WHY COPY TRADE FOREX. 2nd Edition MICHAEL HODGES AND BRETT COOPER

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1 WHY COPY TRADE FOREX 2nd Edition MICHAEL HODGES AND BRETT COOPER

2 WHY COPY TRADE FOREX The global foreign currency exchange is a trillion dollar a day market. Large banks and corporations deal with hundreds of national fiat currencies on a daily basis to finance imports and exports, invest and repatriate foreign incomes. As long as global trade existed, the foreign exchange market dominated the realm of international business. In this age of globalization, the Forex market is more vital because now even small startups are going global and dealing with foreign currency. WHY FOREX TRADING IS SO PROFITABLE? These millions of international transactions offer traders ample liquidity to make small profits on a daily basis from the price fluctuations. In the last few decades, retail Forex trading has emerged as one of the dominant alternative investment vehicles. One of the main reasons for this is that the regulatory bodies allowed Forex brokers to offer extraordinary leverage to traders. For example, nowadays Forex traders can control $100,000 assets in the market by only depositing $1, with 100:1 leverage! Such high leverage enables Forex traders to magnify and profit significantly from the small price fluctuations. WHY MOST FOREX TRADERS STILL LOSE? However, the highly leveraged nature of the Forex market makes it risky for the average traders. In fact, according to statistics from brokers, as much as 95 percent of retail Forex traders consistently lose money trading the Forex market. This is because even though there are free educational resources available to learn about the Forex market and trading, the process of actual trading is difficult. It takes astonishing discipline to master the art of trading. Even veteran traders, with quite a lot of years of experience, often struggle to produce regular profits in this market due to the level of attention it requires to trade the Forex market. The main problem with Forex trading is not that it requires years to learn how to successfully trade the Forex market. The problem is committing substantial amount of time every day to follow and trade the market. Beacause most of us only trade with small amounts, it requires unrealistic returns to justify the amount of time spent on trading the 2 Why Trade Forex 2nd Edition

3 Forex market. For example, if your annual income is $50,000, and you invest that in the Forex market, it will require a 100 percent return per year to substitute the income from your day job. If you invest $10,000, it will require a 500 percent return just to cover the opportunity cost of leaving your current occupation and becoming a full time trader. This is why most traders try to generate unrealistic profit and as a result take unnecessary risks. As a result, they over trade and turn profitable strategies into unprofitable ones and lose all of their capital in a short span of time. HOW TO PROFIT FROM THE FOREX MARKET WITHOUT TRADING? For decades, corporations, banks and wealthy individual investors could invest in hedge funds to take advantage of the opportunities offered by the Forex market. Hedge funds are a type of special fund. These funds employ professional fund managers to manage their investment in high risk assets to generate extra-ordinary profits. However, the required minimum hedge fund investment starts from $1 million, which prohibits regular folks from participating. INTRODUCING FOREX COPY TRADING The advancement of the Internet and associated technologies now makes it possible to directly hire a professional trader via Forex copy trading platforms. Numerous Forex brokers and technology platform providers now offer investors with the option to link their Forex account to a professional trader s account. This way, any trade executed by the professional trader is mimicked or copied on the investor s account. As soon as the professional trader enters a trade, modifies the profit target or stop loss order, or exits the trade, it is also reflected in the investor s account as well. 2nd Edition Why Trade Forex 3

4 Usually the traders are paid by the brokers or copy trading platform developers from the spread differences. Because a successful trader often has thousands of followers, they get to earn substantial commissions for offering their professional expertise and service. In contrast, this makes it virtually free for investors to hire the professional traders as they don t have to pay any additional fees to link their accounts. While trading Forex is a lucrative business, it is still a business and not a get rich quick scheme. While the Forex market is open 24/7, 7 days a week, It is not practical for average traders to commit 8 10 hours a day trading. As we don t want to risk a large amount of capital when we are just starting out, and to justify spending all day trading will require either large investment or an unrealistic return. Forex copy trading solves this dilemma to a certain extent as we can invest with a professional trader at virtually no cost and grow our small account over time. The advance cloud computing based copy trading technology has made it easy for traders with skills to become professional fund managers and created an opportunity for the rest of us to become investors. NAVIGATING THE WORLD OF FOREX COPY TRADING While it sounds great, Forex copy trading is not that simple. There are several online platforms where you can find profitable traders who has lucrative profitability statistics. But as soon as you start following them, you will discover that their trading habits may not suit your risk appetite or financial goals. This is because most Forex copy trading platforms pay traders commissions based on how many trades they generate over a period of time, and not based on how much profit they generate for the investors or on their portfolio. This conflict of interest between the professional trader and investor often creates incompatibility. As the trader wants to maximize his or her income by opening more trades and the investor wants to maximize his return on investment (ROI). Just like trading Forex, finding the right trader requires intense research and countless hours. Moreover, to find profitable traders, we first need to understand the fundamentals of evaluating traders against strict criteria based on our own risk appetites and expected returns. 4 Why Trade Forex 2nd Edition

5 FOREX COPY TRADING SURVIVAL GUIDE The Forex Copy Trading Survival Guide is the end result of Brett s years of experience and work. He has compiled all the information you will need to understand what are the different types of copy trading tools available and what are the best ways to choose a platform, broker and most importantly, the trader. In addition, he has also provided a wealth of other information on forex and forex trading. Buying this Ebook is the first step on the road to successfully copy trading the Forex market. Once you join you can begin to research which platform is right for you and to choose which traders you may want to follow. The Ebook also offers a step-by-step checklist to help you along your way and to track your progress. By capitalizing on the experience of Brett and using the checklist, you can save yourself countless hours of frustration trying to navigate the highly profitable field of international currency speculation, Forex. Thank you for Downloading Why Copy Trade Forex. Regards, Michael Hodges and Brett Cooper 2nd Edition Why Trade Forex 5