Forums » News and Announcements
What is Forex Mirror trading?
-
What is Forex Mirror trading?
You have probably heard more about Copy trading and Social trading in these recent years and months.To get more news about Forex Mirror Trading, you can visit wikifx.com official website.
You should know, however, that the first of these innovative investment practices to arrive has been Mirror Trading.
We can say that Mirror Trading has brought to life this new sector, which has then evolved into many new solutions and facets.
However, to be precise and professional, Mirror Trading has some pretty specific characteristics that distinguish it from the other two.Mirror Trading is an innovative method of investment with which the investor can:
select one or more automatic algorithmic trading strategies, hosted and run on the Mirror Trading platform server;
connect the trading account he/she has at a forex broker to one or more of these strategies;
automatic and proportionally copy into his account each trading signal executed by these strategies, in order to replicate their performance.
Essentially, when a trade is opened, closed or changed according to the algorithmic strategy, the same is done to the replicated investor’s trade, on his personal trading account.
What distinguishes Mirror Trading
Mirror Trading refers to a situation in which a Signal Provider uploaded his automated strategy on a Mirror Trading Platform.The strategy is usually examined, checked, tested, and after that is made available to all investors.
So, it comes to replicate a program (created by a trader) that runs on a server platform.
With Copy Trading, instead, we have a trader who connects his trading account to the platform, and the platform that records everything that is executed by the trader, in order to produce data on his performance visible by investors.
So, in this case, it comes to replicating a person and his operations. However, in substance very often the difference is really minimum, because nothing prohibits a trader to use an algorithmic strategy on his own account, and therefore in that case we will have a situation virtually identical to that of Mirror Trading.
And Social Trading?
Whether it’s a Mirror Trading or Copy Trading Platform, if we add some extras Social Network features, with the ability for users to interact with each other, we have created a Social Trading Platform.
The Mirror Trading Pros
Among the strengths are:Control of your capital: one of the first news of this method of investment was the fact that every investor, unlike traditional investment methods where you have to deliver your funds to a manager, retains possession of the capital. To invest you need to open a trading account in your own name and pour capital into it, but it will always remain under your control and it will not be physically managed by other entities, and therefore is a better form of security for your funds.
Emotional impact reduction: among the main obstacles to all beginners who approach the world of online trading, there is lack of strategy on the one hand, and certainly the inability to manage emotions on the other. Investing in financial markets is very stressful, and can greatly impact on people’s emotions. Mirror trading removes part of this component because you are not the one to decide when and how to open or close the trades, but the strategy you have chosen.
Wide range of instruments and markets: in the beginning Mirror Trading was born only on Forex market, and still this the most followed and rich market. Over the years, however, platforms have evolved, the offer has expanded and today you can find mirror trading services for CFDs, Stocks, Futures, Options and Binary Options.
Proportional Signals Replication: one of the main advantages of Mirror Trading is definitely the proportionality of the signal replication. In essence, if the strategy, for example, works on a $ 100,000 account, but ours instead is only $ 10,000, it is clear that its and our trades should not have the same size, because if so, on our smaller account, they would impact in a much greater extent, with consequent greater risks. With Mirror Trading we have various replication options, the fixed or proportional, both created to allow users to replicate the signals with the appropriate amount given the size of their own capital.
Ability to check the performance before: in the world of Forex, automated trading Robots or EA are very famous, i.e. programs that trade automatically, to be installed on your trading platform. The problem with these solutions is that it is never possible to be sure of the actual effectiveness, and you almost always have to test the system sight unseen, because the creators rarely release a real performance statement. With Mirror Trading of course there is no certainty of future performance (unfortunately we will never have it, anywhere and anyhow), but at least you have a view on the real performance of the strategy recorded up to that point, and therefore you have a parameter and truthful information to help you better choose.