Copy trading South Africa is on the rise according to research in South Africa. That is why we’ve decided to write about the best Forex copy trading platforms and brokers in South Africa. Most South Africans who want to get into trading don’t know how to go about it. Besides, it is likely that you are one of those people. Therefore, you will decide to take “the easy way” and opt for copy trading in South Africa.
Best Forex Copy Trading Platforms And Brokers
HYCM Markets
Min. Deposit: $100
Best Forex Broker
CM Trading
Min. Deposit: R 3000
Best Forex Broker South Africa
Markets.com
Min. Deposit: R 1500
Best 2021 FX Broker
FXGM South Africa
Min. Deposit: $200
Top FX Broker in SA
The big advantage is that you only have to fund your account, there is nothing else to do. You don’t have to do any analysis, you just have to copy the trader you have chosen to follow. Thus, you will make the same profitability as the chosen trader, doing almost nothing. On the other hand, there are some big drawbacks that we are going to see in this copy trading South Africa comprehensive 2021 guide.
What is Copy Trading?
Copy trading has advantages and disadvantages. We will obviously list them for you. So, at the end of the article, you will be able to know if Forex copy trading in South Africa is for you or not.
But before that, it’s important to understand how copy trading works in South Africa. After all, what is it? Is it a form of social trading? Can we combine it with personal trading? Is it a good thing to use it? We will answer you in the best possible way in this guide.
So, copy trading is actually the fact of entrusting your capital to a trader who will take care of growing your capital. He deals with technical analysis, fundamental analysis and all other analysis factors. Following his observation, the trader will put buy and sell positions on your account.
On your side, you do nothing because there is absolutely nothing to do. You pay the trader to take care of 100% of the tasks. At the end of the month, this trader will have generated more or less profit for you (depending on the quality of the trader). You can then decide if you want to transfer the money to your bank account or if you want to leave it in your account to take advantage of the accrued interest.
Don’t Confuse Copy Trading And Copy Paste
Be careful, copy trading and copy paste are not the same thing and it is important for you to understand the difference.
- Copy trading is 100% automatic. You do not control anything at all and you do not have control over what happens in your account because it is the trader who takes care of trading on your account. No action is required on your part other than making the deposit and choosing who will take care of your trading account.
- Copy paste is not 100% automatic. You will look for someone who will analyze and find opportunities for you, but you are free to copy them or not to your trading account. The trader does not have access to your capital and your positions, you are the sole master of your account and you can decide whether or not you want to copy the opportunities you receive.
Depending on your goals and your opinion on copy trading at the end of the article, you can decide whether you feel more comfortable with copy trading or copy paste. In all cases, the advantages and disadvantages are the same for both types of investment strategy .
What is Social Trading?
To answer the question “Is this a form of social trading?”, Together we will define social trading. When you are new to the stock market you do not have all the trading vocabulary and it is important that in this guide you can understand all of the vocabulary.
Social trading is a method of posting analyzes, observations, opinions, charts, methods and strategies to other traders via a dedicated forum type platform. If you use social trading to place your positions without involving your own opinion, copy trading can be said to be a form of social trading.
Social trading requires research and analysis on your part. Indeed, you are going to have to be able to find the right observations and the right traders who are really experienced. Indeed, we don’t really like social trading because anyone can call themselves a professional trader and anyone can post anything and everything, away from anonymity.
Avoid Forum Copy Trading
As we explained to you previously, the big problem with forum copy trading is that anyone can post anything and everything. It will therefore be difficult for you (especially if you are a beginner in trading) to find the good analyzes and remove the bad ones.
You risk stupidly copying all the doings and actions of a trader you follow on a forum only to find that this person posts anything. You can lose a lot of money in trading if you realize it late.
Forums are often free so they are accessible to everyone , even anonymous scammers. If you ever decide to follow someone to do copy trading, we advise you to speak personally with a trader who will not be afraid to show you who he is.
How Do You Find the Right Person to Copy?
You will have to set strict selection criteria for yourself, a bit like selecting a trading robot. Here are the important criteria to observe before choosing a person for your copy trading:
- The person must have advanced knowledge in trading and market analysis. Above all, don’t be afraid to ask him about his background, his performances and his complete personal history. Ask if the trader has a tracker on Myfxbook so they can track their results. Transparency and trust between you two is very important.
- Ask him lots of questions! Try to understand the strategy he is going to use, his gain / loss ratio, his maximum allowable loss per position, his monthly profitability target. No need to ask him about his success rate on the stock market, because it absolutely does not reflect profitability.
Here is an example: We win 9 times out of 10 and when we win, we win $1. So I won $9. We lost 1 position out of the 10 but our stop loss made us lose 10 U.S. Dollars. You have therefore lost 1 U.S. Dollar in total when you have 90% success.
Copy Trading South Africa: Here are the Pros And Cons
Benefits of Copy Trading in South Africa
Copy trading has many advantages, we decided to select 3 which are the most important for me.
- The first advantage of copy trading is that you don’t need knowledge in trading. Indeed, it is the trader that you are going to follow who does all the work by analyzing and placing all the positions. You just have to trust him.
- The second advantage which is also very interesting is that it will save you time. Of course, manual trading may not take a lot of your time, but copy trading allows you to deviate from trading at all.
- The third advantage that we have selected is that it is quite possible to combine copy trading with manual trading or other trading system. Which is great if you don’t want to put your eggs in the same basket. You will be able to combine your personal profitability with the profitability of the trader.
Disadvantages of Copy Trading
Unfortunately, if it was too good, it wouldn’t be fun. There are obviously downsides to copy trading and we have selected 3 for you so that you have a perfect balance between the pros and cons. We’ll give you 3 of each and we’ll let you decide for yourself .
- The problem with copy trading is that you only depend on the actions of the trader. If the person you are following falls, you fall too. We therefore advise you to discuss beforehand with the trader you want to follow in order to have testimonials. Without this information, we would tell you to run away and find someone else. The trader must be transparent because you are going to entrust him with your money.
- The second drawback is somewhat related to the first: you will stagnate. Since you are just going to follow its positions, you are not going to learn anything. If you win, it is not thanks to you, but to the trader you follow. If you lose, it is not because of you, but because of the trader you are following. Regardless of the results, you are absolutely not involved. So it’s hard to learn from your mistakes if you don’t.
- The third problem with copy trading is that it is not good if you have a little capital. Indeed, if you pay 50 US Dollars per month for service when you have a capital of a few hundred euros, you will not be profitable. With 200 euros of capital, you will have to make a minimum of 25% profitability per month to only start to be profitable. We therefore advise against this service for small capital. You earn a lot more if you invest your money by training yourself in trading.
Conclusion: Is Copy Trading Right For You?
So we will answer this question in summary form so that you can fully understand the things to know before you venture into copy trading. Depending on your trading investor profile, you will be able to have a profile that is more or less suitable for copy trading.
Copy trading is right for you if:
- If you don’t want to get into manual trading and have no intention of becoming financially free. In your opinion, trading is not meant to become a serious business, but you are interested in the world of trading nonetheless.
- If you are this type of investor profile then we recommend copy trading. You will be able to earn money and see a little how it works without getting started or having knowledge. You will only have one more or less substantial annuity each month depending on your capital.
Accept the Constraints of this Type of Trading
Of course, we recommend copy trading in South Africa if you fit this profile, but we assume that you accept the other constraints. You have to accept the fact that you are going to depend on a trader who is going to take care of your monthly profitability. You should also know that you should not expect to understand trading only through copy trading.
If you want to learn trading, you need training that will be much more tailored and education oriented. If you are curious to see how a training works, you can download our offered training which will show you some basics in video format. The objective of this training offered is to take your first steps and your first gains in the world of trading.
Alternatively, you can join our copy and paste trading signals channel. It has more or less the same advantages and disadvantages as copy trading. The only variation is that you are in control of your capital and you decide which positions to copy and paste.
Copy trading is not for you if
- If you refuse to depend on a trader, copy trading is not for you. Indeed, you have to dare to get started and trust someone who will take care of your profitability and we know how difficult it can be for people who are septic by nature.
- If you have plans for independence in trading. Indeed, if you want to make trading a serious activity that earns you money, copy trading in South Africa is not suited to your investor profile. It will make more sense to train yourself to become independent and succeed in creating income for yourself only through you and your trading strategy.
Indeed, if you want a career in trading and your goal is to become an independent trader, copy trading is not suitable. It is better that you make your own mistakes, your own tests, your first strategies etc. You will learn much faster if you move forward on your own with the support of a trainer.
Copy Trading FAQs
What is the Best Copy Trading Platform in South Africa?
eToro is the best trading platform for copy trading in South Africa.
Is Copy Trading illegal in South Africa?
Copy Trading in South Africa is legal.
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