Copy trading means copying someone else's trades, usually in CFDs. Before you deposit money with any platform, read about the risks involved.
1. CFDs and leverage
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. According to ESMA, between 74% and 89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Leverage works both ways. At 1:100 leverage, a 1% price move changes the value of the margin used by 100%. In the EU and the UK, leverage for retail clients is capped (for example 1:30 on major currency pairs) and brokers must provide negative balance protection. Platforms outside the EU and UK often offer much higher leverage and none of these safeguards.
2. Copy trading risks
- You copy the provider's losses as well as their gains. Copy trading does not remove market or leverage risk.
- Past performance is not a reliable indicator of future results. A provider's maximum drawdown in the past does not limit future losses.
- Your result can differ from the provider's because of position sizing, delays, slippage, spreads, commissions and overnight fees.
- Results shown in platform dashboards, screenshots and ads may be incomplete or selected to look better. They cannot be independently verified.
- Only invest money you can afford to lose.
3. Check the platform before you deposit
Only firms authorised by a financial regulator may offer investment services to retail clients in the EU and the UK. Companies registered only offshore do not have that right, and if something goes wrong you have no regulator to turn to and no compensation scheme.
- Look the firm up in your regulator's register, for example the ESMA registers, the FCA register in the UK or the KNF register in Poland. What matters is the full company name and licence number, not the brand name.
- Check that it is not on regulators' warning lists, for example the IOSCO I-SCAN database.
- Be wary of promises of steady high returns, time pressure (“last places”), requests to install remote desktop software and transfers to private accounts.
4. What Akademia does
Akademia Copy Trading provides education. It is not an investment firm, does not give investment advice, does not receive or transmit orders and does not manage clients' money. Content on the site, in the WhatsApp group and in consultations is not an investment recommendation or an encouragement to invest. Example providers and figures in the calculator are there only to help you learn to measure risk and are not an encouragement to choose any particular provider or platform.