What kind of returns can I make from Copy Trading?

[Sam Button]

[Justin Freeman]

When considering your target trading returns, you’re basically carrying out a risk/return analysis. Copy Trading platforms actually provide a wide range of data on each of the Signal Providers to help this process. It’s possible to get a break down on markets and instruments traded, typical holding period and of course P&L over a range of different time frames. When following a particular trader there are likely to be some factors such as ‘slippage’ and account specific admin costs that will result in your performance not being identical to a copied trader. But in general, your returns should / could mirror theirs and a quick glance over some of the accounts available to follow gives an idea of what returns are possible. Researching traders to copy on eToro allows you to filter by trader: location, market traded, percentage return, maximum daily /weekly drawdown, and time period. Even with a fairly tight filter applied we still found six accounts to follow that met the requirement of being: based in Germany, trading forex, with returns over 10% over the last twelve months. The one below providing details 24 data points of monthly returns There are five Signal Providers returned on a filter of: returns over 50% over 12 months: The intention here is not to promote any particular traders. Returns of that nature typically come as part of a fairly aggressive risk-return ratio. You’d want to make sure you’re familiar with all the details of a trader before copying them; it’s more a case of demonstrating how the filters work. One of the benefits of Copy Trading is that you don’t have to devote the time and resources to 24-hour portfolio management. Risk Management tools, that help protect any profits you make also operate in a round the clock, semi-automated manner. The ZuluTrade platform contains a range of features that are designed to mitigate risk. ZuluGuard is an account protection feature that monitors the behavior of Signal Providers. In the event that a Copied strategy is detected to have undergone a radical change in approach, ZuluGuard intervenes to break the link between their new signals and your account. The ZuluTrade ‘Automator’ tool allows you to apply your own risk policy rules. You can for example set your account to ‘lock in profits’ or send you an email should a particular trader’s P&L falls below a certain level.