Best Copy Trading Platforms

What is copy trading?

Copy trading is an investment method that allows traders, whether beginners or experienced, to automatically replicate the strategies of other, more seasoned investors. This approach is particularly popular in CFD (contracts for difference), cryptocurrency, Forex and stock trading.

How copy trading works

The principle of copy trading is simple: an investor (called a "copier") selects an experienced trader (called a "strategy provider") and configures their account to automatically reproduce their positions. When a copied trader opens or closes a position, this action is replicated in real-time in the copier's account, in proportion to the capital invested.

Why choose copy trading?

Copy trading has several advantages, including:

• Accessibility: It allows beginners to invest in the financial markets without needing advanced trading knowledge.
• Time-saving: Investors don’t need to analyse the markets themselves or make complex decisions.
• Diversification: It’s possible to copy multiple traders and thus spread the risks.
• Progressive learning: By following the strategies of experienced traders, investors can understand market mechanisms and refine their own trading strategy.

What is a copy trading platform?

A copy trading platform is an online service that allows investors to automatically copy the strategies of more experienced traders. These platforms act as intermediaries between professional traders (or strategy providers) and investors wishing to replicate their operations.

They offer risk management tools, performance tracking features and customisation options to adapt the copy trading strategy to one's own financial goals.

Copy trading platforms work by connecting users' accounts to those of the traders they wish to follow. Here are the main steps:

• Registration on the platform: the user creates an account and deposits funds.
• Selection of a trader to copy: they can filter traders based on their performance, risk level, trading style, and other criteria.
• Configuration of parameters: the user chooses the amount they want to invest and adjusts parameters such as the risk level or leverage.
• Automation of transactions: once copy trading is activated, the positions of the selected trader are automatically replicated in the investor's account.

Copy Trading and Social Trading: What are the Differences?

Copy trading and social trading are often confused, but they have notable differences. Both allow investors to draw inspiration from the strategies of other traders, but their approach and operation vary.

• Copy trading is an automated process where an investor directly copies the trades of an experienced trader. Once the strategy is chosen, the orders are replicated without manual intervention.
• Social trading, on the other hand, relies more on the exchange of information and individual decision-making. Traders share their analyses, strategies, and performance, but each investor manually chooses the transactions they want to execute.

What social trading solutions are offered by brokers in Australia?

In Australia, several brokers offer social trading and copy trading solutions to allow investors to follow and copy the strategies of experienced traders. These solutions are often integrated directly into the trading platforms or accessible via specialised software. Here's an overview of the most popular software and the brokers that offer them.

How to choose a copy trading platform?

Choosing a copy trading platform is an essential step in maximising your chances of success while minimising risk. Several criteria must be taken into account to select the platform that best suits your needs and investor profile.

1. Regulation and Security

When selecting a copy trading platform in Australia, it's crucial to ensure the platform is regulated by a reputable financial authority. In Australia, the primary regulatory body overseeing financial markets is the Australian Securities and Investments Commission (ASIC).

Platforms offering copy trading services must hold an Australian Financial Services Licence (AFSL). This licence ensures that the platform adheres to strict standards, including:

• Segregation of Client Funds: Client funds must be kept separate from the company's operational funds, providing protection in case of the platform's insolvency.
• Transparent Operations: Licensed platforms are required to operate transparently, providing clear information about fees, risks, and trading practices.
• Investor Protection: ASIC-regulated platforms are obligated to act efficiently, honestly, and fairly, ensuring a higher level of investor protection.

2. Available traders to copy

The diversity and quality of the proposed traders are key elements. It is advisable to choose a platform offering filtering tools to analyze the performance of traders:

• Historical performance
• Risk level
• Trading strategy (short term, long term, scalping, etc.)
• Maximum drawdown

Some platforms also offer performance scores to make it easier for traders to choose who to copy.

3. Accessible assets and markets

Australian traders have access to a diverse range of financial instruments through various trading platforms. When choosing a copy trading platform, consider the variety of assets available to ensure alignment with your investment goals.

• Forex: Major currency pairs like AUD/USD, EUR/USD, and USD/JPY are popular among Australian traders. The Australian dollar (AUD) is one of the most traded currencies globally, influenced by commodity prices and economic indicators.
• Stocks: Investors can trade shares of both domestic and international companies. The S&P/ASX 200 index includes prominent Australian companies like BHP, Commonwealth Bank, and Telstra.
• Indices: Global indices such as the S&P 500, FTSE 100, and Nikkei 225 are accessible, allowing traders to diversify their portfolios across different markets.
• Commodities: Platforms offer trading in commodities like gold, silver, crude oil, and natural gas, providing opportunities to hedge against market volatility.
• Cryptocurrencies: Digital currencies such as Bitcoin, Ethereum, and Ripple are increasingly popular. However, it's essential to note that cryptocurrency trading is subject to specific regulations, and traders should ensure compliance with local laws.

4. Fees and Commissions

Copy trading platforms apply different fee structures, which can impact your profitability. Here are the main costs to analyse:

• Spread: the difference between the buying and selling price of an asset
• Commission per trade: some brokers charge a percentage on each transaction
• Inactivity fees: fees may apply if you do not make transactions for a certain period
• Profit sharing: some platforms charge a percentage on the profits made through copy trading

5. Features and User Experience

A good copy trading platform should offer an intuitive interface and powerful tools to manage your investments effectively. Key features to look for include:

• Demo mode: test the platform with a virtual account before investing real money
• Risk management tools: stop-loss, take-profit, adjustment of invested capital
• Advanced charts and graphs: real-time analysis of the performance of copied traders
• Mobile app: access investments on the go

6. Platform Reviews and Reputation

Checking user reviews and ratings on specialized sites like Trustpilot or trading forums provides an overview of the advantages and disadvantages of each platform. Focus on those with a good reputation in terms of:

• Reliability of transactions
• Responsive customer service
• Ease of withdrawing funds

7. Customer Service and Support

Good customer support can make all the difference in the event of a technical problem or a question about how copy trading works. Check:

• Contact channels (online chat, email, phone)
• Availability (24/7, opening hours)
• Support language (French or English)

What assets can you trade with copy trading?

Copy trading allows you to invest in a wide range of financial assets, depending on the markets offered by the platform chosen. Some assets are more suited to copy trading strategies due to their liquidity and volatility. Here is an overview of the main assets accessible via copy trading.

How to practice copy trading with an online broker?

Copy trading with an online broker is a simple process that allows investors to copy the strategies of experienced traders. Here are the main steps to get started and optimize your copy trading experience.

1. Choose a broker offering copy trading

Not all trading platforms allow copy trading. It is therefore essential to choose a broker that offers this functionality and is regulated by a recognised financial authority (ASIC, CySEC, FCA, etc.). Some of the most popular platforms include eToro, ZuluTrade, MetaTrader 4/5 (with signals), DupliTrade and Myfxbook AutoTrade.

Criteria to check before choosing a broker:

• Regulation and security of funds
• Available assets (Forex, stocks, cryptos, indices...)
• Fees and commissions applied
• Quality and number of traders to copy
• Risk management tools and platform ergonomics

2. Create an Account and Verify It

Once the broker has been selected, you need to open a trading account by providing personal information and completing the KYC (Know Your Customer) verification, which involves submitting:

• A valid form of identification
• Proof of address
• A payment method to deposit funds

Certain brokers allow access to a demo account, which is useful for testing the platform and its interface before investing real money.

3. Depositing Funds into Your Trading Account

After the account is validated, the investor must fund their trading account. Brokers generally offer several deposit methods:

• Bank card (Visa, Mastercard, etc.)
• Bank transfer
• Electronic wallets (PayPal, Skrill, Neteller, etc.)
• Cryptocurrencies (on some platforms)

The minimum deposit amount varies depending on the platforms (from $50 AUD to several hundred Australian dollars depending on the broker and the asset chosen).

4. Select a trader to copy

Choosing the trader to copy is a key step to succeeding in copy trading. Platforms provide various criteria to analyse traders:

• Past performance (return over several months/years)
• Risk level (the more risk a trader takes, the greater the variations in their capital)
• Strategy used (short term, swing trading, scalping...)
• Maximum drawdown (maximum loss recorded)
• Number of copiers and reputation

Certain platforms like eToro assign risk scores to traders, allowing you to assess the stability and reliability of their strategy.

5. Define the amount invested and adjust the parameters

Before copying a trader, the investor must decide on the amount they wish to allocate to this strategy. Several risk management options are available:

• Fixed amount to invest: choose a specific amount to be used to copy the trader
• Automatic stop-loss: set a maximum loss not to be exceeded
• Copy level adjustment: some platforms allow trades to be copied in proportion to the capital of the followed trader

6. Monitoring and adjusting your copy trading strategy

Copy trading is a passive method, but it's recommended to regularly monitor the performance of the copied traders and adapt your strategy if necessary.

Best practices to optimise your copy trading:

• Diversify by copying multiple traders to limit risks
• Regularly check performance and adjust investments if needed
• Do not panic in the face of market fluctuations and remain consistent with your strategy
• Get trained in parallel to better understand how the market works

What are the fees of brokers offering copy trading?

Copy trading platforms apply different types of fees that can affect the profitability of investors. It is essential to fully understand these costs before choosing a broker, as they vary depending on the platforms and assets traded. Here's an overview of the main fees encountered in copy trading.

1. Spreads: an indirect cost on each transaction

The spread is the difference between the buying price (bid) and the selling price (ask) of an asset. It is an indirect cost that the broker automatically includes in each transaction, which means that the investor must cover this cost before being profitable on a trade. The higher the spread, the greater the cost of trading.

Example of spread on copy trading

An investor copies a trader who opens a position on the EUR/USD with a spread of 1.5 pips. This means that when the position is opened, they are immediately at a slight loss equivalent to these 1.5 pips. If the market does not move sufficiently in their favour, the transaction may be unprofitable.

2. Transaction Fees: Percentage or Fixed Amount

Some brokers apply a commission to each transaction made, in addition to the spread. This commission can be a fixed amount per order executed or a percentage of the amount invested. Brokers who use this model often offer tighter spreads.

Example of copy trading commission

An investor copies a trader who specialises in stocks. With each purchase or sale of a stock, a commission of 0.1% is charged.

• If they invest $1,000 AUD in a stock, they will pay $1 AUD in fees when opening the position.
• If they close this position later for $1,200 AUD, they will pay another $1.20 AUD commission.

Thus, their total fees on this transaction will be $2.20 AUD.

3. Management or Performance Fees: A Portion of Profits Paid to the Broker

Some copy trading platforms charge a commission on the profits made from copied positions. This model is generally used by brokers who offer professional traders to copy and who apply a profit-sharing policy.

Example of management or performance fees

A broker applies a performance fee of 20% on profits generated via copy trading.

• If an investor makes a profit of $500 AUD by copying a trader, they will have to pay $100 AUD to the broker (20% of $500 AUD).
• They will therefore have $400 AUD net of fees.

This type of fee is often justified by the quality and expertise of the traders offered by the platform.

4. Inactivity fees: a cost for unused accounts

Brokers sometimes impose inactivity fees if a trading account remains inactive for an extended period (often 3 to 12 months). These fees are charged monthly as long as the user does not carry out any transactions.

Example of Inactivity Fee

A broker applies an inactivity fee of $10 AUD per month after 6 months without a transaction.

• An investor who has not used their account for 8 months will have to pay $20 AUD in cumulative fees.
• To avoid these fees, they can simply make a transaction before the deadline.

This type of fee is particularly important to monitor if you plan to use a platform occasionally.

5. Withdrawal fees: a cost to recover your earnings

Some brokers charge fees on withdrawals, especially when the investor uses a bank transfer. These fees may be fixed or proportional to the amount withdrawn.

Example of withdrawal fees

An investor wants to withdraw $500 AUD from their trading account. The broker applies a fixed fee of $5 AUD on each withdrawal.

• In the end, the investor will receive $495 AUD in their bank account.

These fees can be avoided or reduced by choosing platforms that offer free withdrawals or by using alternative payment methods such as e-wallets (PayPal, Skrill, Neteller).

Is copy trading suitable for beginners?

Copy trading is often presented as an ideal solution for novice investors, as it allows them to automatically copy the strategies of experienced traders. However, while this method facilitates access to financial markets, it is not entirely without risks. Here is an overview of the advantages and limitations of copy trading for beginners.

The advantages of copy trading for beginners

• No expertise required: Unlike traditional trading, which requires in-depth market analysis, copy trading allows beginners to invest without having to master technical concepts such as technical or fundamental analysis.
• Progressive learning: Observing the strategies of experienced traders allows novices to understand market mechanisms and learn to better manage risks over time.
• Time saving: As copy trading is automated, there is no need to monitor the markets constantly. Orders are executed in real time, without manual intervention.
• Simplified diversification: Platforms allow you to copy multiple traders at the same time, which offers a better distribution of risks and avoids betting everything on a single strategy.
• Access to different asset classes: By copying several specialised traders, it is possible to invest in various assets (Forex, stocks, cryptos, commodities, etc.) without requiring in-depth knowledge of each market.

The limits and risks for beginners

• Dependence on the performance of copied traders: Copying a trader does not guarantee profits. Even experienced traders experience losses, and it is possible to copy a strategy that proves ineffective in the long term.
• Lack of control over investment decisions: Unlike manual trading, copy trading leaves little room for customisation. The investor automatically follows the decisions of the copied trader, which can be frustrating in the event of a decline in performance.
• Risk of amplified losses: Some traders use high leverage, which can lead to significant losses if the market moves unfavourably. It is crucial to analyse the level of risk before copying a trader. The maximum leverage allowed for retail traders in Australia according on the regulation.
• Fees that can reduce profitability: Some brokers charge fees on copy trading (commissions, spread, performance fees, etc.), which can impact the profits of beginner investors.
• The absence of guaranteed results: Even by copying a successful trader, the financial markets remain unpredictable. Past gains never guarantee future performance.

What strategy with copy trading?

Copy trading allows you to adopt different strategies depending on your investor profile, your risk appetite and your financial objectives. Some approaches favour stability and security, while others aim for higher returns by accepting a higher level of risk.

How to become a trader to follow for social trading?

Becoming a trader to follow on a social trading platform requires much more than just financial performance. You need to demonstrate a reliable strategy, good risk management and transparency that inspires confidence in investors wishing to copy your transactions.

Firstly, it's essential to define a clear and reproducible trading strategy. Investors favour traders whose performance is stable and consistent over the long term. Whether it's scalping, swing trading, or long-term investing, a well-defined approach applied with rigour helps to gain credibility. Good risk management is also crucial: limiting drawdown, avoiding excessive leverage, and not exposing all of one's capital in a single position reassures potential copiers.

Transparency is another key element. The most followed traders on copy trading platforms regularly share their analyses, decisions, and results. Publishing updates, explaining positions, and being active in the community helps attract copiers and retain existing ones.

Finally, a regular presence and interaction with copiers builds investor confidence. Some brokers even offer financial incentives to traders with a large number of followers. The more confidence the trader inspires, the more likely they are to be copied and increase their income through copy trading.

What is the taxation on income from copy trading in Australia?

In Australia, profits from copy trading are subject to taxation, and the specific tax treatment depends on factors such as the type of assets traded, the holding period, and whether the trading activity is considered a business.

Capital Gains Tax (CGT)

For most individual investors, gains from copy trading are treated as capital gains. The tax rate applied depends on how long the asset was held before being sold:

• Short-Term Capital Gains: Assets held for less than 12 months are taxed at your marginal income tax rate.
• Long-Term Capital Gains: Assets held for 12 months or more may be eligible for a 50% CGT discount, effectively reducing the taxable gain by half.

It's important to note that capital losses can be used to offset capital gains but cannot be used to offset other forms of income.

Income Tax Considerations

If your copy trading activities are frequent, substantial, and conducted with a business-like approach, the Australian Taxation Office (ATO) may consider you a trader. In this case, profits are treated as ordinary income and taxed at your marginal tax rate. Losses and costs incurred are deductible expenses in the year they're incurred. 

The classification between investor and trader depends on various factors, including the volume and frequency of transactions, the intention to earn a profit, and the level of organization and business-like behavior.

Cryptocurrency Taxation

The ATO treats cryptocurrencies as property. Therefore, gains from trading cryptocurrencies via copy trading platforms are subject to capital gains tax.

• Short-Term Gains: Crypto assets held for less than 12 months are taxed at your marginal income tax rate.
• Long-Term Gains: Assets held for 12 months or more may be eligible for a 50% CGT discount.

Additionally, certain crypto-related activities, such as receiving coins from airdrops, staking, or mining, are considered income and taxed accordingly.

Reporting Requirements

All gains and losses from copy trading must be reported on your annual tax return:

• Capital Gains and Losses: Reported on your income tax return, including details of each CGT event.
• Ordinary Income: If applicable, reported as business income.

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.