When beginning on the forex Australia market it is important to have a strategy that is both effective and suited to your personality.  Many new traders are unable to maintain a single strategy as they believe multiple strategies are better and are unable to find one to suit their temperament.  Some of these traders have found mimicking experienced and reputable traders a successful form of trading.  This is known as a mirror strategy and can result in more profits than losses.  While beneficial this strategy does have drawbacks.  It is important to understand all aspects of the mirror strategy before using it on the forex Australia market.

Using a mirror strategy on the forex Australia market

In order to be a successful mirror strategist you must understand the intricacies of the strategy.  When utilising a mirror strategy you will be required to look at all other forex trading strategies.  This is necessary as you must choose the ones you would like to trade with.  While the function of the mirror strategy is to copy the trades of a more experienced trader, it also operates as a form of automated trading.  It is important to be aware of this as you will be required to set certain criteria for the trades executed.

Benefits of the mirror trading strategy

The majority of forex traders agree that mirror trading is more transparent than automated.  It is vital you understand what the benefits of this system are before choosing to utilise it.  The benefits are listed below.

• The option of multiple trading strategies allows you to choose one that is linked to your trading objectives.  By finding a trader who has the same goals you will be able to mirror their strategy, goals and potential trading results.
• There is no chance of emotion trading when using the mirror strategy.  When following a trade you are not responsible for its closing, thus will not experience any emotional reactions.
• You can obtain live results through this strategy.  Some trading platforms allow you to use a mirror trading strategy via mirror trading systems.  These platforms will provide you with real-time results of your forex trades.
• Both automated and manual trades can be executed.  Many automated trading systems do not allow the trade to conduct manual trades alongside automated trades.  However, the mirror strategy allows you to complete both these types of trades simultaneously leading to greater profits.

Drawbacks of the mirror trading strategy

While the mirror trading strategy can be incredibly beneficial and convenient, it does have drawbacks.  It is important that you are aware of these drawbacks in order to make an informed decision when choosing strategies.  The drawbacks are listed below.

• You will be able to copy the chosen traders behaviour until you stop the mirror trading.  Once you have made this decision you can only follow their trading by watching them on the market.
• The results you receive from mirror trading are linked to the initial trader thus success in trading will be based on his/her trade outcome.  If they fall prey to emotional trading you will also suffer losses.