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Copy Tip of the Week: Inversed Trading

Posted by Fullerton Markets on June 5, 2020 at 5:17 PM


There are losers and winners in the Forex market. Some of us might be wondering, while it’s possible to replicate successes of the winners through copy trading, is it possible to avoid what the losing traders have been doing? How can I stay profitable and do the opposite of what the losing traders are doing?

Well, the answer lies in this CopyPip feature – Inversed Trading!

The simple logic behind this feature is to reverse the position of the Strategy Provider (SP).  If you turn this feature on when following an SP, when he/she enters a “Buy” trade, your Strategy Follower (SF) account will copy, but with a “Sell” trade and vice versa.

For example, if an SP buys EURUSD at 1.12623, your SF account will follow this trade by doing the exact opposite, which is to sell EURUSD at 1.12623.

How do you enable the Inversed Trading feature?

When adding an SP to your portfolio, scroll down the screen and right before the "Save" button, you will see a tick box for Inversed Trading. Simply tick the box to enable the feature.

The next question that comes to mind might be, how do you find SPs that you can use this Inversed Trading feature?

The answer is pretty straightforward: Find SPs who have been losing in a prolonged period.

Some of you might be thinking, “I should be able to make profits by using the Inversed Trading feature. All I need to do is to search for SPs with low profitability.”

Is it really that simple? Of course not. Let us explain:

  1. Remember to factor in the commission. For example, if the SP loses 5 pips on a trade and you inverse trade, your profit would be 4.3pips (5pips minus 0.7pip commission).

  2. It may not be easy to find active yet consistently losing SPs. No SPs come into the market with the intention to lose.

  3. Be careful of SPs who are taking many small losses and a few big wins, because reversing their trades would mean many small wins and a few big losses.

There is no Holy Grail in trading and copy trading is no exception. Inversed Trading is an extra feature for you to take advantage of under certain circumstances and it is definitely not the conventional way to profit from our CopyPip platform.

 

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Fullerton Markets Research Team

Your Committed Trading Partner