What is reverse-copying of trades in FX?
Forex trading involves a high degree of risk. It is said that more than 97% of all Forex traders eventually lose their money. This is usually due to a misunderstanding about the nature of Forex trading on the part of novices, improper risk management techniques, and ill-advised (or mostly non-existant) money management. But a host of other risk factors related to specific risk areas, namely trading risk
, operational risk
, but also transaction risk
, and mediation risk
, serve to vaporize aspiring FX traders' entire deposits on a regular basis.
That said, there is money in Forex trading – if done right! The big banks and hedge funds know this all too well. But even such heavyweights on the Forex markets are not immune to catastrophic loss – be it by human trading, or algorithmic trading. The latter concept is widely used nowadays, as recently brought to the forefront once again by the heightened attention focused on a "leap second" added to UTC time, so as to get in line with Atomic Time. A one-second delay is an eternity in algo trading, and developers had their hands full making sure the huge data processing centers used for algorithmic trading on the outskirts of New York City would accommodate this time change.
The message is simple ... no pun intended ... follow the K.I.S.S.-principle (Keep It Simple, Stupid)! This applies to all facets of life, but especially to the use of EAs and other software, signals inputs, and the like on your trading accounts: Never deploy multiple EAs on one trading account! Never deploy one EA on multiple currency pairs! Instead, segregate your trading accounts into multiple (for example 5) autonomously traded MT4s to manage this trading risk. Like the bulkheads in a ship, this serves to limit the trading risk emanating from any unfolding currency-specific market developments probably to only one or two accounts.
Which brings us to the issue of reverse-copying. It is easier to run a business into the ground, or against the wall, rather than make it successful. And usually, it is easier to identify, to foresee what will go wrong, not what will go well! You could identify specific currency pairs which are highly likely to go down, go short on these, and go long on the opposing pairs – but on a separate account. This is one possible use of the reverse-copying function in Forex Copier v.2 between the "short" and the "long" account. By the way, when using Forex Copier v.2
it is not a problem if the "short" account is a demo account – not risking any actual capital at all!
But some traders take a more broad, and indeed more relaxed approach. If you have a decent amount of capital to venture, and a Forex VPS hosting multiple MT4s
, you can copy the source of probably losing trades, convert each market action to the reverse (winning) effect on your account, while using a delimiter-EA to prevent any disasters from happening (such as reverse-copying of unexpectedly fantastic wins from the source account). Most trades go bust – for whatever reason. Do the math! If on average 97% of all trades lose, and you reverse-copy 5 separate trades from any given 5 novice traders onto 5 separate MT4s installed on your own Forex VPS
, you stand a good chance of profit on probably at least 4 of those accounts! All of this while you are lounging at the pool, instead of staring at your computer screen!
Make money on losing trades!
It's your very own, very simple take on automated trading, or algo trading, and all you need for this are:
- A Forex VPS, accommodating multiple MT4s
- Forex Copier v.2 together with the free Add-On Forex Remote Copier
- Five (for example) novice trader friends whom you'll be happy to help with advice to improve their own performance ... after *) having evidence of their failure by way of your own positive account balance!
"after" not out of mischief, but because experience shows that no matter how many warnings of goodwill one may give a new trader beforehand, driven by ignorance, overconfidence, and sheer greed, they will always botch the job anyway!
So, the word to all novice traders is clear: Rather than betting your entire venture capital on one trading account, follow a strategy of diversifed risk management! By using reverse-copying the odds that are usually stacked against you now have a higher chance of working in your favor! (By the way ... that is what trading is all about).
All you need is your very own piece of server real estate – a Forex VPS account suitable for hosting multiple MT4s
– and the Forex Copier software
. Then open an account with one of the mainstream online Forex brokers who offer a social trading platform ... and start making friends! Then, learn from their mistakes, not your own ... while simultaneously cashing in on them.