HFcopy, the copy-trading system offered by CySEC-regulated, global broker Hot Forex, is a great tool which allows traders to join forces with each other and squeeze profits from the markets.
When registering a HFcopy account one can choose to be a Strategy Provider (SP) – the trader whom others can copy or Follower – a passive investor, who automatically makes the same trades as his provider.
This isn’t a groundbreaking innovation, as similar systems are available for years. However HFcopy account has a few perks to offer:
Performance-based fees
The only fees involved with the HFcopy account are the performance-based ones. This is very fair, when compared to other schemes, which also involve a spread mark-up or a periodic subscription (usually called a “management fee”). Each Strategy Provider choses his rate, which can go as high as 35%. As the name suggests, this percentage is only charged on the net profit generated. More importantly the fee is monthly, which can be seen as better than short term (for example weekly) billing.
Safety net
The HFcopy Follower account offers several form of risk control. The so called “Rescue level” is a percentage of one’s total investment, which is considered the maximum he is willing to let his account drop to. It can be set as high as 40% and in case something goes wrong with the trades made by the SP, the follower will close all of his positions.
Risk management
Additionally, each follower can chose a “Copy ratio”, which further adjusts his market exposure. Most traditional copy trading systems only take the proportional approach – if you have $10,000, following a SP who has a $100,000 account, all of your positions will be 10 times smaller. The HFcopy system allows you to modify this – the previous example will only be true, if you have a 100% Copy ratio and lower, in case you adjust it.
Both parties involved in the Hot Forex copy-trading system can deposit and withdrawal funds at will. This may create some difficulties with the calculations, but is still preferable to having a lock-up period. Furthermore, followers can adjust their “Rescue level” in accordance with their new balance when making transfers.
In the HFcopy network a Follower can only be linked to a single Strategy provider. While this limits the diversification potential, a client can open up to 3 Follower accounts and freely transfer funds between them.
