Mirror trading, like other forms of investing, also has advantages and disadvantages, risks and opportunities.
One of the biggest advantages of mirror trading is that unlike what happens with other traditional forms of investment such as forex trading, bitcoin trading, CFD trading and commodity trading, mirror trading does not sell your capital to third parties. Hence, there is no need to transfer your money to a provider.
To start investing, you will need to open a trading account by entering your personal details and then paying a trading capital, which, however, will always be managed and controlled by the operator, rather than being managed by another entity.
Beginners who approach the trading world, other than automatic trading, find it difficult to control their emotions. Investing in the financial markets is very stressful and can have a huge emotional impact on people.
Mirror trading, unlike cryptocurrency trading, for example, partially eliminates this problem, because it is not the operator who decides how and when to open or close a position, but the chosen strategy.
In the beginning, it was only possible to mirror the trade in the forex market. However, over time, day trading platforms have also evolved and their offerings have expanded. Today you can also find mirror trading services for CFDs, futures, stocks and options.
One of the main advantages of mirror trading is certainly the proportionality of the signal replication. Simply put, if the strategy works on a $ 100 account, but we only have $ 10, the trades cannot be the same size.
With mirror trading, on the other hand, we have several options available to replicate the strategies, fixed or proportional, both created to allow traders to replicate trading signals with the correct amount depending on the size of their capital.
In the forex world, automated trading apps or so-called EAs are very popular. This is software that can trade automatically, which is installed directly on the trading platform.
The main problem with these solutions is that it is never possible to know their effectiveness in advance. In mirror trading, on the other hand, even if there is no certainty of a future return (unfortunately, we will never have it, anywhere and anyway), at least you have a vision of the real performance of the strategy that has been laid down to that point.
Investing with Mirror Trading means full control over your capital and therefore the ability to manage risk based on your needs.
Markets change direction often and very quickly. Automated strategies are usually not that responsive and do not adapt to such changes. For this reason, in most cases, they can only generate good profits under specific market conditions.
Evaluating the performance and effectiveness of a strategy is not easy. Understanding whether we are making a profit or a loss is easy, and less how the profit is generated. In other words, to make a profit, you have to take some risk. Many traders, especially novice ones, often find it difficult to identify what risks are and what they entail.
After evaluating performance and risks, the next step is to translate these evaluations into decisions. In practice, based on our objectives and the risks we are prepared to do, we must learn to translate these choices into operational decisions and create a diversified portfolio to achieve our objectives with the least risk and in the shortest possible time. to achieve.
Today, the platforms for mirroring, social and copy trading are very similar, because the concept is always the same: giving the trader the option to choose who trades himself.
By the way, the best mirror trading platform and probably the most popular is without a doubt Earnex. As mentioned above, this operator was a real pioneer in this field.
In addition, Earnex is one of the few online platforms operating in Italy that offers an original mirror trade, recognized worldwide as the best in quality. The trading library is very extensive, giving traders a wide choice.
As mentioned earlier in this article, the concepts behind mirror trading and copy trading are very similar. In some cases almost identical.
Online it is possible to consult a whole series of guides to better understand how to copy or trade socially. Consulting an online trading course, free or paid, can be an excellent starting point for any investor, especially beginners.
In addition, we advise anyone approaching this world to start investing their capital only after they have had proper and sufficient practice. Earnex, for example, offers the possibility to trade in demo and thus use virtual funds.
For any other clarification, suggestion or further information, write us in the comments below and we will reply as soon as possible. In the meantime, we wish you a lot of trade!