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 replicate 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 offers several advantages, including:

• Accessibility: It allows beginners to invest in the financial markets without needing advanced trading knowledge.
• Time-saving: Investors do not need to analyse the markets themselves or make complex decisions.
• Diversification: It is possible to copy several traders and thus spread the risks.
• Progressive learning: By following the strategies of experienced traders, investors can understand the mechanisms of the market 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 wish 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 reproduced 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 significant 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 wish to execute.

What social trading solutions are offered by brokers in New Zealand?

In New Zealand, 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 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 to maximise your chances of success while limiting risk. Several criteria must be taken into account to select the platform best suited to your needs and investor profile.

1. Regulation and security

When selecting a copy trading platform in New Zealand, it's essential to ensure the platform is regulated by the Financial Markets Authority (FMA). The FMA oversees financial markets in New Zealand, ensuring transparency, integrity, and investor protection.

While copy trading is not explicitly regulated in New Zealand, platforms offering such services must still comply with existing financial regulations. For instance, BlackBull Markets is currently the only FMA-regulated broker offering genuine copy trading services in the country. 

Key aspects to consider for security include:

• Segregated Client Funds: FMA-regulated brokers are required to keep client funds separate from their operational funds, ensuring protection in case of the broker's insolvency.
• Dispute Resolution Schemes: Licensed brokers must be members of approved dispute resolution schemes, providing a channel for resolving any issues that may arise.
• Transparent Operations: Regulated platforms must provide clear information about fees, risks, and trading practices.

2. Traders Available to Copy

The diversity and quality of the traders offered are key elements. It is advisable to choose a platform offering filtering tools to analyse 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 to choose traders to copy.

3. Accessible assets and markets

New Zealand traders have access to a diverse range of financial instruments through reputable 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 NZD/USD, AUD/USD, and EUR/USD are popular among New Zealand traders. Platforms such as BlackBull Markets offer access to over 70 currency pairs, including majors, minors, and exotics.
• Stocks: Traders can invest in both domestic and international equities. The S&P/NZX 50 Index includes leading New Zealand companies like Fisher & Paykel Healthcare, Spark New Zealand, and Auckland International Airport.
• 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: Given New Zealand's economy, commodities like dairy products are significant. While the NZX hosts dairy product trading, platforms also offer access to global commodities like gold, crude oil, and natural gas.
• Cryptocurrencies: Digital currencies such as Bitcoin, Ethereum, and Ripple are increasingly popular. However, it's crucial to note that cryptocurrency trading is not regulated by the FMA, and traders should exercise caution and conduct thorough research before investing.

4. Fees and commissions

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

• Spread : 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 trade for a certain period
• Profit sharing : some platforms charge a percentage of 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 account: Test the platform with a dummy account before investing real money
• Risk management tools: stop-loss, take-profit, adjustment of invested capital
• Advanced charts and tables: real-time analysis of the performance of copied traders
• Mobile app: access investments on the go

6. Platform Reviews and Reputation

Consulting user reviews and ratings on specialized sites like Trustpilot or trading forums provides an overview of the advantages and disadvantages of each platform. Prioritize 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:

• The contact channels (online chat, email, phone)
• Availability (24/7, opening hours)
• The language of support (English)

What assets can be traded with copy trading?

Copy trading allows you to invest in a wide range of financial assets, depending on the markets offered by the chosen platform. 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 offering this feature and regulated by a recognized financial authority (such as the Financial Markets Authority in New Zealand). Among the most popular platforms are eToro, ZuluTrade, MetaTrader 4/5 (with signals), DupliTrade and Myfxbook AutoTrade.

Criteria to verify 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 for depositing funds

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

3. Deposit funds into your trading account

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

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

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

4. Select a trader to copy

Choosing the trader to copy is a key step for success in copy trading. Platforms provide various criteria for analysing 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 sum to be used to copy the trader
• Automatic stop-loss: set a maximum loss not to be exceeded
• Adjustment of the copy level: some platforms allow copying trades in proportion to the capital of the followed trader

6. Monitor and adjust 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 for optimising your copy trading:

• Diversify by copying multiple traders to limit risks
• Regularly check performance and adjust investments if needed
• Don't panic in the face of market fluctuations and stay consistent with your strategy
• Train in parallel to better understand how the market works

What are the fees for brokers offering copy trading?

Copy trading platforms apply different types of fees that can affect investor profitability. It is essential to understand these costs before choosing a broker, as they vary depending on the platform and the assets traded. Here is 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 buy (bid) and sell (ask) price of an asset. It is an indirect cost that the broker automatically incorporates into each transaction, which means that the investor must cover this cost before being profitable on a trade. The higher the spread, the higher 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 the moment the position is opened, they are immediately at a slight loss equivalent to these 1.5 pips. If the market does not evolve sufficiently in their favour, the transaction may not be very profitable.

2. Transaction Fees: Percentage or Fixed Amount

Some brokers apply, in addition to the spread, a fee on each transaction made. This fee 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 specialising in shares. For each purchase or sale of a share, a commission of 0.1% is levied.

• If they invest NZD 1,000 in a share, they will pay NZD 1 in fees when opening the position.
• If they close this position later for NZD 1,200, they will pay a commission of NZD 1.20 again.

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

3. Management or performance fees: a share of the gains returned to the broker

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

Example of management or performance fees

A broker applies a performance fee, often around 20%, on the gains generated through copy trading.

• If an investor makes a profit of $500 NZD by copying a trader, they will have to pay $100 NZD to the broker (20% of $500 NZD).
• They will therefore be left with $400 NZD 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 NZD$10 per month after 6 months of no trading activity.

• An investor who has not used their account for 8 months will have to pay NZD$20 in cumulative fees.
• To avoid these fees, they can simply execute 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 winnings

Some brokers charge fees on cash 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 wishes to withdraw 500 NZD from their trading account. The broker applies fixed fees of 5 NZD on each withdrawal.

• In the end, the investor will receive 495 NZD 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 you to automatically copy the strategies of experienced traders. However, although this method facilitates access to financial markets, it is not entirely without risk. 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 better risk distribution and avoids putting 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 drop 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.
• Fees that can reduce profitability: Some brokers apply fees to copy trading (commissions, spread, performance fees, etc.), which can impact the profits of beginner investors.
• The absence of guaranteed results: Even when copying a successful trader, the financial markets remain unpredictable. Past gains never guarantee future performance.

What strategy to use with copy trading?

Copy trading allows you to adopt different strategies depending on your investor profile, risk appetite and financial objectives. Some approaches favour stability and security, while others aim for higher returns by accepting an increased 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 prefer 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 rigorously increases credibility. Good risk management is also crucial: limiting drawdown, avoiding excessive leverage, and not exposing all of one's capital on 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 tax on income from copy trading in New Zealand?

In New Zealand, profits derived from copy trading activities are generally considered taxable income. The specific tax treatment depends on the nature of the trading activity and the assets involved.

Income Tax on Copy Trading Profits

New Zealand does not have a comprehensive capital gains tax. However, profits from trading activities, including copy trading, are typically taxed as income if the transactions are carried out with the intention of making a profit. This applies regardless of whether the assets traded are forex, stocks, or cryptocurrencies.

The income tax rates in New Zealand are progressive, ranging from 10.5% to 39%, depending on your total annual income. It's important to note that if your trading activities are frequent and systematic, they may be considered a business, and the profits would be taxed accordingly. 

Taxation of Cryptocurrency Gains

Profits from copy trading in cryptocurrencies are also subject to income tax. The Inland Revenue Department (IRD) treats cryptocurrencies as property, and any gains from their disposal are taxable. This includes selling crypto for fiat currency, trading one crypto for another, or using crypto to purchase goods or services. 

Income from activities such as mining, staking, or receiving airdrops is also taxable and should be included in your income tax return. Losses from cryptocurrency trading can be used to offset other income, provided they meet certain criteria. 

Reporting and Compliance

All income from copy trading must be reported in your annual tax return. For individuals, this is typically done using the IR3 form. It's essential to keep detailed records of all your trading activities, including dates, amounts, and the nature of each transaction. 

Failure to accurately report income from copy trading can result in penalties and interest charges. The IRD has the authority to investigate and audit taxpayers, and non-compliance can lead to significant consequences.

Professional Traders and Business Entities

If your copy trading activities are substantial and carried out in a business-like manner, you may be considered a professional trader. In such cases, profits are taxed as business income, and you may be eligible to deduct related expenses, such as platform fees, internet costs, and other operational expenses. 

Companies engaged in trading activities are subject to a flat corporate tax rate of 28% on their profits.

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.