades is still exposed to the full risk of the underlying positions, including leverage, even though they aren't personally making each individual trading decision.
Examples
- A user copy trading another trader's leveraged positions is exposed to that leverage's full risk, even though they aren't personally deciding each individual trade.
- A copied trader's past performance, however strong, is no guarantee of their future results — a real risk worth weighing before allocating significant funds to copy trading.