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Best Day Trading Platforms and Brokers in 2024
Written By
James Barra
Edited By
William Berg
Edited By
Tobias Robinson
This beginner’s guide will explain what copy trading is, how it works, and how to get started. We’ll also explore its pros and cons and highlight the top copy trading platforms available for you to try.
Key Takeaways
A contract for difference is an agreement between two parties to pay the difference between the opening and closing price of an asset.
They are flexible instruments that allow traders to profit (or lose) from changes in asset values without having to own the underlying security.
A contract for difference is an agreement between two parties to pay the difference between the opening and closing price of an asset.
CFDs can be used to gain exposure to a variety of asset classes including stocks, commodities, forex and cryptocurrencies.
Traders have the option of opening both long and short positions, thus allowing them to make profits even when markets fall.
Top 4 CFD Brokers in South Africa
These trustworthy crypto brokers provide access to the largest tokens, user-friendly platforms and low fees:
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IC Markets
Deriv.com
Download forextradingadvices.com’s CFD Day Trading PDF
What is Copy Trading?
Copy trading is a type of trading where you copy the trades performed by another, more experienced trader. It can be manual, semi-automatic or fully automatic.
Copy trading allows individuals to automatically copy another trader’s positions when they are opened or closed. Experienced traders communicate their positions using signals via social networks or forums, where followers can copy the methods.
The definition of copy trading is closely linked to mirror trading, although the difference with copy trading is that traders blindly copies rather than replicate top strategies.
Traders can copy positions in many markets, including forex, stocks and CFDs. You can also copy trades on popular crypto coins, including Bitcoin (BTC) or major precious metals such as Gold or Platinum.
Copy trading can be a good way to start trading, but it is important to understand that you will not become rich overnight. Any attempt to rush, and you will have to copy very high-risk trades, and you will likely end up losing your money.
All types of trading involve risk, so traders should always carry out their own research and understand how it works before committing capital.
How Does Copy Trading Work?
Copy trading allows you to connect a part of your portfolio with someone else’s, where any opened trades and future actions are automatically copied to your account. This can be a great way to diversify your investments; for example, a trader might consider following a long-term investor in the stock market.
Followers can choose how much funds to allocate to copying a certain trader. You can adjust this amount later depending on the trader’s success.
When a trade is copied into your account, it will normally be an exact copy of the trade performed in the master account (albeit sized to fit your budget). The trade will be replicated with the same stop loss (SL) and take profit (TP) as the original trade.
The transaction price will be mirrored as exactly as the market conditions allow. The transaction price can sometimes vary slightly in fast-moving markets.
The purchased instruments will be held in your account until the master account chooses to close his position or until the stop loss (SL) or take profit (TP) is triggered.
Note that whilst some platforms may allow you to have some control over your funds, some may operate on a fixed system. A fixed system will allow you to stop copying a trader, but you are unlikely to have much control elsewhere.
A fixed system will not allow you to close a position early while still following the master account.
How to Start Copy Trading
It is very easy to start copy trading. You can get started in just a few minutes.
- Choose a broker
- Open an account
- Deposit money to your account
- Choose a trader to copy
- Choose how much money to use
- Start trading
Choose a Broker
There is a vast range of copycat trading brokers offering both proprietary and third-party copy-trading platforms. The list of copy trading brokers allows you to compare all of them on the features that are important to you. Remember that it’s always important to do your own research to find which one would be best for you.
Open an Account
To open a trading account, you must sign up for a live account with your broker. Check your broker’s regulation status beforehand, as this will determine the level of security and fund safety provided.
Opening an account is very quick and can be done in a few minutes.
Deposit Money to Your Account
Once you have opened an account with a broker, you need to deposit money into your account. Most brokers offer a wide selection of ways to deposit money into your account. Most brokers allow you to use bank transfers, Credit Cards and a number of e-wallets. Some brokers even allow you to deposit money through Crypto. Make sure the broker you choose accepts the payment method you want.
How much money you need to start copy trading varies between different brokers. The amount is usually rather low. Some brokers require as little as $10 in your account for you to be able to start trading. Other brokers require a little more, but the amount is seldom more than a couple hundred dollars.
Choose a Trader to Copy
You will need to choose which account or accounts you want to follow. It is always better to follow more than one master account. This allows you to earn money even if one account underperforms.
Make sure to personally evaluate an account before you decide to subscribe to that account.
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You will need to choose which account or accounts you want
Make sure that the accounts you follow use a trading risk strategy that you feel comfortable with. The best accounts to follow will vary depending on your risk tolerance and investment goals.
Choose How Much Money to Use
You will need to decide how much money you want to allocate to copying the traders of each trader you follow. You can use the entire account balance to copy a single trader.
This is generally not a good idea since you will expose yourself to significant levels of risk. It is better to subscribe to 10 different traders and allocate each account 10% of the money in your portfolio.
It can also be a good idea to weigh the allocated money based on the risk profile of the copied trader. Allot a lower amount to traders with a high-risk profile that can generate high returns and a larger amount to lower-risk traders that will produce lower returns but are less likely to lose your money.
Only you can decide how to allot your money and how much risk you want to expose yourself to.
Start Trading
The platform will start trading for you as soon as you have chosen a trader to follow and allocated funds to copy that trader automatically. There is nothing else you need to do.
Now you have to keep track of the results of the trading in your account. You might want to stop a subscription if you feel that it is under performing or you might want to allocate more money to a trader that does exceptionally well.
Whilst the use of leverage can supercharge a trader’s earnings, massive losses can be racked up if markets move in an unexpected direction. The number of people who end up making a negative return is significant.
Markets
Our recommended brokers provide access to popular global markets, such as stocks, forex and commodities, something we confirm by signing in to brokers’ platforms to record the assets available.
We also consider the availability of trading vehicles that cater specifically to day traders, such as contracts for difference (CFDs). This derivative allows you to speculate on rising and falling prices without owning the underlying asset.
You can compare the financial markets available at our best brokers below.
Note market access may vary depending on jurisdictional rules.
Movements in currency pairs are measured in pips, which stands for ‘percentage in point’ or ‘price interest point.’ Like EUR/USD, the majority of pairs are quoted at four or five decimal places.
When searching for the price of a forex pair a trader will see two prices. These are the bid price, the price at which a trader can sell a forex pair, and the ask price, which is the price at which a trader can buy a currency pair.
The difference between these two prices is known as the spread. It is also measured in pips, and illustrates the profit a broker will make on a specific transaction. Day traders need to pay close attention to this: large spreads can eat into profits.
Pros & Cons Of Forex Day Trading
For retail investors, participating in the foreign exchange market carries a range of advantages and disadvantages. These include:
- Trades can be placed 24 hours a day, five days a week. This provides excellent flexibility and means participants don’t have to worry about things like exchange opening times.
- Most of the top forex day trading brokers offer a vast range of currency pairings to trade. More choice equals more opportunities to make a profit.
- High liquidity means that day traders can enter and exit positions quickly.
- The costs and fees associated with forex trading are usually much lower than those of other financial markets. In fact, some brokers operate on a ‘zero commission’ basis.
- Traders can get much higher levels of leverage through margin trading. This can amplify gains by providing a trader with more capital. But beware: it can also multiply losses if a trade goes wrong.
- Forex prices can be highly volatile and movements are hard to predict. Whilst this presents opportunities to make a profit, it can also open the door to losing a lot of money.
- Forex trading is complex and requires a solid knowledge and understanding of fundamental and technical analysis (the method of forecasting price movements using charts and data). Those who have neither the time nor resources to become experts leave themselves open to making large losses.
- The health and performance of a specific currency are tied closely to those of the issuing country or region. So signs of economic or political turmoil can cause a counter to plummet. This is a particular danger for developing nation currencies.