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Mirror trading: What exactly is it?

Online trading has become popular in recent years, but not everyone who wants to practice it has enough time or training. Thanks to technological advances, there are new options to handle these inconveniences. How? With new forms of automated trading, such as copy trading, social trading and mirror trading. In this article I’m going to explain what the latter entails. Are you interested? Keep reading!To get more news about forex mirror trading, you can visit wikifx.com official website.

What is mirror trading?
Whether you are interested in mirror forex trading, or any other market, mirror trading is a strategy that can be applied to most markets. Mirror trading is a type of automated trading that emerged in 2000, even before the other variants, such as copy trading and social trading. Its name gives us a clear clue of what mirror trading means, since it consists of replicating or reflecting the strategy of a certain trader.

In this case, this strategy is hosted on the server of the company that offers the trading services - the broker - which, in turn, makes it available to its clients through its platform.

The trader who wants to replicate strategies of other market participants is able to see all the characteristics and the results of each one of them in the trading platform of his broker. Then they select one of them based on their profit goals, trading style, capital, risk tolerance level, etc.

Each one of the operations is copied automatically and configured in the account of the trader that replicates the strategy.

Advantages vs disadvantages of mirror trading
Before covering the advantages and disadvantages of mirror trading, I must present a clear warning: be careful, because absolutely everything in the strategy is replicated. That’s why it’s highly recommended that, before choosing this strategy, we dedicate time to researching the following:
Mirror trading vs Copy trading vs Social trading
The basis of mirror trading, copy trading and social trading is, broadly speaking, the same: a trader copies the strategies and techniques of another trader. However, these three variants have their differences when it comes to putting them into practice. Let's see them:

Mirror trading
In this case, the ‘original’ trader programs and directly hosts his strategy on the server of the company that provides this service for the rest of traders to replicate. The trader who facilitates the strategy must have programming knowledge so that he can send the signals that will later be replicated in the client's trading account.

Copy trading
When we talk about copy traders, we refer to the technique by which a trader connects their account to the system of the company that offers this service, becoming a signal provider. Like mirror trading, this strategy can apply to Forex copy trading or any other market.

Unlike mirror trading, in this case it does not program its strategy on the company's server but instead hosts it on its own server and, from there, sends it to the trading platform for the broker to forward it to its clients. A client can then become a copy trader based on this strategy.

Social trading
Social trading is a kind of user community that works in the same way as a social network, but around a topic as specific as trading. In this case, we can talk about two types of actors that participate in this network: signal providers or professionals who share their operations; their followers, who seek advice, exchange opinions and investigate winning strategies.
Market sentiment - an alternative to mirror trading?
Admirals does not provide portfolio management or mirror trading services but is preparing a new copy trading service that is expected to be available in February 2021. Until then, it’s offering an alternative, thanks to its MetaTrader trading platform.

Admirals has the exclusive Supreme Edition plugin for MetaTrader 4 and Metatrader 5 that adds to these platforms, among other indicators, the Market Sentiment. You can consider this as something similar to an mt4 mirror trading function.
This indicator can help the trader know the majority positions of investors at a given time. What it does is measure the emotional state of market players and identifies whether the majority are long or short - that is, whether optimism or pessimism is dominating.