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What is copy trading?
Copy trading is a service that automatically repeats another trader's trades in your own account, usually in proportion to the money you allocate. You pick a trader to follow, often from a leaderboard, and their buys and sells are copied without you approving each one.
What it means for you
You take the full loss of the trader you copy, plus fees, and you may not see their trades until they have happened. Leaderboard returns can be short-lived, selective or boosted by leverage, and the copied trader may be paid by the platform for attracting followers. Check how long the track record is and what the trader earns from you.
How it works
In the EU, ESMA describes copy trading as letting investors trade by automatically copying another investor's trades; the trader being copied is the signal provider. Trading is usually automated but can be partly manual. Where a firm executes the signals with no client action on each trade, ESMA treats the service as portfolio management needing authorisation. Copied traders may receive benefits or pay from the firm, which can count as inducements, and past performance shown must be fair and generally cover the preceding five years.
Source: ESMA Supervisory Briefing on Copy Trading (2023) · checked 4 October 2026
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Educational content, not financial advice. Written by hand and checked against the source named above. Something wrong? Tell us and we reply within two business days.