What Is the Difference Between Copy Trading MT4 and Forex Signals?

Forex signals and copy trading are among the most popular tools that forex investors and traders rely on. That shouldn’t come as a surprise considering that over 90% of forex trading is now done online. The question is, how does copy trading differ from forex signals?

While both provide ideas or recommendations for entering a trade on a pair of currencies, they differ in other ways. For one, copy trading allows you to enter the trade by mirroring someone else’s strategy. Forex signals, on the other hand, simply provide you with a specific time and price at which to enter a trade.

Sounds complicated? Don’t worry. Simply read on because herein we compare and contrast copy trading and forex signals while suggesting ways of using both of them to earn more money in the forex market.

What Is Copy Trading MT4?

Forex copy trading MT4 refers to the process by which a trader copies the deals performed by another trader in real time.

Usually, when a trader opens a position, s/he can opt to broadcast that information to other traders who are using the same social trading network. When that happens, those other traders can manually open the same position or let their automated trade copiers do that for them automatically.

Whatever the case, they will have mirrored the strategy of the person who opened the position (the strategy provider). Oftentimes the strategy provider is a seasoned and perennially successful trader. The ones copying the trade might either be entirely new to the market or too busy/inexperienced to come up with a strategy.

Forex copy trading is an excellent strategy, not just for beginners, but for all investors. That’s because the forex market requires constant monitoring. It has many, frequent price movements that you just can’t keep up with. Therefore, your best bet (rather than scanning the extremely dynamic market) is to copy the positions of those who have working strategies.

How Does Copy Trading Work?

First things first, copy trading mt4 requires you to use a trade copier like the AllMarkets Trading System. The trade copier will then allow you to scan profiles of other traders and pick the most successful ones whose strategies you can mirror. Since you’ll be “borrowing” strategies from experienced and professional traders, your chances of making a profit will remain high even if you’re a novice.

Most copy trading mt4 and mt5 platforms are compatible with computer, mobile and tablet devices. Therefore, you have multiple ways of accessing your account.

Forex trade copiers generally work in three ways:

Manual: you personally choose the traders to follow and the strategies to copy.
Semi-automated: you can view all the positions of the traders that you have chosen to follow. From there, you then decide which positions you want to copy manually yourself and which ones you want your copy trading mt4 or mt5 account to copy automatically.
Automated: you personally choose the traders to follow as well as strategies that match your risk profile. After that, your copy trading mt4 or mt5 account will automatically replicate subsequent positions and trades.

Apart from the fact that you’re using strategies created by seasoned traders, copy trading mt4 works because it allows you to spread risk. Rather than allocating your full amount to one strategy, you can pick multiple strategy providers, divide your amount into as many portions and allocate each portion to a particular strategy.

If, for example, you have $1,200 to invest, you can divide it into 4 portions of $300. From there, you can copy the positions of 4 different traders, with each strategy getting $300. If one or two make losses, the others may make profits and minimize your loss.

That’s one reason of the biggest advantages of copy trading – it diversifies your portfolio and minimizes risk. Below is a better breakdown of the pros and cons of copy trading mt4 or mt5 accounts.

Pros and Cons of Using Forex Copy Trading

Is Copy Trading A Good Idea?

The short answer is yes; copy trading is a good idea. It allows new traders to earn in the forex market by copying positions of experienced traders. Besides, this strategy encourages spreading of risk.

However, copy trading (as a strategy) is only as good as the strategy provider. If you copy the positions of unproven strategists, then you’re more likely to make losses than profits.

It, therefore, boils down to whose strategies you’re relying on. And that means doing due diligence when choosing strategy providers and strategies to copy. Unfortunately, the world has well over 10 million forex traders. Thus, it’s impossible to go over the profile of every forex trader on every social trading platform just to find the right people to follow.

Your best bet? Use the allmarketstrading Auto Copy Trading system. With a trade pro who has been in the forex market for over 20 years, you can rest assured that the strategies you’ll get are right on the money.

This system is perfect if you’re looking to trade in the FX market but lack the time and/or experience to do the extensive work required. And once you become a pro, you can also share your strategies with others for a reasonable fee. Sounds like a plan? Sign up here and start earning money from other people’s skills.

What Are Forex Signals?

A forex signal is a trade suggestion that you can act upon in the forex market. At its most basic, a good forex signal will tell you:

1. When to enter the market (time and price points)
2. The forex pair to trade
3. Whether to buy or sell
4. The amount of profit you stand to get

As the trader, you can choose to exclusively follow the suggestions provided by forex signals. Alternatively, you can use the information provided by forex signals as part of your deeper analysis of the market before coming up with your own trading strategy.

If you’re a complete beginner, then you’ll probably want to use forex signals exclusively until you get a better understanding of the FX market. In fact, some “expert advisors” – as they are popularly known – can automatically place trades for you when the market attains pre-determined conditions (like a particular time or price point).

As for experienced traders, forex signals avail handy information that would otherwise take too long to generate. Keep in mind that the forex market is fast-moving and dynamic. Therefore, any signal is only useful if you get it in a timely manner. And that’s where “expert advisers” (or EAs for short) beat humans. They’re able to crunch numbers faster and deliver forex signals live and in real-time.

Because of their timely nature, forex signals live notifications are often delivered via SMS, email, tweet, website, RSS or any other instant method of communication. This enables you – the trader – to act on them immediately.

How Do They Work?

There are two types of forex signals, manual and automatic.

Manual forex signals

These are generated by experienced and professional forex analysts. They use a combination of fundamental analysis and technical indicators to create trade recommendations. This often involves examining the trends and price changes of specific forex pairs and “predicting” their movements.

The keyword in manual forex signals is fundamental analysis (or fundamental indicators). Generally, people who come up with these signals study current news and events to determine how they affect price movements of forex pairs.

The most commonly used fundamental indicators are news, carry trade strategy, market sentiment and volatility. This ability to predict prices using fundamental indicators is what sets manual signals apart from their automated counterparts.

Automated forex signals

While manual forex signals are exclusively created by people, automated signals are created by people but with the help of forex bots. Forex bots (or forex robots) are coded programs that use algorithms to analyze historical trends. They then use that information to make trade suggestions.

Therefore, automated forex signals exclusively use technical indicators, not fundamental indicators. While fundamental indicators are helpful in determining the direction of movement in a pair of currencies, technical indicators help you determine entry and exit points.

Most EAs allow you to customize the technical indicators to be used in generating forex signals. You can, for example, customize the spread.

Depending on the situation or your needs, you may prefer to receive manual or automated forex signals live. You can even go for both. And you’ll be glad to know that All Markets Trading delivers trading signals 24 hours a day, 5 days a week. That includes free binary options signals.

Pros and Cons of Using Forex Signals

Are Forex Signals Worth It?

That depends on the source of your signals. Forex signals that are generated by someone who has no credentials in the FX market can barely be reliable. Similarly, the fact that forex bots don’t take fundamental indicators into account means that they’re oftentimes inaccurate.

That’s why our forex signals here at All Markets Trading are developed by real professionals with over 20 years’ of experience in the foreign exchange business. If you’re a novice who’s unsure about the forex market, it’s safer to entirely rely on our forex signals as you build your knowledge and get a hang of strategy development.

On the other hand, experienced traders can use the same signals as tools for analyzing the market. That guarantees lower risks and safer trades because our trading system is designed to quickly spot dominant trends and send you well-timed and accurate signals.

Forex Copy Trading Vs. Forex Signals: The Comparison

As you may have noticed, trading signals are essentially suggestions and ideas that you can act upon. They are fed to you and it’s entirely up to you to decide whether to follow them or not. The trick lies in judging legitimate and accurate signals that are in fact profitable.

Copy trading, on its part, is a type of social trading where you mirror the trading position taken by another (more experienced) trader. In doing so, you use that trader’s market skills to earn. In this case, the trick lies in following and copying traders who have registered sustained success over a long period of time.

Therefore, while copy trading binds your mt4 or mt5 account to someone else’s, forex signals don’t. Perhaps the best thing is that you can use both of these strategies to trade in the forex market. They are not mutually exclusive. And you can get them both simply by signing up for an allmarketstrading.com account.