AI Trading Vs. Copy Trading: Which is Better for Successful Forex Trading?

AI trading and copy trading are two of the most revolutionary and profitable trading techniques nowadays. Artificial intelligence (AI) and advanced technologies have reshaped the world of investment in the past few years. Trading has been made easier and financial markets entice new investors every day. Not only for beginners, AI helps traders to overcome many trading obstacles and have more profitable investments. Let’s discuss both AI trading and Copy trading and how they helped in creating a better forex trading experience.

What is AI Trading?

AI trading is implementing Artificial Intelligence (AI) to analyze, predict and automatically execute trades on one or more currency pairs using pre-set rules for entering and exiting. Using automated trading systems (ATS) is more efficient in detecting the ideal entry and exit points based on price movements with less human intervention and taking emotion out of the equation. Based on predefined price algorithms, artificial intelligence bots search the market for the best trading opportunities, making AI trading more efficient, safe, and a simple way to trade in the forex market.

AI trading is very useful for traders who lack the time to monitor the market, but still want to trade according to a specific trading strategy. Using an AI trading system enables forex traders to open multiple trades in a short period of time, with the added benefit of taking emotions out of trading decisions. This is because all the trading rules are already built into the trading bot and trades are executed without personal interference or emotional engagement. Some AI algorithms allow traders to implement pre-determined strategies to follow trends and trade accordingly.

What are the Benefits of AI Trading?

In order to be a successful forex trader, one should observe different market trends, understand all the factors that may affect the prices, and follow both long and short-term price movements based on technical and fundamental factors. This is not an easy task for many investors. Some traders choose to educate themselves about market cycles and price movements, while others prefer to use AI trading to make better trading decisions. Using artificial intelligence (AI) in trading enforces discipline, as every trade will be executed according to a pre-defined methodology.

This can provide flexible trading that fits individual trading and executing trades automatically, at any time. It helps in controlling emotions and sticking to identified strategies, detecting new opportunities, and analyzing price trends, with a wide range of indicators, and executing multiple trades simultaneously.

  • Stress-free Trading: When you trade manually, your trading decisions can be easily dominated by your emotions; greed or fear. Using an AI trading system will enable you to follow your trading rules without hesitation and avoid emotional trading.
  • Saving Time and Money: By automating your trades, you won’t have to spend long hours monitoring price charts, applying your trading strategies or placing orders. All you have to do is set up the AI system on your trading platform.
  • Better Trading Performance: AI trading systems help you meet your trading objectives; as your decisions are based on formulas developed by experts and experienced traders. They are algorithmic, so they behave according to the inputs programmed into them and developed by testing the historical data.

What is Copy Trading?

Copy trading is the process of copying a professional trader’s positions by another trader’s account. It can be performed either automatically or manually. Copy trading technique aims to follow other investors who have a track record you would like to emulate. It allows the follower trader to monitor and learn from the strategies of top successful traders.

Copy trading best suits traders who don’t have time to keep up with the market or still lack the experience to trade on their own. It is preferably used in short-term trading like day trading​ and swing trading.

However, like any trading approach a trader decides to employ, it’s advised to check the trading record before deciding to risk real capital. Remember that even by following the strategies of an experienced trader, your capital can still be at risk.

What are the Benefits of Copy Trading?

Studies show that people who carefully choose their traders based on statistics and portfolios are up to 10% more successful than people who trade manually or choose their traders based on personal preferences.

Copy trading offers multiple trading benefits which can allow traders to explore a variety of investment goals with lower risks. Investors are usually keen to discover opportunities while they have limited access to advanced technical analysis or they might be at the beginning of their trading career. Therefore, copy trading can expand the opportunities and secure the risks to the minimum level.

  • Learning from Top Traders: Copy trading is highly effective to explore the market and monitor the professionals as they open their positions and apply strategies. Following top professional traders can help in gaining experience with minimized risks.
  • Exploring New Trading Strategies: Applying copy trading gets traders exposed to new trading techniques, ideas and strategies followed by successful traders, of which they may never heard of anywhere.
  • No Need to be a Forex Expert: That is a huge feature making it suitable for forex beginners. The follower traders are not required to demonstrate technical or fundamental analysis to enter the market since the money manager is the one who is in control of the trading strategy and setting the take profit levels. Ideally, analysis skills are required in order to have a better understanding of your investment value and risks, however, it is not required to master the analysis or to be an expert to copy other professionals.
  • Diversifying Trading Portfolio: One way to further diversify your portfolio is by copying various traders using different financial instruments. It also helps traders to explore different trading strategies. If you use copy trading, you may consider copying multiple investors. Copy trading can be easily applied to forex, cryptocurrencies, stocks, and other volatile markets. It is never limited to specific markets or trading instruments.

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