What is copy trading and how does it work

What is Copy Trading in Meta Trader 5 (MT5)?

Copy trading is a feature in MT5 that allows traders to automatically replicate the trading strategies of more experienced traders. It is especially useful for beginners who may lack the time or expertise to develop their own strategies but want to take advantage of the expertise of seasoned traders. By subscribing to a signal provider, trades are executed automatically in your account, mirroring the provider's trades in real-time.

How Does Copy Trading Work in MT5?

• Signal Providers: Experienced traders share their trading strategies and signals. They often charge a subscription fee for allowing others to copy their trades.
• Subscribers (Copy Traders): Traders who subscribe to these signals automatically copy the trades of the signal provider. This means any trade opened or closed by the provider is replicated in the subscriber’s account.

How to Use Copy Trading in MT5

Follow these steps to start copy trading in MT5:

1. Set Up Your MT5 Account:

   • Make sure you have a live trading account with a broker that supports MT5.
   • Deposit funds into your account to ensure you have enough capital for trades.

2. Access the 'Signals' Tab:

   • Open the MT5 terminal.
   • Go to the 'Tools' menu and select 'Signals'. Alternatively, find the 'Signals' tab in the Toolbox window at the bottom of the MT5 platform.

3. Browse Available Signal Providers:

   • The 'Signals' tab displays a list of available signal providers.
   • Review key information such as the provider's performance, growth percentage, number of subscribers, and subscription fee.
   • Look at metrics like maximum drawdown, profitability, and the number of trades executed to assess the risk and potential reward.

4. Choose a Signal Provider:

   • Select a provider that matches your risk tolerance and trading goals.
   • Click on the provider's profile to see detailed statistics and trade history.
   • Review any feedback or comments from other subscribers for additional insights.

5. Subscribe to a Signal:

   • Click the 'Subscribe' button on the chosen provider’s page.
   • You’ll need to enter your MQL5 account login credentials (or create an MQL5 account if you don't have one).
   • Follow the on-screen prompts to complete the subscription process.

6. Set Up Copying Parameters:

   • After subscribing, you can customize the trade settings to manage risk:
     • Lot Size: Decide what portion of the provider’s trade volume you want to replicate.
     • Stop Copying Level: Set an equity stop level, which will stop copying trades if your balance falls below a certain level.
     • Risk Management Settings: Adjust parameters like the maximum allowed drawdown or lot multipliers to align with your risk profile.

7. Monitor the Performance:

   • Once set up, trades will be copied automatically to your account.
   • You can monitor the performance through the 'History' tab or by viewing the 'Signals' tab to see how the strategy is performing.
   • It’s advisable to keep an eye on your account to ensure the copied trades are performing as expected.

Benefits of Copy Trading in MT5

• Timesaving: No need to analyse the market or monitor charts continuously.
• Access to Professional Strategies: You can leverage the experience of successful traders.
• Diversification: Subscribe to multiple signal providers to spread your investment across different trading strategies.
• Automated Execution: Trades are executed automatically, eliminating the need for manual order placement.