Top 5 Copy Trading Platforms for Earning Passive Income in 2024 (2024)

Is there a trader that you admire so much that you wish you could replicate their trades? Copy trading is your answer. If you have been trading the financial markets over the recent years, you’ve heard this term. Through copy trading, investors can easily delegate the complex issues of investing to professional traders. Traders can also magnify their returns by gaining access to more capital. Yet, both groups should first find a reliable application to work with.

In this Article by Finestel, we first focus on what copy trading is and how it works. After stating the benefits and drawbacks for both traders and copiers, we shift our attention to the risks and limitations of copy trading. However, our main goal in this article is to introduce the best copy trading platforms in Forex, Crypto, and the stock market and provide a brief evaluation of each.

Introduction to Copy Trading

With the advent of the internet, the world has become a much smaller place. Traders all around the globe are now able to interact with each other in a matter of seconds using social trading networks. Copy trading is one of the most popular investing strategies that the internet has enabled.

Today, there are several online copy trading platforms that link capital to deserving, expert traders. With copy trading, every position taken by the master trader is replicated in the investor’s account. The investor is usually the one bearing all the financial risk while the profit is shared. However, the trader also risks losing investors and capital in case of subpar performance.

As an investor or copier, you can find professional traders on copy trading platforms and opt to copy their executions and replicate their results. As a trader, you can attract followers if you have sufficient skills and a decent track record. Therefore, you would be able to increase your AUM and, subsequently, your profits by managing investors’ funds.

The History and Evolution of Copy Trading in Financial Markets

You can trace back the history of copy trading to the early 2000s. The Internet’s invention has led to the creation of online trading platforms. These platforms then gave birth to copy trading as a new way for retail investors to benefit from the expertise of professional traders.

In its early stages, copy trading involved the manual replication of trades by the investors. Copiers would take time to analyze the activities of experienced traders and execute similar trades in their own accounts. In this early version, the most important part of trading which is risk management, was done by the followers themselves. However, with technology advancements over time, sophisticated copy trading features have been introduced.

Copy trading platforms have started to offer automated copy trading services. These systems enabled real-time replication of executions, proportional to the copier’s account size. The absence of human intervention in this process significantly improved the efficiency and accuracy of copy trading. As a result, copy trading was finally gaining mass attention.

While individuals and retail investors were the majority interested in copy trading, institutions, and asset managers also entered the space. Their arrival has led to the evolution of copy trading. New copy trading services were developed to cater to the needs of the big players. Today, many asset managers and even hedge funds offer copy trading services to their clients.

Which Markets Support Copy Trading?

Copy trading is highly versatile and can be applied to almost all online traded markets. Here are the most prominent markets that support copy trading:

Foreign Exchange (Forex): The forex market is where traders exchange different countries’ currencies in. Many forex brokers support copy trading nowadays, via partnerships with copy trading platforms.
Stock Market: Traders can also use copy trading services in many developed countries’ stock markets. They follow expert traders to potentially beat the market’s performance.
Cryptocurrency Market: While the crypto market is a young one, it is rapidly catching up to the traditional markets in financial innovations like copy trading. You can copy successful traders’ executions by connecting your exchange account to copy trading platforms and following these traders.

What Are the Benefits of Copy Trading?

Copy trading offers significant advantages to both traders and investors. Here are some of the most important benefits:

Benefits of Copy Trading for Followers (Investors):

Access to Expertise: Copy trading allows followers, especially inexperienced investors, to access the expertise and trading strategies of successful traders. Therefore, they can replicate expert traders’ performance and grow their capital.
Time-Efficient: Copy trading can be a time-efficient solution for those who are interested in the financial markets but do not have sufficient time. It removes the need for followers to conduct extensive market analysis. It also transfers the burden of making trading decisions to experienced asset managers.
Emotional Discipline: Emotions often play a significant role in investment decision-making, leading to impulsive actions and potential losses. With copy trading, followers can avoid emotional biases, as the trades are executed based on the predefined strategies of the selected master traders.

Benefits of Copy Trading for Traders (Masters):

Additional Income Stream: Traders who are skilled enough to be consistently profitable are rewarded with additional income through copy trading. They can manage investors’ assets and charge them with management and/or performance fees as compensation.
Scaling Opportunities: Many consistent and successful traders may have limited funds to even make ends meet. Thanks to copy trading, these traders can now gain access to more capital and scale their business. Consequently, they can magnify their profits and pave the way to their ultimate financial goals.
Risk Management: There is a famous quote that says, “Professional traders do not trade with their own money”. Traders can limit their risk by working on other people’s capital instead of their own funds. So, they eliminate the risk of blowing up their own life savings, in case of a disaster in the markets or a gruesome losing streak.

Slight Differences between a Copy Trading App, Platform, Software, and Bot

Copy trading platforms, automatic trading software, and bots all achieve trading automation. However, there are slight distinctions between them. Here are the main differences:

1. Copy Trading Platform

A copy trading platform is a web-based terminal or a mobile application that enables copy trading. Traders and investors can interact and connect with one another using this medium. Both followers and traders need to sign up to these platforms and make accounts in order to access the copy trading service.

Followers can usually browse the platform’s traders and choose their suitable asset manager. They can then copy their favorite trader’s executions and profit from their expertise. These platforms offer a technology that replicates the traders’ executions in their respective followers’ accounts. Additionally, best copy trading apps transparently display their traders’ historical performance. This feature allows investors to choose traders who are more aligned with their risk tolerance and investment goals.

2. Automatic Trading Bots

Copy trading is not the only solution for trading automation. Using automatic trading tools, traders can automate their trading activities, usually by utilizing a trading bot. Trading bots offer a different functionality compared to copy trading. Instead of copying other traders’ executions, bots allow investors to automatically trade according to predefined rules and strategies.

For instance, a developer might create a bot that executes buy or sell orders based on certain price action criteria or indicators. The investors can then buy these bots to automatically replicate the bot’s trading signals. One can also develop their own trading bot based on their personal strategy to eliminate the time-consuming process of constantly monitoring the markets and executing manually.

3. Copy Trading Software

Traders can also purchase the license to use copy trading software. For instance, Finestel developed a personalized, white-label copy trading software that traders can use to run the crypto trading side of their business under their own brand rather than being listed as a trader on a copy trading platform.

Finestel provides copy trading software as a service, bundled with several useful features related to marketing, sales, community management, and portfolio tracking. Therefore, Finestel’s service is not only a copy trading software but a comprehensive, customizable asset and community management tool.

Factors to Consider When Choosing a Copy Trading App

There are several factors one should consider when selecting a copy trading app. Some of these factors concern traders, and some of them are important to investors. There are also some factors that are related to both groups, such as regulation and security, platform user-friendliness, and customer support.

What Masters Should Care About

Master traders, the traders who offer their expertise to investors, should consider several factors when selecting a suitable copy trading platform. If you are a trader, here are some of the most prominent ones you should keep in mind:

Platform Reputation and User Base: You should look for reputable platforms with a large user base. These popular platforms increase the exposure of traders to investors, increasing the chance for them to attract more followers and AUM.
Fee Structure: Analyzing the fee structure of copy trading platforms is key. You should determine whether the platform charges master traders a portion of the profits earned or uses subscription fees or fixed commissions. You should then select the suitable platform according to your goals.
Analytics and Reporting: You should search for a platform that offers comprehensive analytics and reporting tools. Detailed reporting features can aid you in analyzing your trading performance and your followers’ portfolios.
Flexibility in Strategy Implementation: The platform’s approach to various trading strategies is a significant factor. Some, for example, might not allow scalping, high-frequency trading, or risking more than a fixed percentage. You would be better off selecting platforms with high flexibility, as they allow you to implement different strategies.
Accessibility of Payouts: Remember to read the payout policy of the platform and also read the reviews. Look for red flags such as delays, lack of transparency, payment issues, etc. If there are none, you are good to go.

What Copiers Should Care About

When choosing a copy trading platform as a copier (follower), you should take a number of factors into account. Here are some of the key criteria in choosing the most suited copy trading platform as a copier:

Performance of Traders: Evaluate the track records of master traders on the platform. Pay attention to their drawdown, and their risk management skills, as well as the profits they earned. Even the best copy trading platform is useless without decent traders.
Diversification Options: Always choose platforms that offer a variety of traders to follow. You can use the available options to diversify your investment and significantly reduce your risk.
Transparency and Communication: Ensure the platform transparently provides reports and the trading history of their master traders. Accurate information regarding trader performance can significantly aid you in choosing the right one to follow.
Fees and Costs: You should understand the fee structure related to followers. Some platforms charge their fees from the master traders and some charge them from copiers. Also, check the performance fees, management fees, and subscriptions for the following traders.
Risk Management Tools: Some copy trading platforms offer useful risk management tools to their users. These tools might include caps on how much of your capital is at risk, how much you are willing to risk on every trade and etc. These platforms can be very useful for risk management, which is the key to longevity in the financial markets.

Tips for Success in Copy Trading

While copy trading offers many benefits to both investors and professional traders, participating in the financial markets is always risky. Therefore, it would be helpful if you keep a few important tips in mind to ensure long-term success. Similar to the previous section, the tips are divided into two parts, some for the traders and some for the investors.

Tips for Master Traders

Consistent Performance: As a trader, you should try to maintain a reliable performance over time. Always avoid unnecessary risks that could endanger your followers’ assets. Optimize your strategy to be consistently profitable in the long run.
Transparent Communication: Transparently communicate with your followers. Let them in on your profit targets and risk management approach. Moreover, provide regular updates and keep them engaged.
Diversify Your Trades: Diversification is one of the most common risk management techniques. Avoid taking positions in the same direction on positively correlated assets or over-leveraging on a single one.
Continuous Learning: Aim to constantly develop your knowledge about the markets. This would help you to improve your strategy, keep it up-to-date and perform consistently in various market conditions.
Set Realistic Expectations: Avoid setting unrealistic goals and promising massive profits to your followers. Always keep their expectations in check with reality and share the potential risks with them.

Tips for Copiers

Research and Diversify: Extensively analyze the traders available on your copy trading platform of choice. Try to find the best-performing traders with the least drawdown. You should follow the ones who are more suited to your personality, risk tolerance, and goals.
Risk Management: You should use risk management tools available on the copy trading platform to protect your capital. The drawdown limit is one of the most useful features because it lets you decide on the maximum portion of your capital you are willing to risk.
Monitor Performance: Remember to regularly review the performance of the traders you are copying. Keep track of any changes you might encounter in their trading style of performance. You would then be able to reconsider your investment in their strategy if things are drifting away from what you expected.
Patience and Long-Term Perspective: Every strategy needs a considerable amount of time to show its profitability. Be patient and trust the traders you followed based on their historical performance. With proper risk management, protect your funds and let them grow in the long term.
Stay Informed and Educated: You must always keep yourself updated about the financial markets and trading. Being an informed investor, you are better equipped to make wise decisions and find the best traders to follow.

Top 5 Copy Trading Apps for Crypto, Forex, and Stocks

You might either be a trader a copier, or even both. Nevertheless, you need to choose your suitable copy trading platform from the best ones available. In this section, we introduce the top copy trading platforms in Crypto, Forex, and Stock markets. Note that some platforms might be present in both lists. Read a more detailed guide on crypto copy trading platforms in this link.

Top Crypto Copy Trading Platforms

While the cryptocurrency market is still relatively young, copy trading is rapidly developing in the space. Here are the top 5 crypto copy trading platforms:

Finestel

Finestel is a trading solution provider and copy trading platform. It mainly offers services in the crypto market while also providing some specialized tools and packages for forex traders. Finestel works with top cryptocurrency exchanges, making it a reliable first choice.

Finestel’s white-label asset management software enables traders and portfolio managers to offer their services under their own brand and use cutting-edge copy trading technology that is arguably the best in the market.

Key Features:

White-label copy trading and asset management software
Transparent trading performance
Flexible pricing
User-friendly
Highly secure
Fully Customizable
24/7 online customer support
Free for the first month
It supports Binance copy trading, KuCoin copy trading, OKX copy trading, and Bybit copy trading.

3Commas

3Commas is a crypto trading platform that offers services like copy trading, bot trading, portfolio management, trading signals, and educational resources. It is a cloud-based platform compatible with a variety of exchanges such as Binance, BitMEX, Huobi, Kraken, Bybit, Coinbase Pro, Kucoin, OKx, and so on. Read more in the 3Commas copy trading article.

Supports several crypto exchanges
Great reputation
Wide range of trading bots and strategies
User-friendly

Bybit

Bybit is a popular cryptocurrency exchange. They offer an internal copy trading feature, meaning that only their own users can utilize it. Bybit master traders earn up to 15% of the gains they make for their followers. Being a user-friendly and reputable crypto exchange, Bybit is one of the best copy trading websites available for crypto.

Key Features:

wide range of traders available
Easy-to-use
Up to 100x leverage
Adjustable preferences and fund allocation options
$10 in BTC as a sign-up gift
Decent customer support
Non-U.S. traders only

PrimeXBT

PrimeXBT is a social trading platform and a cryptocurrency exchange in one. They offer a reliable copy trading service. Users are able to deposit their crypto onto the platform and access the expertise of professional traders. Users can choose their favorite trader by comparing past performance and risk management.

Key Features:

Demo account available
Low costs and fees
Suitable for advanced users

Phemex

Phemex is another cryptocurrency exchange that offers an advanced copy trading service. They offer detailed performance metrics for every master trader. These metrics include ROI, cumulative profit, max drawdown, winning ratio, and more. Therefore, they are also a suitable choice for both investors and traders.

Top 5 Forex and Stocks Copy Trading Platforms

The leading copy trading platforms in traditional markets like forex and stocks are different from those active in crypto. Let us introduce the top stocks and forex copy trading platforms:

eToro

eToro is an online brokerage firm that provides a great copy trading service. Using eToro’s app, you can trade stocks, ETFs, CFDs, forex, and even major cryptocurrencies. Their social trading platform is a combination of a trading platform and a social media network. These features make identifying professional traders and exchanging ideas easy.

Pros:

The most popular copy trading platform with a massive customer base
Zero fees for copy trading
Intuitive app
Great traders
The best social trading platform in the industry
Regulated in the UK, Europe, and Australia

Cons:

A huge number of traders are available which means a lot of amateur traders are included

ZuluTrade

ZuluTrade is one of the best portfolio management and copy trading platforms in the industry. It is excellent for both investors and traders who are looking for suitable trading features and low fees. Zulutrade is highly transparent and offers two types of accounts, one for investors and one for traders.

Pros:

First copy trading platform in the world
A wide range of brokers available
Huge customer base
Low trading fees and commission
High transparency
Secure and reliable

Cons:

Blog and forums are not updated regularly

NAGA

NAGA is a popular forex broker and social trading platform. Copy trading platform is NAGA’s main project. NAGA’s copy trading platform, also known as NAGA Autocopy, is one of the best copy trading services available in the forex market. You can use this platform to identify successful traders and replicate their executions.

Pros:

Social trading network
Detailed reports and performance metrics
Highly regulated
Simple, functional interface

Cons:

High spreads

AvaTrade

AvaTrade is a regulated, reputable brand in the trading industry. They offer an extensive selection of trading platforms. AvaTrade’s copy trading platform, AvaSocial, is one of its top services, offering access to forex and CFD trading. Their pricing is also competitive and they offer their services to a large pool of traders and investors.

Pros:

A wide range of trading instruments is available
Best for professional traders
Regulated in Europe, Japan, Australia, and South Africa

Cons:

Subpar pricing options for retail traders
AvaSocial still needs significant improvement

DupliTrade

DupliTrade is a social and copy-trading platform. It offers a strict selection of master traders. DupliTrade works with a wide range of brokers and is one of the well-known brands in the copy trading industry.

Pros:

A simple platform suitable for beginners
Strict selection of master traders
Regulated by CySEC
No commissions

Cons:

High minimum investment
A small range of traders available
Weak communication channels

Risks and Limitations of Copy Trading

As previously mentioned, any activity in the financial markets includes substantial risks. Copy trading is no different. In this section, we discuss some of the main risks threatening investors (followers) and traders (asset managers). We also address the most prominent limitations associated with copy trading.

Risks for Followers

Loss of Capital: Copy trading does not guarantee profits, as even the most professional and experienced traders can lose money.
Reliance on Master Traders: Followers rely solely on the expertise of the master trader. If the trader goes through a losing streak, followers lose with him. As investors usually lack patience and trust in the trader’s strategy, they might pull out their investment early and at a loss.
Market Volatility: Financial markets can be highly volatile, especially when crises occur. No one, not even an expert trader, is safe from these events, and the followers will be the ones paying the price.

Risks for Master Traders

Increased Pressure: Master traders are susceptible to immense pressure, especially if they are new to asset management. The stress associated with managing other people’s funds, keeping them satisfied, and attracting new investors can harm the trader’s mentality and performance.
Replication Risk: There are always technical risks associated with copy trading. Some of these risks include execution slippage, miscalculations, and outages.
Dependency on Copiers: Some traders might become highly reliant on their copiers. This could make them prioritize satisfying investors and attracting new followers to stick to their trading strategy.

General Limitations

Past Performance is Not Indicative of Future Results: A trader might have an exceptional track record. However, future profitability is far from guaranteed, and even the experts might blow their accounts.
Lack of Personalization: Most copy trading platforms offer little room for customization. There are limited risk management tools and performance metrics available, compared to other parts of the financial industry.

Best Copy Trading Platforms of 2024 in an Infographic

Best Copy Trading Platforms of 2023 in an Infographic

Conclusion

In this article, we introduced the best copy trading platforms available for forex, stocks, and crypto trading. The pros and cons of each platform were stated, providing the reader with valuable insight. We also discussed the benefits, risks, and limitations associated with copy trading and provided some handy tips for success in the long run.

There is no denying the huge role a copy trading platform plays in both the traders and the investors’ journey. Therefore, you should always remember to evaluate the best copy trading platforms available and choose the one that is best suited to your strategy and financial goals.

FAQ

How much does copy trading cost?

The cost of copy trading varies depending on the platform you choose. Some platforms charge subscription fees, while others might charge a fixed percentage of profits as a commission.

How do I choose a copy trading platform?

When choosing a copy trading platform, consider key factors such as regulation, available traders and their performances, fee structure, user interface, etc.

What is the best crypto copy trading platform?

The best crypto copy trading platform can vary depending on individual preferences and markets. Based on the lists in this article, eToro is the best copy trading platform for forex and stocks, while Finestel is the top one in crypto.

What is the best copy trading App in the US?

Copy trading platforms must be highly regulated and required to pass several filters to be able to operate in the United States. All in all, eToro is known as the best copy trading platform in the US.

What is the best copy trading platform in Europe?

AvaTrade might be the best copy trading platform in Europe, as the Central Bank of Ireland regulates it.

What is the best copy trading platform in Asia?

There is no clear winner here. ZuluTrade and NAGA are the most popular platforms in Asia.

What is the best copy trading platform in Australia?

eToro is the most popular copy trading platform in Australia, as it controls a large market share in the continent.

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