Copy trading is popular with traders who lack expertise in a specific market and those who have limited time to commit to trading. Copy-trading in forex means that a trader can simply copy another trader’s positions rather than scanning the fast-moving forex markets themselves.
Copy-trading works by relying on social networks and social trading systems. When one trader opens a position, they can broadcast this information to other traders on the network, who can then decide whether they want to open the same position, or alternatively, their automated trading systems can do it without additional input from the trader.
Usually, the primary trader who broadcasts their positions has experience in the underlying market and the copy traders might be entirely new to the financial markets. Forex copy trading is a popular strategy because price movements are often small but frequent, and constant monitoring is required.
You may ask what are the benefits and trade-offs.