Some might say there is no such thing as the perfect strategy, especially when it comes to forex trading. Everyone talks how traders have to remain calm and focused, but real life has more influence on us than mere articles on the internet. How to stick to a strategy when it seems everything is falling apart? The answer might be – using the mirror trading.
Mirror trading is becoming very popular among new and professional traders alike. It has quite simple premise – all you have to do as a forex trader is act like the best traders do. Copy their moves, mirror their trades, and the profit will come!
But is it really so?
Mirror Trading – Detailed Analysis
Mirror trading is ideal for traders who feel like they are not being as successful as they could. When it comes to this type of trading, traders can select different variables, trading methods etc. that are then integrated to the trading mechanism. There is no emotional burden involved, and daily stress has no influence on the trades placed. This type of trading should never be mixed up with automated, software or robot trading as it is more transparent. Traders know exactly what parameters are used, and don’t have to rely on general terms such as ‘advanced algorithm’ or ‘sophisticated software’.
Benefits of Mirror Trading
As already mentioned, mirror trading is more transparent than usual robot trading. Also, it is more diverse. Traders can always find a solution that is the best for their needs, desires, goals, and trading style. Also, users know immediately what are the possible results, and can update their strategies according to their daily preferences, as nothing is set in stone. Traders can also follow the maximum drawdown number, expressed in pips, that shows how much every trader can lose while using this type of trading.
Also, daily troubles won’t become trading troubles, as emotional influence is reduced to the minimum. Some systems that support mirror trading will also allow placing trades if the trader is offline. This can be seen in two ways: as loss of control, or as taking advantage of more trading opportunities – it all depends on the trader and his preferences. This doesn’t mean that there is no manual trading involved, as most mirror trading services support manual trading as well.
Disadvantages of using Mirror Trading
As always, there are good sides and bad sides of every approach towards forex trading. One of the main concern of every forex trader that wants to use this trading method should be to use a reliable product. Not all live results displayed are always live. Also, forex markets can be extremely volatile and sometimes unexpected situations occur. Keep in mind that the trader you are using as the base for your trading might have more funds in the account and his mistakes could have less effect on his trading account that they will have on yours.
Even though mirror trading can take place when you are offline, it is not good to practice this type of trading behaviour. Traders must follow their trades and know how much money they have left, as only so they get a chance to act on time.
When to Use Mirror Trading?
Mirror Trading is not obligatory for all traders, and it is not even offered by all forex brokers. Traders must know that this is an option, and not mandatory type of trading. It is also possible to use 3rd party services, but their technology has to be compatible with the technology of your forex broker so that trades can be executed properly. Best places to do mirror trading are forex brokers like AvaTrade.
Trader can use mirror trading all the time or only occasionally. However, before making this important decision read reviews, analyze the statistics and make sure you are using a reputable product. The best solution is trading with a good broker that offers this type of trading, as this reduces the risk of involving 3rd party as the mirror trading service.