We’ll start with the definition of a trade copier. A trade copier is a software application that makes it possible to copy trades from one account (and more than one account) to another account (or to a number of accounts). It doesn’t matter if these accounts are spread out across a number of brokers. In fact, the accounts can even be on different trading platforms. The PowerTradeCopier, one such copier, enables a trader to copy trades from the MT4 platform to accounts held at brokers that use FIX API, brokers such as Currenex, HotSpot, Interactive Brokers (IB), LMAX, ADS Securities, Fortex (Marex), MIG Bank, CitiFX, SwissCode, Saxobank, Commerzbank, etc. This can also be performed on Jforex.
Another trade copier, CopyToolPro, makes it possible for traders to copy trades from the MT4 platform to the MT4 platform as well as the MT5 one. Conversely, it also makes it possible to copy trades from the MT5 platform to both the MT5 and MT4 platforms.
Just about all trade copiers are set up to do the following:
- Play around with lot sizes and adjust for risk based on the relative equity of two accounts
- Copy orders for specific symbols as well as magic numbers
- Modify, as needed, a trader’s stop-loss and take-profit orders
- Dispatch e-mail alerts to report on a user’s trading activity
- Perform an analysis of results for each expert advisor used by a trader (this function uses a single magic number for all orders)
- Make automatic adjustments between brokers who apply 2/3 digit pip pricing as well as 4/5 digit pip pricing
- Make automatic adjustments between different currency symbols used by brokers (e.g. EUR/USD, EUR/USDcx)
- Make automatic adjustments to market execution (applicable to those brokers that do not allow the comingling of market orders with stop-loss and take-profit orders)
- Deal with partial closes
Trade copiers were originally created for money managers and forex signal providers. However, their advantages were such that individual traders started using them as well for their trading. The advantages are manifold and merit further elaboration:
- Trade copiers have many supplementary functions that can make trading strategies more effective. A trader, for instance, may frequently copy a trading strategy to the trader’s account. When that strategy was designed, however, the developer might have had a different perception of risk from that of the trader. This is where a trade copier comes in handy. A trade copier can modify the stop-loss and take-profit parameters built into the strategy. The copier will also let the trader rewrite or delete those comments that came with the strategy.
Additionally, trade copiers make it possible to copy stop-loss and take-profit orders exactly as they are, or to copy them based on the difference (in terms of pips) that may exist between the prices in the master account and the prices in a slave account. Why is there a difference in the first place? Well, broker prices may differ by several pips. Also, you can experience a short delay during your copying of orders. For those two reasons, when you copy orders from the master account to a slave account, the orders may open with prices that will differ from those in the master account. Trade copiers let you copy your stop-loss and take-profit orders exactly as they are in the master account, or in terms of the difference that exists between the prices in your master account and those of the slave account in question.
To put that into numbers, assume that the master account shows a EUR/USD buy order at 1.3245 with a stop-loss level that is at 1.3230. Assume that the price in the slave account is 1.3246. You can copy the order as is, which will peg the stop-loss level at 1.3230. But you can also fix a proportional pip distance during your copying, in which case the stop-loss level will be at 1.3231.
A trade copier also lets you copy from a drawdown. When you use that function, the copier doesn’t copy an order instantly, waiting instead for the price to move in the direction of the drawdown and making an additional profit of several pips on each of your orders.
Trade copiers allow you to apply filtering if there are certain currencies that you wish to avoid in your trading, be it because they come with a higher risk or lower profitability. You can also use filtering to avoid trading in certain metals that may pose personal ethical dilemmas (e.g. trading in gold clashes with the religious beliefs of some traders). Using historical data, you can filter by time, avoiding trading at certain hours of the day, or perhaps on certain days of the week, if your historical data suggests that trading at these times carries with it drawdown risks.
- Aside from developing your own trading robot or buying the robot of another developer, trade copiers make it possible for you to acquire robots that have been noted in forex championships or even used by veteran money managers. Copying another trader’s strategy is perfectly possible: you only need to know the account number and password of an investor – information that is often available.
- You can copy trading strategies that are appropriate for your own risk appetite. This is possible because trade copiers use coefficients for lot scaling and offer other adjustments that can be made to the management settings.
- Trade copiers make economic sense. You can buy an expensive robot that may otherwise be out of reach and split the cost with a friend who is also a trader. The robot can be installed in one account, and trades can be copied to another account with the help of a copier. Should a forex robot be restricted to one account number, a trade copier will also help you trade in other accounts as well.
- A reverse module is often cited as an advantage of trade copiers. It is believed by many that a trade copier allows traders to copy an unsuccessful trading strategy, reverse all orders by using a reverse module, and make the unsuccessful strategy, well, successful. The validity of this is dubious, and we are not confident that it is easy to unearth an unsuccessful strategy that can be successful after reversing.
- A trade copier will help you hide from your broker your stop-loss and take-profit orders, as well as the level of your pending orders. The orders that you want to hide from view will be stored by the copier internally, away from the broker’s eyes. Should market prices reach the level of a hidden order, the copier will automatically convert the order to a market order and treat it accordingly.
- Trade copiers offer cross-platform functionalities. That in itself is very advantageous to a forex trader. One example of this will suffice. You can use a FIX API connection through the FIX API Add-on, a functionality that is provided by PowerTradeCopier. This functionality lets a trader take a strategy that the trader uses in the master account on the MT4 platform, and open orders at raw quotes at a broker that uses FIX API. It should also be noted that the use of a FIX API broker in such cases helps shield you from the risk of the broker trading against you, though the risk is not eliminated entirely.
You may wonder why money managers also avail themselves of trade copiers. That is because they often have clients who come to them with preexisting accounts. On top of that, clients may also use a number of brokers. All of that makes a trade copier indispensable; otherwise, the accounts would be simply unmanageable. Note that the master account need not be on the same machine as the copier you’re using.
Let’s conclude with a brief mention of forex signal providers. Some trade copiers may not be much in the way of help for forex signal providers. That is because, normally, a provider does not have a client’s trading password. These situations can be resolved with the use of a net trade copier. An example is the PowerTradeCopier Provider mode. That kind of copier will allow a client to enter his password and make all the necessary adjustments to the settings – for example, fix the lot size, etc. – without having to provide the password to the signal provider. Note that orders will open automatically on the client’s platform.
Read more about PowerTradeCopier: http://multiterminal.net