Digest: Trade Copier Plugins for MetaTrader 4 and 5

Even a simple process like trade copying can be utilized for various tasks and by different actors. For instance, a broker may need such technology to measure exposure and mitigate risks, a portfolio manager may simultaneously run different accounts, and a trader may use it to copy trade signals. With numerous copying technologies available on the market, confusion and questions are inevitable. Let’s answer some questions about well-known trade copying processes.

PAMM vs. copy trading

Both PAMM (Percentage Allocation Management Module) and Copy Trading have become popular ways for investors to participate in forex markets without needing to trade actively themselves. They share similarities but also have fundamental differences, especially regarding control and fee structures.

One of the main distinctions lies in how investors’ funds are managed. In PAMM accounts, investors entrust their capital directly to a professional trader or fund manager who makes all trading decisions on their behalf. The investor does not have the option to intervene or alter trades once they’re placed.

Copy Trading offers more autonomy. Investors connect their accounts to a trader’s and automatically replicate that trader’s moves, but their funds remain under their control. This setup allows investors to stop copying or adjust parameters at any time.

Fee structures also vary. PAMM accounts typically involve a single cost embedded in the spread—the difference between buy and sell prices—that the fund manager covers. Copy Trading platforms, on the other hand, often charge both a spread and a commission for using their service, with commissions often linked to the performance of the traders being copied.

Advantages and disadvantages of PAMM

No need for investors to master trading strategies or market analysis.
Entry to the forex markets with reduced personal time commitment.
Experienced money managers may improve the chances of profitability.
Transparency in manager performance and regulatory oversight adds a layer of security.
Investors have no say over individual trades after allocation.
Higher fees may apply for more skilled managers, but success is not guaranteed.
Risk of loss remains, and fees are owed regardless of performance.
Choosing and trusting the right manager is essential, yet challenging.

Also read: 5 Reasons Why Brokers Should Choose PAMM by Brokeree Solutions.

Advantages and disadvantages of copy trading

Allows investors to benefit from experienced traders’ strategies without manual execution.
Automatic transaction replication reduces the workload on the investor.
Flexibility to select, adjust, or stop following specific traders.
Opportunity to diversify by copying multiple signal providers simultaneously.
Returns depend entirely on the trader(s) followed; past performance offers no guarantee.
Spread and commission costs can be higher than standard trading accounts.
Some brokers charge varying commissions based on trader success, making high-performing strategies more expensive.
Investors still bear all risks associated with the copied trades.

Related: What is Copy Trading: The Basics

What is the difference between signals and automated trade copying?

Trading signals do not necessarily mean that a trade will be automatically copied to the user’s account. A signal may be a simple recommendation to buy or sell a specific asset at a particular price, for example, a group of traders may share MT5 signals on the instant messaging platform Telegram. As alluring as it may seem, investors cannot verify the quality of such analysis without risks, and, in such cases, it is recommended that traders use automated copy trading from licensed brokerages.

Automated trade copying is a passive, more hands-off approach to trading. It automatically replicates the trades of selected traders directly into the follower’s account. Since this process is automated, there are a lot fewer customization options than manual trading or signal following.

Which copy trade software exists for brokers?

One of the common requests of brokers about copying is setting up an investment system, like Social Trading.

Social Trading by Brokeree gives brokers the flexibility to create tailored investment systems where clients can automatically copy trades from experienced signal providers while maintaining full control over their accounts. It features separate portals for administrators, providers, and followers for precise customization of trading conditions across account types, strategies, and deposit sizes.

Integrated with MetaTrader 4, MetaTrader 5, and cTrader, Social trading enables trade copying across different platforms. Its risk management features, such as proportional copying and advanced stop-loss settings, help protect traders, while administrative controls lower operational risks for brokers.

Learn more about Social Trading.

Trade copying can also be utilized in risk management processes. For example, a broker may want to monitor clients’ exposure to specific symbols. They can do that by either aggregating (copying) trades to coverage accounts for further analysis with a Trade Copier plugin, or by automatically hedging clients’ positions to a counterparty with an Exposure Manager or a Terminal Hedger.

Why do portfolio managers need to copy trades?

Portfolio managers usually run multiple accounts for their clients at different brokerages and may need to copy trades from one MT4 to another. At some point, trading on multiple accounts becomes impossible as market conditions may change with time, and the manager has to manually open positions on all managed accounts.

To optimize their routine, they may use technology solutions like expert advisers to automate trading, which may not apply to their trading strategy, as algorithmic trading requires a unique set of skills. If a trader prefers to execute original trades manually, they may look for brokerages that provide MAM or PAMM services.

Сan white labels use copy trading?

There is no difference between white-label and fully licensed brokers when operating investment systems as Social Trading. However, white label brokers usually do not have access to the entire MetaTrader infrastructure, which is why they won’t be able to use some risk management plugins. To overcome this obstacle, brokers may utilize alternative solutions, such as Exposure Manager or Terminal Hedger, to mitigate trading risks.

Can I copy trades from an MT4 account to an MT5 account?

It is possible if you are using solutions like Brokeree’s Social Trading. It allows copy trading across MT4 and MT5 servers as well as copying between cTrader and MetaTrader servers.

Conclusion

This digest might not have answered all questions about trade copier plugins, but it creates a framework for further discussions. Moreover, it demonstrates how diverse copying technology can be when applied to various processes, such as investment systems, risk monitoring, and hedging.