So, you’re a skilled trader and want to make more money and boost your reputation, too?
Why not try a copy trading platform?
Not sure how it works or if it’s actually worth it? I get it, and yeah, I know some of you are also worried about whether copy trading is even legit. Totally fair!
But stick with me through this article. I’ll break it all down, show you how copy trading can help grow your AUM (assets under management), and share some of the best platforms and apps to get started. Keep scrolling!
What Is Copy Trading?
If you’re a skilled trader, there are some ways to grow your AUM (Assets Under Management). This can not only help you make money from your trading knowledge but also build trust and boost your credibility in the trading world.
One method that really works? Copy trading. But what is copy trading exactly?
It’s a method where other people copy your trades automatically, instead of trading on their own. If they trust your performance, they can link their accounts to yours and become your followers. Every trade you make is copied to their accounts in real time, based on how much money they’ve invested.
Now here’s the good part: when your trades are profitable, you earn your own profit plus a little extra. Most platforms give you a performance fee, which is basically a small share of your followers’ profits. That’s money in your pocket. And another good part: their capital is also tied to your account. The total funds they commit become part of your managed assets: your AUM. So the more followers you have, the bigger your AUM, and the more you earn!
How Does Copy Trading Work?
Sure, understanding “what is copy trading” in theory sounds pretty simple. But if you’ve read our other articles, you know we don’t just skim the surface; we go deep. That’s why I want to give you a real example to show exactly how it works.
Let’s say I’m a pro forex trader. Someone who is interested in forex copy trading has been watching my trading performance and decided to invest $5,000 and copy my trades.
Now, imagine I open a 1-lot EUR/USD trade using my $50,000 account. The platform scales everything down for the follower, so since their account is one-tenth the size of mine ($5,000 vs $50,000), they get a 0.1-lot position.
Here’s where it gets interesting: if I make $500 on that trade, they make $50. Same percentage, same timing, same result. Now, over the course of a month, let’s say, make a 5% return. That means their $5,000 turns into $5,250 ($5,000* %5= $250). From that $250 profit, a 20% performance fee is paid to me, that’s $50, and they keep the remaining $200 as pure profit.
So basically, they get to ride the markets passively, without making a single decision themselves. And I earn from both my own trading and the profits I generate for others. Win-win for both sides.
Copy Trading Vs Mirror Trading Vs Social Trading
There are a bunch of ways to grow your AUM and make money from your trades, and some of them sound super similar: terms like copy trading, mirror trading, and social trading. But as a trader, it’s important to know the difference so you can figure out what works best for you.
Copy trading is all about you. People follow your trades, the ones you execute based on your personal analysis and strategy. And here’s the cool part: they can still choose to stop a trade if they want. So they’re copying you, but they’ve got some control.
Mirror trading, though, is a bit different. It’s more about following a system or algorithm than a specific trader. Let’s say you’ve built a strategy that buys EUR/USD whenever the RSI shows a bullish divergence. Now, when someone chooses to follow it, every time your system places a trade, it happens on their account too, automatically, with no manual control. Their account mirrors yours 100%.
Then there’s social trading, which is kinda like a mix between a trading community and copy trading. Think of it as a social network for traders, where people share trade ideas, discuss strategies, post their performance, and even follow or copy each other. It’s more interactive and flexible, and great if you want both insight and automation.
| Mirror Trading | Social Trading |
|---|---|
| Followers mirror your full strategy (Automatically) | Traders share trades/ideas, and users choose to copy them |
The Best Copy Trading Platforms (What to Look for in a Copy Trading App)
Now you know that copy trading is one of the smartest ways to turn your trading skills into real profit. To do so, various apps and platforms let you do it. Some of the copy trading platforms include:
But here’s the thing: choosing the best copy trading platform is not just about signing up; you must select the one that fits your style and goals. Here’s what to look out for:
Fast Execution
In trading, even a split second can make or break a deal. Especially if you’re a scalper, you’ll need a platform with lightning-fast execution. It also ensures your followers get the best results possible, staying in sync with your trades.
Broker Compatibility
Are you focused on forex? Crypto? Stocks? Make sure the platform supports the markets you trade and the broker you use. Check whether it supports platforms like MetaTrader, cTrader, or whatever you prefer.
User-Friendly Interface
Let’s be honest! Everyone wants to make money from the start, but trading isn’t something that brings you profit from day one. Copy trading is the key, especially for beginners or anyone who wants to earn without being a pro yet. That’s why using an app with a clean, easy-to-use interface makes things smoother, not just for you, but for your followers too. The easier it is for them, the more likely they’ll stick around.
Regulation & Security
Always double-check that the platform is safe and regulated. Look into its track record: has it had any shady or illegal issues? If a platform isn’t trustworthy, it can scare off followers and hurt your AUM growth.
Payout & Revenue Model
Platforms that allow you to increase your AUM come with different payout models. For example, prop firms such as E8 Markets, FTMO, or Funding Pips use a profit split model with varying percentages. Now, when it comes to copy trading, it’s not just about trading well! You also want to get paid fairly.
Go for platforms that offer solid revenue structures. Some use performance fees (like taking 20% of your copiers’ profits), and others offer fixed monthly subscriptions, or even spread/commission sharing (you get a share of the broker fees generated by your copiers).
Platform Popularity
To grow your AUM, you need followers, and for that, the platform’s reach matters. The bigger and more active the user base, the faster you can scale. Look at how many active users there are. Does the platform promote top traders? Will you be featured in rankings or marketing campaigns? All of that helps you get noticed and gain more followers.
Is Copy Trading Profitable? (Pros and Cons)
As I mentioned earlier, using this method is one of the best ways to grow your AUM, and with that comes a chance for higher income. But it doesn’t stop there. Copy trading can actually open up even more opportunities, like:
Personal Branding
If you trade consistently and deliver good results, people will start noticing. You’ll build a solid reputation and attract more followers. That can really level up your personal brand and help you grow a community around your work.
Scaling Without Extra Risk
One of the best parts? You don’t have to risk more of your own money to scale up. Other traders invest in your performance, so when you win, you’re not just winning for yourself; your financial goals get bigger without putting in extra capital. It’s a win-win.
But, it’s not all sunshine and rainbows. As a trader, there are some challenges that you might struggle with.
Technical Issues
Stuff like latency, slippage, or spread differences can mean your trades get copied with a slight delay or at different prices. These small differences can add up, and sometimes your followers might get frustrated if their results don’t match yours exactly. That’s just part of the game.
Psychological Pressure
Knowing that lots of people are watching and copying your trades can really get in your head. Even when things are going well, that pressure can mess with your focus. And yeah, it gets more intense as your AUM and follower count grow. You’re not just trading for yourself anymore, and that changes everything.
| Pros | Cons |
|---|---|
| ✅ AUM Growth | ❌ Technical Issues with Platforms |
| ✅ Personal Branding | ❌ Psychological Pressure |
| ✅ Scaling Without Extra Risk and Money | ❌ Responsibility Shift (you’re no longer trading just for yourself) |
Is Copy Trading Legit?
If you think copy trading could be a good choice for you, one of your concerns might be whether it’s actually legal. The truth is, in most countries, it is allowed and not restricted by law.
However, in some countries like the U.S., things are more tightly controlled. Copy trading is legal there too, but it’s heavily regulated. Agencies like the SEC and CFTC are in charge of making sure platforms follow the rules for securities and commodity trading. Basically, they make sure everything runs by the book
However, if you’re trading with prop firms such as E8 Markets, Funding Pips, Bright Funded, or Maven Prop Firm, the rules can be a bit different. Some firms don’t allow you to copy trades between accounts or from other traders, so it’s important to read their policies carefully before you start.
How to Get Started with Copy Trading
Now that you’ve got a solid idea of “what is copy trading” and how it works, you might be wondering: how do you get started?
Here’s the basic process:
- First, find a trustworthy platform. I already pointed out some key things to look for, so keep those in mind when choosing your app.
- Next, make sure you go through the platform’s setup steps. This usually means agreeing to their terms, verifying your identity (KYC), and sometimes meeting a minimum capital requirement.
- Once that’s done, connect your trading account and trade just like you normally would.
- The more people who copy your trades, the more your AUM (and earnings) go up. You can grow your audience by sharing your unique copy link on social media or in trading forums, posting updates about your performance, and being real with your results.
Common Mistakes in Copy Trading
If you’re a signal provider or a skilled trader working on a copy trading platform, even with a solid track record, you can’t just sit back and relax. You still need to stay on top of your trades and avoid some behaviors that can seriously mess things up.
Ignoring Risk Management
Risk management isn’t just for beginners; it’s a mindset that every trader needs, no matter how good you are. Things like random position sizes, trading without stop losses, or overleveraging just because you’re feeling confident are all risky moves and can lead to losing your followers. To avoid this, try to stick with a set risk per trade, like 1% or 2% of your capital. Keep your position sizing steady, use stop losses, and don’t let your emotions take the wheel.
Overtrading
You don’t have to trade just for the sake of trading. If the market’s slow or the setup isn’t clear, it’s totally fine to sit it out. Forcing trades or trying to bounce back too fast after a loss (aka revenge trading) can have a negative effect and decrease your credibility. Read more about what overtrading is and how you can stop it here.
Poor Drawdown Management
One thing many traders overlook is drawdown. Even if you’re usually profitable, a big dip, especially a sudden one, can scare people off, as not everyone following you has the same risk tolerance or account size. Also, most platforms show drawdown stats right on your profile; keeping it low is key if you want to keep your credibility.
Inconsistency
Imagine posting trades every week, then going silent for a whole month. That’s not gonna fly. Markets move fast, and your followers expect regular activity. If you disappear too often, they’ll move on to someone else! Simple as that.
Final Thoughts: Is Copy Trading Worth It?
Now that you know how it works and how you can earn from it, the big question is: is it worth it? Well, that depends. This method isn’t right for everyone, but for many skilled traders, it can be a great way to grow their brand and income. If you use a trusted platform, stick to strong risk habits, stay consistent, and keep delivering results, chances are you’ll attract loyal followers, and yep, that means more AUM and more profit.
FAQ
How Does Copy Trading Work?
By copy trading, copiers can copy your trades, and you will get a part of their profit too.
Is Copy Trading Legit?
Yes. Copy trading is legal, and you can start it on many regulated platforms.
Is Copy Trading for Beginners?
Copy trading allows beginner traders to copy other advanced traders’ trades and make money from the beginning.
What Is the Best Copy Trading Strategy?
The best copy trading strategy depends on your trading style. What works well for one person might not be suitable for you. That’s why it’s important to understand your own risk tolerance and goals before following someone else’s trades or generating trades.
