Before starting your experience in copy trading, you should understand the difference between fixed rates and pro-rata, and realize the conditions of your subscription.
Fixed Copy Trading
That’s the most popular subscription type among many traders. But not many of them realize all the pros and cons of that trading type. A customer may choose the minimum bet amount, reducing the risk of loss and protecting his investment. But is that reallyso? Our unambiguous answer is “no”. Researching all the possibilities of Forex and binary options copy trading, we noticed both a high potential and unnecessary risks.
Let’s review the example when a trader makes 5 bets with the fixed rate of $5
|Pro trader||Copy Trader|
As you can see from that result, a Pro trader gained some profit, while he could “try” the market via small bets, and opened the positions by spending little amounts, awaiting the changes of graphic movement direction. The Pro trader gained some profit, but a copy trader lost a part of his investment. Of course, the example doesn’t show the best situation for a copy trader, but you have to realize the risks.
Pro Rata Copy Trading
Many copy traders do not pay much attention to different parameters which can influence the result when using that subscription type. One of the main parameters is a size of a stop-loss investment.
What is a stop-loss? That’s the amount, which cannot be exceeded by the pro trader when having losses. For example, you have set a $100 stop loss. As soon as a pro trader loses $100, you automatically unsubscribe from copying that pro trader, even if your profit was 1000%.
Let’s have a look at the example of using pro-rata when the subscription is 100% and pro-rata is $100