The mirror trading method allows traders in financial markets to select a trading strategy and to automatically “mirror” the trades executed by the selected strategies in the trader’s brokerage account.
Traders can select strategies that match their personal trading preferences, such as risk tolerance and past profits. Once a strategy has been selected, all the signals sent by the strategy will be automatically applied to the client’s brokerage account. No intervention is required by the client as all the account activity is controlled by the platform.
Clients may trade one or more strategies concurrently. This enables the trader to diversify their risk while maintaining trading control of their account.
Mirror trading is sometimes also referred to as copy trading although copy trading differs slightly from mirror trading in the way that accounts are linked.
Mirror trading is an evolution of automated trading, also known as algorithmic trading. Automated trading in general has witnessed exponential growth over the last few years. This development has been widely accepted by clients at the retail level as it helps overcome the traditional barriers to successful trading.
The company Tradency has claimed to have been the first to invent the mirroring concept in early 2005. The core idea was to create a trading platform based on their model, in which traders could automate their trading and base their decisions on the actions of track-record proven, expert strategies.
Mirror Trading is a method in forex trading that enables traders to ‘mirror’ strategies developed by other experienced Forex traders.
Mirror trading has certain distinctions from program trading. Mirror trading is a concept that allows traders to copy or track trades from other traders. These other traders can come in the form of system developers, manual traders or financial institutions.
Mirror trading allows traders to click and choose from a vast supply of trading strategies. The trades are delivered and executed automatically with entry and exit points on multiple currency pairs.