Best Copy Trading Platforms UK

My best rated copy trading platforms in the UK, April 2024

1. eToro – Best overall
2. Pepperstone –  Best for MT4
3. AvaTrade – Best for CFDs
4. IG – Best for tools and research
5. FXTM – Best for forex

5 quick steps to start copy trading now

Now that you know about some of the best copy trading platforms in the UK, you are likely excited to start copy trading.

Doing so is relatively simple, just follow my simple step-by-step guide and you’ll be a copy trader in no time.

1. Choose a broker that supports copy trading and open an account

Before you can start copy trading, you first need to open an account with a broker that supports it.

Using my list above, you should compare each broker and figure out which best suits you.

For example, if you were planning on trading large volumes of shares, you may want to consider using a broker that has lower trading fees.

Or, if you’re still a beginner, you may want to use a broker that offers educational and research materials so you can develop your trading skills as you invest.

When you’ve decided which broker you want to use, you should then open a trading account.

You may be asked to supply the broker with forms or information that will help them to identify you, such as your driver’s license or a P60 form.

2. Research and decide which investors you wish to copy

When you’ve opened an account with a broker, the next step is deciding which trader you want to copy.

You should look for traders that invest in the type of security you wish to purchase. For example, there’s no point in copying a stocks and shares trader if you want to trade cryptocurrency.

Traders will also typically display their total gains and trading history, so you should ideally look to copy a trader that has plenty of market knowledge and a track record of successful investments.

3. Deposit the amount of money you plan on investing

After you’ve researched the different traders available to copy, the next step is depositing funds into your brokerage account.

Again, this is simple enough; just find the “deposit” option, input the amount of money you wish to invest, and make the transfer.

You may find that some brokers have a minimum deposit requirement when you first open an account. If this is the case, you may not need to deposit any more money than this.

Also, you may want to avoid depositing more money than you intend to invest, as you are unlikely to earn interest on any uninvested money sitting in your trading account.

4. Use your money to copy the investments of an investor

Now you’re finally ready to start copy trading. You should find an investment made by an experienced trader and purchase your stake in the asset.

You should also decide whether you want to copy the trader’s investments verbatim, or whether you want to make some changes. For example, if a trader is investing large sums of money, and you don’t have enough to match their trades, you can decide to invest in a small portion of that security.

I explain more about how this works later in my guide.

5. Monitor your investments closely and close them when the time is right

Even though you’re now a copy trader, the hard work doesn’t stop here.

You ideally need to monitor your investments closely and watch for any price movements that may occur.

Of course, you can decide to sell off your investment when the experienced trader you’re copying does.

Though, you can close your position whenever you wish. This may especially be the case if you feel like the trades from the trader you’re currently copying aren’t working out.

Useful information

What is copy trading?

As the name suggests, copy trading is simply when you mirror the trades of other investors. These might be professional investors, or simply other retail investors who understand the markets and have been successful in the past.

Copy trading is an offshoot of social trading, of which mirror trading is another.

Copy trading offers a fantastic way to invest for beginners. This is because, if you aren’t comfortable making your own investment decisions, you can follow the lead of other, more experienced traders.

Even if you’re already an experienced trader, copy trading could still come in handy to help you trade on financial markets you aren’t completely familiar with and give you inspiration for trading ideas.

For example, say you wanted to get exposure to American financial markets. If you didn’t have a deep enough understanding of American economics and politics, you could use copy trading to copy the investments of those who are familiar with them.

Copy trading on forex markets is especially common, as forex price movements are often small and difficult to track properly. So, with copy trading, you can copy another trader’s positions rather than meticulously monitoring forex price movements and conducting market analysis.

How does copy trading work?

On copy trading platforms, professional or experienced traders will broadcast their investments across the broker’s social trading platform.

You and other traders can then see these experienced traders’ investments and decide to copy them.

This can either be done manually, or automatic trades can be set up without any input needed from you.

Is copy trading profitable?

Copy trading does have the potential to be profitable, depending on how you invest.

If you do adequate research into the trader you wish to copy and find that they make many successful trades, or seem to know what they’re doing, then you could potentially profit from copying their investments.

Of course, no investment is risk-free and you could lose value on your investment.

Is copy trading safe?

Despite having the potential to be profitable, there are considerable risks involved with copy trading that you should keep in mind before you start investing.

Indeed, even if you’re copying successful traders, this doesn’t mean they know exactly how financial markets are going to move.

In fact, no one does, so you aren’t completely free of risk from bad investments when you copy trade.

There is also liquidity risk when you copy trade. This is when, due to a lack of demand for a particular security, you struggle to sell your assets when the time comes to offload them.

If you’re copy trading manually, there’s a chance that you won’t be able to close your position at the same price as the trader you’re copying.

How to manage risk when copy trading

One method of managing risk when you copy trade is asset allocation.

This is effectively a form of diversification, where you only allocate a portion of your capital to a certain strategy.

By doing so, you can avoid having all your eggs in one basket, and if a specific strategy goes wrong, you won’t lose all of your money.

Copy trading vs mirror trading

Both copy trading and mirror trading are forms of social investing, with a few differences between them.

Mirror trading is generally better if you’re looking to invest large sums of money in a wide range of securities.

This is because mirror trading typically automatically copies the trades of professional investors chosen by the broker, using signals provided by the platform.

On the other hand, copy trading typically involves smaller sums of money, and instead of automatically copying the trades of a set of investors, you instead choose which investors you wish to copy.

Copy trading does typically give you more control over how your money is invested since you are the one manually making your own decisions.

Of course, copy trading can also be done automatically, but it may be worth looking for a broker that offers a mix of both copy and mirror trading.

What securities can you copy trade?

When you copy trade, you aren’t limited to just stocks and shares – you can copy trades on a wide range of different securities.

So, keep reading to find out what these securities are, and the best ones to trade.

Stocks and shares

The first thing that likely comes to mind when you think of investing is stocks and shares.

Stocks and shares investing involves buying a small share in a company. When you do this, you essentially own a tiny part of the company you invested in.

Now, this doesn’t mean you’ll be able to take control of the company when you purchase stocks and shares, as you are only buying a small fraction of the shares issued by the company.

A company will typically issue stocks and shares to raise money to operate its business and fund projects.

Even though stocks and shares can be sold relatively quickly depending on the liquidity, they are seen as more of a long-term investment.

This is because, to generate returns from selling your shares, you usually need to wait until they have risen in value.

Some companies also offer dividends to investors, which are regular payments made to you depending on how many stocks and shares you hold.

It’s worth keeping in mind that not all companies offer dividends. So, if you want to invest for income, you should first double-check that the company offers dividends in the first place.

Derivatives

Derivative trading is essentially a form of “betting” where you stake money on the future price movement of a security.

You can speculate on a wide range of securities, from stocks and shares to forex currency pairs.

When you trade derivatives, you aren’t purchasing the underlying asset. You are instead betting on how that underlying asset will perform.

There are two main types of derivative trading: spread betting and CFDs.

But what’s the difference between the two? Continue reading to find out what you need to know.

It’s worth keeping in mind that derivatives are complex trading instruments, and more than half of retail investor accounts lose money when trading CFDs and spread bets.

Spread betting

Spread betting is a form of derivative trading that involves opening a position on an asset or security and predicting how it will perform.

Depending on how the security you bet on performs will dictate your profits, or indeed losses.

If you predict that an asset will increase in value, you could open a long position.

Though, if you thought the asset would drop in value, you could instead open a short position.

So, to give an example of how spread bets are calculated, imagine you wished to open a short position against Apple, as you think the value of Apple shares will fall.

You could stake £100 against every point of downward movement that Apple makes. If the share price of Apple then dropped by two points, you would earn £200.

Conversely, if Apple’s share price increased by two points, you would instead lose £200.

As spread betting is considered to be gambling rather than investing, any returns you generate will typically not be subject to Capital Gains Tax (CGT).

CFDs

“Contracts for difference”, or CFDs, on the other hand, also involve staking money on a security, with a few differences.

When trading CFDs, you will instead receive the difference in price from when you first opened the contract.

Thanks to leverage, you typically won’t pay the full amount for a trade. This is because your broker is essentially “lending” you money to make a trade, which is called the margin.

Leverage does make it “cheaper” to make trades, though if your trade doesn’t go your way, you may end up paying more money than you initially put in.

For example, say you purchased 100 long CFDs for Apple, and the company’s share price at the time was $200.

Your total trade cost would be $20,000. But, say you had leverage of 10:1, then you would only be required to pay $2,000 to meet the margin.

If Apple’s share price later rose to $250 a share, you would gain the difference between the opening price and the closing price of the asset, which in this case would be $50.

Your profits would then be calculated using the difference in price, which is $50, and the number of contracts you hold, which is 100.

In this example, your total profits would be $5,000.

This is where CFDs get their name; your profits are calculated from the difference between the opening and closing prices.

Of course, had Apple shares moved the other way by $50, you would incur losses of $5,000, even though you only had to invest the margin of $2,000.

Unlike spread bets, CFDs are also typically subject to CGT.

Again, please remember that these are high-risk investing strategies and you could lose more money than you invested. Seek independent investment advice if you’re unsure whether these are suitable options for you.

Forex

Forex trading involves investing in foreign currencies on a global marketplace.

When you trade forex, you will typically see that currencies are paired together. These are conveniently called “currency pairs”.

These currency pairs are split into two categories: major and minor pairs.

Major pairs are more commonly traded pairs of currencies, such as GBP/USD or EUR/USD. These tend to have a higher liquidity, meaning you can trade them whenever you wish.

Minor pairs, on the other hand, are less commonly traded currencies, such as GBP/EUR or GBP/JPY. These are typically far less liquid, and they can sometimes be more volatile due to their low trading volume.

When you trade forex, you will typically speculate on currency pairs to turn a profit. For example, you could purchase a stake in the GBP/USD currency pair and wait until the value of the dollar rises relative to the pound, after which you can sell your stake for a profit.

Forex can be found on global markets that are open 24 hours a day, seven days a week, unlike the traditional stock market.

This is because the markets deal with currencies right across the globe that are located in differing time zones. So, the forex market needs to be open 24/7 if traders are to access different currencies.

It’s worth keeping in mind that forex and CFD trading are both complex financial instruments. You should do adequate research before you start investing in these ways, or else you could end up losing money rapidly.

What’s the best security to copy trade?

Much like there isn’t a “best copy trading platform”, there technically isn’t a “best” security to trade either, as different securities will suit different investors.

For example, if you’re still a complete beginner to investing, you may want to consider sticking to stocks and shares. This is because they tend to be slightly easier to get your head around compared to derivatives or forex trading.

Stocks and shares may also be suited to those who want to invest on a long-term basis. This is because you typically need to hold stocks and shares for a longer period before they appreciate in value.

Derivatives and forex trading, on the other hand, tend to be shorter-term investments.

The pros and cons of copy trading

As with most things, copy trading comes with both benefits and downsides.

These pros and cons should be weighed carefully in your mind before you start copy trading, so continue reading to find out exactly what these are.

The benefits

• It can be great for beginners

When you’re still a beginner to trading, it can sometimes be tricky to decide what to invest in.

This is where copy trading is fantastic for novice traders. Copying the trades of investors who typically know what they’re doing can offer a great springboard to start investing.

Also, when you copy trade, you don’t need to do as much market analysis as you might with traditional trading. Rather than studying technical indicators or employing a particular trading strategy, you can simply place some of your trust in the professional or experienced investors you’re copying.

Despite this, it may be worth not placing your full trust in the investors you copy. This is because no one can fully predict how stock markets will move, regardless of how experienced they are.

• You can trade on many different markets

As mentioned, copy trading can be done on a wide variety of different securities, including:

• Stocks and shares
• Derivatives
• Forex markets.

This diverse range of markets you can trade on gives you a degree of control over how your money is invested.

• You could become part of a community

One of the great things about copy trading, and more specifically social trading, is that it builds a community for investors.

You aren’t limited to just copying and sharing your trades, you can also chat and interact with other investors.

This could potentially bring you closer to other traders, as well as improving your trading skills as you go.

• It could help if you’re not confident making your own investment decisions

Potentially one of the greatest things about copy trading is how it gives you the chance to learn about trading as you go.

If you aren’t confident making your own investment decisions, you can build your knowledge by copying the trades of more professional investors.

The downsides

• It can be risky

As has been previously mentioned, no trader can perfectly predict how a market will move.

Even the best trader is going to have a bad day should markets take a sudden downturn. If you are copying traders, and their investments decrease in value, so will yours.

This is why you shouldn’t place all of your trust in copy trading and should do your own market analysis.

• You typically have less control over your investments

Since you are depending entirely on the investments of the trader you’re copying, you typically have less control over how your money is invested.

If you’d prefer to have more of a say over your investments, copy trading may not be the best option for you.

• You could get too comfortable and make mistakes

If you place all of your trust in a particular trader, you could end up getting too comfortable and complacent.

This could result in you making poor investments based on those of successful traders. So, it’s essential that you remain wary when you copy trade.

• You may not learn as fast as you might when choosing your own investments

Social investing is typically great for beginners, but if you’re still learning the ins and outs of trading, copy trading may hinder you slightly.

This is because, when you’re copying investments rather than researching and choosing your own, you aren’t learning as much.

So, if you’re still relatively new to trading, it may be worth using any educational materials provided by the broker as well as copying experienced traders. This way, you can hone your investing skills while you trade.

Best Copy Trading Platforms UK FAQs

Please note

CFDs are complex financial instruments and more than half of retail CFD accounts lose money when trading CFDs. Please make sure that you know these risks before you start trading and that you’re aware there’s a high chance of losing money rapidly on your investment.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.