It was in the beginning of February that news broke out about the upcoming launch of the AutoTrade platform by Myfxbook.com, the social forex community and online automated analytical tool. And it was high time for this to happen, since the field of social trading networks was gathering pace and competitors like ZuluTrade and eToro's OpenBook were gaining strength and market share.
copy mirroring platform is finally up and running, and we were eager to explore it.
Opening a demo account on myfxbook.com takes seconds. The good news is that you can be demo as long as you wish, unlike the demo versions of other platforms (take ZuluTrade for example), which expire after a certain period of time.
Once you set up an account, you will see a panel of available systems to subscribe to. In other words, these are the trading systems you can follow. At the moment the list contains six systems but it is set to inflate.
How do you choose the systems to which to subscribe?
For starters, the platform informs you whether the system is manual, automated or mixed. That is, you know whether you will be subscribed to a robot or not. ZuluTrade also has a feature (a special indicator) that allows you to determine whether a signal provider (SP) is an expert advisor or a manual trader. By contrast, eToro's OpenBook allows copying manual trading only.
Another advantage of AutoTrade over rival platforms is that once you select a system, you can check what returns correspond to the level of drawdown. For example, the system of borix 002 shows that all-time drawdown of 20% is accompanied with hypothetical monthly return of 2.1%. This service is very convenient and it is not available on competing social trading networks.
We advise you to explore the profile of the system developer, that is, the detailed statistics of trading. Do not forget to check out the discussions going together with the accounts of system authors!
Who can be an AutoTrade provider?
Fortunately for followers, Myfxbook imposes stringent requirements for trading systems that act as AutoTrade providers. They must have proven track record, which means they must have a real and verified MetaTrader 4
account, the account should be active for a minimum of three months, and the balance must be $1,000 or more.
There are also particular performance requirements: the drawdown should not exceed 50%; the return must be 10% or more; the average pip per trade ratio must be at least 10. A requirement for average trade time of more than 5 minutes discourages scalping as a possible trading strategy.
Another piece of positive news is that the platform does not accept Martingale and grid techniques that can really blow out your account.
By comparison, ZuluTrade allows traders to operate as signal providers even via a demo account and eToro's OpenBook (like AutoTrade) requires a real account, registered with eToro.
With this said, you can see how AutoTrade offers a safe trading environment in terms of tight requirements for SPs.
Are AutoTrade providers making money?
Like Zulutrade and eToro's OpenBook, AutoTrade offers SPs the possibility to make money off their signals. Providers get to earn 0.5 pips per winning trade. The amount a provider receives depends on the number of subscribers, the number of profitable trades and the trade volumes. Imagine there is a provider with 250 subscribers and trade volume of 800 mini lots. The provider makes an average of 100 trades monthly, with a 65% winning rate. This means that this SP will receive 800*0.65*100*0.5=$26,000. Explained simply, this means that SPs are rewarded based on a complex set of factors, including solid performance and subscribers count.
ZuluTrade and OpenBook's also have reward schemes
for traders. eToro's OpenBook gives a SP a fixed amount per certain number of copiers – for example, $100 for 10 to 24 eligible copiers, the amount grows to $1,000 from 101 to 150 copiers, and so on.
In contrast, ZuluTrade gives 0.5 pip per standard traded lot – and that's about $5. However, the SP's monthly loss (in case there is such) must not surpass 700 pips as in such a case, the SP gets nothing.
You know what? I prefer the AutoTrade scheme. Because the OpenBook favors quantity of copiers, ZuluTrade favors the trading activity, while Autotrade is the most comprehensive and balanced one of all.
What happens if you opt for a live account?
For starters, the AutoTrade platform offers a single broker – Alpari UK
, with which you can register a live account. The variety of brokers is set to grow, though. Keep in mind that Myfxbook supports over 100 brokers and platforms, including MT4, MT5, FXCM’s Trading Station and Strategy Trader, as well as Oanda’s fxTrade.
Also, you should know that there will be some fee for using AutoTrade. Sadly, I cannot tell you the exact amount of this charge, because Myfxbook's support team has not replied to my requests for further information – but then again, live accounts on ZuluTrade and the OpenBook are not free either.
eToro does not charge commissions but the spreads are relatively high at 3 pips. When it comes to ZuluTrade, you can choose from 56 supported brokers and the spreads vary widely. Commissions vary from 0.5 pips to 3.5 pips, depending on the broker. The only broker who offers a live account on Zulutrade without any commission is the network's own AAAFX
– I guess this doesn't come as a surprise to you.
They say that there is no free lunch – especially when it comes to forex trading and real money – but we can only hope that this particular lunch won't be too expensive.
(March 6, 2013)
The support team of Myfxbook.com replied to my question concerning the price of having a live account on the platform. "The spread markup will most likely be only 1 pip - this is the only cost for the service".
Myfxbook is a social Forex community and online automated analytical tool for Forex trading accounts. It allows tracking, comparing, analyzing and sharing trading activity with fellow traders. The tool can also be used for improving trading skills and even publishing a trading account statement.