{"version":"1.0","provider_name":"For overseas forex cashback services, try Money Charger","provider_url":"https://money-charger.com/en/","author_name":"admin","author_url":"https://money-charger.com/en/author/admin/","title":"What is FX copy trading? Investigating its illegality and potential for fraud - Money Charger (Overseas FX Cashback Service)","type":"rich","width":600,"height":338,"html":"<blockquote class=\"wp-embedded-content\" data-secret=\"DuRd9VNij6\"><a href=\"https://money-charger.com/en/information/fx-copytrade/\">What is FX copy trading? An investigation into its legality and potential for fraud</a></blockquote><iframe sandbox=\"allow-scripts\" security=\"restricted\" src=\"https://money-charger.com/en/information/fx-copytrade/embed/#?secret=DuRd9VNij6\" width=\"600\" height=\"338\" title=\"&amp;quot;What is FX copy trading? Investigating its illegality and potential for fraud&amp;quot; &#x2014; Money Charger, an overseas FX cashback service\" data-secret=\"DuRd9VNij6\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\" class=\"wp-embedded-content\"></iframe><script type=\"text/javascript\">\n/* <![CDATA[ */\n/*! 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It is an FX service that aims to lead you to success by copying the discretionary trades of professional traders. You may have many questions about FX copy trading, such as \"How is copy trading different from automated trading?\", \"I heard that copy trading is illegal?\", and \"What are the advantages and disadvantages of copy trading?\". There are also voices saying that copying discretionary trades is illegal and rumors of fraud, so it's important to check these things. This time, we will explain the features and mechanisms of FX copy trading. We have also thoroughly investigated its legality and the possibility of fraud. After reading this article, you should be able to start copy trading with peace of mind. Please use it as a reference. If you are new to overseas FX, we recommend that you read the Complete Guide to Overseas FX for Beginners. What is FX Copy Trading? Explanation of Cases Where It Is Illegal FX copy trading refers to a method of trading that links the discretionary trades of advanced traders and professionals to the user's trading screen. Copy trading is one of the services of overseas FX brokers, also known as \"copy trading\". Even without trading skills or experience, you can copy professional FX trades, but you must be extremely careful as this may involve illegal activities or fraud in some cases. We will explain the cases that are illegal and the points to be careful about here. First, let's look at the features and mechanism of FX copy trading (copy trading). Features and Mechanism of FX Copy Trading The feature of copy trading is that it allows you to copy real-time discretionary trades directly, rather than programmed trading strategies. The mechanism for copying discretionary trades is that it links the trading screen of a high-performing trader (provider) with the trading screen of the user (follower) who copies it. Image of Copy Trading By opening an overseas FX copy trading account, the trades of a professional trader (provider) are directly reflected in the user's (follower's) trading account. Every time the provider makes a discretionary trade, the exact same trade is automatically duplicated in the follower's copy trading account. To put it simply, it's like the provider is trading on the follower's trading screen. Funds, trading volume, and leverage are set by the follower Providers usually trade with larger funds and currency volumes (lots). Each follower can freely set how much capital and currency volume (lots) they will use. Even if the provider is trading 10 lots with 1 million yen, a follower can copy trade according to their own trading plan, such as 0.1 lots with 30,000 yen. Leverage settings are also at the follower's discretion. Because followers can set their own capital, currency volume, and leverage, they can easily engage in copy trading with small amounts of capital. Fees vary depending on the provider. Copy trading fees are deducted from profits at a certain percentage as a commission on the rewards. The percentage of the commission varies from provider to provider. Roughly speaking, commissions are set between 0% and 50%. For example, XM Trading has an average commission of 10% to 30%, and HF Market has an average commission of 20% to 35%. Some copy trading services are free, while others charge as much as 50%. However, free services and those with excessively high fees do not have a good reputation. While traders with higher trading skills tend to have slightly higher fees, if the fees are too high, the share of the profits will also decrease, so around 20% to 30% is ideal. No fees are charged for losses (commission fees). Copy trading fees are only for the commission. There are no fees for losses. You won't have fees deducted even if you don't make money from trading. Your balance will decrease with losses, so it's not 100% safe, but you don't have to pay fees for losing trades. Is FX copy trading illegal in Japan? Another characteristic of copy trading is that it is basically offered by overseas FX brokers. Some foreign companies have introduced it in Japan, but the providers are generally overseas companies. This is because in Japan, if someone other than the principal (an agent) manages assets, they are required to be licensed and registered under the Financial Instruments and Exchange Act. Someone trading on behalf of the principal, rather than using an automated trading program, is legally considered \"asset management agency business\" and requires qualifications. Providing \"investment advisory and agency services\" without a license is a violation of the law for domestic financial institutions or individuals. Incidentally, \"mirror trading\" offered by domestic FX brokers is a strategy that allows you to copy the FX trades of other traders. Domestic FX brokers are licensed by the Financial Services Agency. It is not illegal if it is provided by a broker registered as an \"investment advisory and agency service\". Is FX copy trading not illegal with overseas FX? The Japanese Financial Instruments and Exchange Act applies to financial institutions with a base in Japan. It is not possible to regulate overseas companies without a base in Japan under Japanese law. Therefore, copy trading by overseas FX brokers is outside the scope of the law, and using it of one's own free will is not a violation. However, it is a violation for overseas FX brokers to conduct business activities for FX services in Japan, including copy trading. The illegality of overseas FX is explained in more detail in \"Why is overseas FX not recommended?\". Please check that as well. Profits from FX copy trading require tax filing One more thing to add is that even with overseas FX copy trading, if the profits exceed a certain amount, tax filing is required. Taxes on overseas forex trading are classified as \"miscellaneous income subject to comprehensive taxation.\" If your profit after deducting necessary expenses exceeds 200,000 yen, you are obligated to file a tax return and pay taxes. Unlike domestic forex trading, which has a tax rate of 20.315%, overseas forex trading uses a progressive tax system where the tax rate changes according to your total income. The progressive tax rate applicable to overseas forex trading ranges from 5% to a maximum of 45% (approximately 55% including local taxes). Failing to declare earnings from copy trading is illegal. If you make a profit of 200,000 yen or more, there's a chance you might get caught, so be sure to file a tax return and pay your taxes. For more information on the differences between overseas and domestic forex taxation, please refer to this article: Is it true that copy trading tools are scams? […]"}