Economy
Copying Your Way to Forex Riches: The Copy Trading Advantage
The world of forex is vast and can be confusing for beginners, but we don’t think this should be the case. It’s appealing to many because it promises greater financial freedom, a clear alternative to the traditional 9–5 working day, and the potential for large profits. However, navigating it can be challenging and requires a lot of learning, which can dissuade some novices.
That being said, there are ways to make the initial immersion process more manageable. One of these strategies involves copying traders with more experience, providing insight into their thinking and rationale. In this article, we’ll look at the copy trading method in more detail.
The Forex Landscape
Before getting too involved in the specifics of copy trading, we first need to run through the basics of forex trading and where the market is. In case you’re unaware, forex stands for foreign exchange and refers to the currency trading marketplace active worldwide and in many different countries. Unlike the stock market, the forex market is open all day during the week, making it easier for traders to access markets on the other side of the world and make more reactive moves.
Not only is it highly active, but the forex market is also the most liquid trading market, with a daily trading volume of over $6 trillion. This means there is potential for a fortunate few to make a considerable amount of money in a very short time, but this also comes with risks, and understanding the global market conditions is vital for success. This can be quite overwhelming for a novice trader. This is where copy trading can come in particularly useful and interesting.
What Is Copy Trading?
Because this isn’t a technique that’s super well-known among most forex traders, we’ll give you a brief understanding of what it is and how it works. In short, copy trading involves copying the moves made by more experienced traders in real time without making many decisions yourself. This method — also known as social trading or mirror trading — can be done automatically using various tools. It removes some of the risk associated with forex trading but may require more capital than usual.
How Does Copy Trading Work?
First, you’ll choose a reputable platform or copy-trading facilitator. These providers will connect you with traders and investors who are open to having their trades copied. Think of it as a marketplace of sorts. Next, you’ll want to choose a strategy that aligns with your trading goals. Each seasoned trader will have a style and level of risk that they’re comfortable with, so choose one that you think is the best fit — you can always change at a later stage.
Once you’ve settled on a trader you want to mimic and have decided on a rough strategy, you’ll need to determine how much you’re willing to risk when placing trades. They don’t always need to be done at the same level, but you should always check this beforehand. A seasoned trader will likely have more money to spend than a beginner or novice. You’ll then need to set your open and close positions in place, which will be synced to your chosen trader and done instantaneously.
Finally, you should regularly reflect on how your trades have performed and assess your overall strategy. Monitoring your bottom line and adjusting when needed is a skill that will be especially useful moving forward and will allow you to become a seasoned trader, but it will take time to master.
Risks and Considerations
While copy trading can have the potential to generate huge returns for traders looking to copy the actions of somebody with a lot more experience, there are still a few things you should be aware of. One of the most significant is the risk of loss and your overall risk tolerance, as this can derail your activity if you are prone to pulling out your capital before your trades have had the chance to come to fruition. A successful trader will know when to trust their guy and avoid panicking — this will take time to get right.
Copying a trader with a diverse portfolio is also something worth considering, as it will help shield your trades from industry-specific events that have the potential to ruin all of your hard work. Many successful traders will always have a diverse portfolio containing short and long-term investments. At the same time, they will actively review this at regular intervals to ensure that they have the balance just right. When they look to diversify further, they will always do their due diligence, which you should also do.
Conclusion
Copy trading has the potential to change how traders get into the world of forex, which will be sure to have a positive impact long term. It will allow beginners to find their feet and place real trades without the risks associated with being a novice, all because they’ll have a seasoned trader as a reference point. If you’re a newbie and want to try this, let us know how you get on.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.22 per cent decline on Monday, January 20, with the market capitalisation shedding N2.35 billion to close at N1.073 trillion compared with the preceding session’s N1.075 trillion and the NASD Unlisted Security Index (NSI) going down by 6.79 points to wrap the session at 3,105.12 points compared with 3,111.91 points recorded in the previous session.
It was observed that the loss recorded on the first trading day of the week was triggered by UBN Property Plc, which crashed by 20 Kobo to trade at N2.00 per share versus last Friday’s N2.20 per share.
However, the share price of Industrial and General Insurance (IGI) Plc went up by 4 Kobo to 40 Kobo per unit from 36 Kobo per unit, it could not stop the bourse from going down at the close of transactions.
The activity chart showed that on Monday, the volume of securities traded by investors increased by 57.9 per cent to 767,610 units from the 486,215 units traded in the preceding session, while the value of shares traded yesterday slumped by 17.7 per cent to N2.3 million from the N2.8 million recorded in the preceding trading day, as the number of deals declined by 14.3 per cent to 12 deals from the 14 deals carried out in the previous trading day.
At the close of transactions, FrieslandCampina Wamco Nigeria Plc remained the most active stock by value on a year-to-date basis with the sale of 4.1 million units worth N162.9 million, followed by Geo-Fluids Plc with a turnover of 9.1 million units valued at N44.0 million, and 11 Plc with the sale of 55,358 for N14.5 million.
Also, Industrial and General Insurance (IGI) Plc closed the day as the most active stock by volume on a year-to-date basis with 25.3 million units sold for N5.9 million, Geo-Fluids Plc came next with 9.1 million units valued at N44.0 million, and FrieslandCampina Wamco Nigeria Plc with 4.1 million units worth N162.9 million.
By Adedapo Adesanya
The value of the Naira weakened against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, January 20 amid FX pressures associated with this period.
Most people who came into the country for Christmas and New Year holidays are already going back and are in need of forex, putting pressure on the local currency.
Also, the poor performance of the domestic currency could be attributed to end to the 42-day access granted by the Central Bank of Nigeria (CBN) to Bureaux de Change (BDC) operators to buy forex at official price.
According to data from the FMDQ Securities Exchange, the Nigerian Naira lost 0.16 per cent or N2.47 on the greeback yesterday to sell at N1,550.05/$1, in contrast to last Friday’s rate of N1,547.58/$1.
Similarly, the Naira slumped against the Pound Sterling in the spot market on Monday by N23.39 to trade at N1,906.98/£1 versus N1,883.59/£1 and depreciated against the Euro by N23.14 to sell for N1,613.48/€1 compared with last Friday’s N1,590.34/€1.
However, in the parallel market, the Nigerian currency improved its value against the Dollar during the session by N5 to quote at N1,665/$1 compared with the previous session’s N1,670/$1.
As for the cryptocurrency market, it turned red yesterday as the US President, Mr Donald Trump, didn’t bring up the much-expected subject of crypto in his inauguration speech on Monday afternoon.
Mr Trump had promised a far more friendly crypto policy stance than the previous administration but in the long speech that announced his plans in the coming days, he didn’t make mention of Bitcoin or crypto.
Just over the weekend, the President ignited a speculative frenzy with the Friday evening launch of the Trump meme coin, which was shortly followed by a meme coin associated with his wife, Melania.
Dogecoin (DOGE) crumbled yesterday by 6.3 per cent to $0.3419, Solana (SOL) slumped by 4.7 per cent to $235.32, Cardano (ADA) fell by 3.6 per cent to $0.9777, and Litecoin (LTC) moderated by 1.9 per cent to $114.98.
Further, Ethereum (ETH) went down by 1.7 per cent to $3,241.36, Binance Coin (BNB) retreated by 1.4 per cent to $693.30, Ripple (XRP) depreciated by 1.2 per cent to $3.06, and Bitcoin (BTC) tumbled by 0.8 per cent to $101,746.99, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
Oil prices settled lower on Monday after Mr Donald Trump was sworn in for a second time as President of the United States.
On assumption of office, Mr Trump declared a national energy emergency immediately, promising to replenish strategic reserves and export American energy worldwide.
Consequently, Brent crude futures went down by 64 cents or 0.8 per cent to settle at $80.15 per barrel and the US West Texas Intermediate crude futures depreciated by $1.30 or 1.7 per cent to trade at $76.58 per barrel.
Mr Trump and his allies have signalled they would use the authority to rapidly approve new oil, gas, and electricity projects that typically take years to permit, and during his speech said he plans to unleash new oil and gas development on federal lands while reversing the Biden-Harris administration’s de-growth climate regulations.
Market analysts noted that while many of the executive actions will simply kick off a lengthy regulatory process, they extend by a large degree to the US energy industry, from oil fields to car dealerships.
These also underscore Mr Trump’s determination to reorient federal government policy behind oil and gas production, a sharp pivot from Biden’s efforts to curb fossil fuels.
He also said in his inaugural speech that he would impose tariffs and tax countries and promised an overhaul of the trade system.
Last week, prices rose for a fourth-consecutive weekly gain after the Biden administration imposed sanctions on more than 100 tankers and two Russian oil producers. This led to a scramble by top buyers China and India for prompt oil cargoes and a rush for ship supply.
Meanwhile, dealers of Russian and Iranian oil sought tankers not under sanctions for oil shipment.
While the new sanctions could cut supply from Russia by nearly 1 million barrels per day, market analysts noted that recent price gains could be short-lived depending on Trump’s actions as the new American president promised to help end the Russia-Ukraine war quickly.
Russian President Vladimir Putin congratulated Mr Trump on taking office hours, saying he was open to dialogue with the new US administration on Ukraine and nuclear arms.
Pressure was reduced based on easing tension in the Middle East after Hamas and Israel exchanged hostages and prisoners on Sunday which marked the first day of a ceasefire after 15 months of war.
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