Compound Growth
from the
Easy Wealth Partnership
Frequently Asked Questions (FAQs)
How can I tell this is not a scam?
We are aware of the multitude of scams around, and want you to stay clear of them.
Scammers will often ask you for a lot of personal information, through which they may be able to hack into your accounts, or even steal your identity. If anyone asks you for more than a name and an email, be very wary.
Scammers will be very keen to get your credit card details. You should never give these to anyone other than a recognised and regulated organisation that is easy to find and verify, never to someone just emailing you from no known organisation, or one that you can't phone back, and find easily on the web.
Scammers also often ask for substantial fees (or say they are giving you a special offer where the fees have bene reduced) to start trading. There is no need to pay any fees for copy trading, as the trader will make money from a share of the profits generated on your account.
What is Compound Growth?
Compound growth is what happens when the initial growth causes growth in each subsequent period to be greater, because it grows on the earlier increases.
Examples in biology include the growth of bacterial and viruses, where each virus infects a new cell, and creates multiple copies of itself. The next generation of copies each infects a new cell, and creates multiple copies again, and so on.
In business, an investment grows in a compound way when the interest earned in the first period is left in to grow; the interest in period 2 will be on both the original capital, and also the period 1 interest earned, and so on. This causes exponential growth in the account, at a rate determined only by the rate of interest (or growth).
How is Compound Growth relevant to building wealth?
If you make money and save it each year, the growth in savings will be linear and relatively slow. If you can earn interest on your savings, and avoid making any withdrawals, they will experience compound growth, which will have a huge impact after a few years.
If you have an account which is growing fast, like a successful forex account, the compound growth can skyrocket the returns. This means that a small amount of starting capital, even a few hundred dollars, can become millions within a few years. This puts real wealth within the grasp of most people.
What are the risks in trading forex?
Forex trading is based on a volatile set of markets, so performance depends on the ability to trade markets successfully where there may be rapid changes of trend, and wild swings.
The risk and reward are both magnified by the use of leverage, which allows a trader to buy and sell far more currency than their own capital, increasing by hundreds of percent the profit or loss on each trade.
The main risk is that a trade goes against you, in other words you buy a currency hoping that it will gain in value, and instead it loses value rapidly. In this way a lot of money can be lost in minutes, and the losses can be far greater than the capital you intended to put at risk. When this happens, there is a "margin call" and if additional capital is not immediately put into the account, the trade will be closed at a loss, potentially emptying the account.
The risk in forex means that most amateur traders lose some of their money, often all of it. But skilled traders can navigate these difficult situations and still come out in profit most of the time.
What is the best way to reduce the risk?
The best way is to rely on an experienced trader, or a trading bot that encompasses the wisdom and experience of an experienced trader.
They will scan the market for clear trading signals, and trend in situations where it is likely that a trade will be profitable.
They limit the size of each trade to a small percentage of the capital in the account.
In addition, they use their experience to limit losses, closing losing trades when they see the potential losses getting unacceptably large, while allowing profitable trades to run and make significant profits before they are closed.
Is this legal?
This is totally legal. Forex trading is arguably the biggest business in the world. Banks and hedge funds trade daily on the forex markets, and make consistently high profits. However, the rate of profit they make is very variable, and in some years hey make losses.
What is Copy Trading?
Copy trading is done when an experienced trader makes their trading account available to others to copy. If the account is held at the same broker, the trades can be automatically copied into each "follower" account, at a size that reflects the amount of money in the account. The trader might have an account with £50,000 in it, and be making trades with stakes of £500 (or 1%). If you had an account with £500 in it, the copied trades would have stakes of £5.00 (again, 1%). Every time the trader makes a profit, the profit would be copied in your account, and you would make the same proportion of profit. if the trader makes a loss, you would have a corresponding loss.
If the trader you are copying is performing well, you can expect a high win-rate (the percentage of trades that make a profit), often in the 50-90% range. If the average losses they make are equal to the average profits, or smaller, and their win rate is above 50%, the account will grow over time.
Copy trading is the easiest way to gain wealth without effort. The time, effort and expertise of the trader (or their robot) is simply copied into your account, normally in return for a share of the profits they generate on your funds. Profit shares vary from one trader to another, and can be as low as 20% or as high as over 50%. Clearly, a low profit share is more in your favour, especially if the trader is consistently making significant profits.
How fast can my account grow?
The rate of growth will depend on the trader's performance. Some traders consistently make 10% profit per month, others as much as 25% per month, but the consistency varies widely as does the profitability. A lower profit margin with higher consistency is likely to give you higher overall growth, and more predictability for your forward planning.
Some traders who invite copy trading trade very few times a month, trying to pick "sure winners". If they are not so lucky, and some of their trades lose money, their overall results may not be worth having, i.e. they may consistently lose you money.
Others who have a more robust trading strategy will trade every day, often dozens of times a day, and aim to make small wins often, adding up to good overall returns every month.
How can I start Copy Trading?
Find a reliable trader to copy. We recommend www.easywealth.uk which has very strong results, and where you can open an account for as little as $400 (about £300).
The process is fairly simple, about equivalent to applying for a passport or a driving licence. You follow a link to sign up with a broker, prove your identity and address by uploading suitable documents (like your passport, driving licence, or utility bills) and use a debit or credit card to make a deposit. Then you link the account to the trader's master account (which takes a couple of minutes at most) and sit back to see the account grow.
How can I monitor my account?
If you want to watch what is happening in real time, you can download an MT4 app onto your phone, connect it to your account, and watch every trade open and close. It also shows you the balance on your account at any time, which is the sum of your deposits, plus profits made, less any withdrawals.
If there are open trades, which is usually the case during trading hours, many of these will be in loss temporarily, and the losses are taken off the balance to give you the current equity. Normally those losses turn round within a few hours, become profits, and the trade will be closed. At the end of the day most trades are closed, and also at the end of the week, before the markets close for the weekend. So most evenings and weekends, balance and equity will be the same; during the week, the equity is normally less than the balance.
How can I take my profits out?
Your account is in your hands, and in theory you can close any open trades and take out the entire value of the account (less any profit share due to the trader you are copying) at any time. In practice, we encourage you to make withdrawals on the weekend, when there are no open trades. This avoids the possibility of taking money out of the account, and finding that because the open trades are too big for safety (now that there is less money in the account), the broker’s platform closes all open trades, often at a loss.
You can see if there are open trades on your account at any time through the MT4 app, and you can disconnect it from the bot at any time, preferably when there are no open trades. You can also make withdrawals most evenings (UK time) as the bot normally trades from the open of the London markets until the close of the US markets, though occasionally a trade will be left running later than that.
How do you take your profit share?
Radexmarkets has a fully automated system for this. When you make a withdrawal request, they will automatically take from the account both the amount you have requested, and reserve our profit share to pay us at the end of the month. Your money will be sent to you via wire transfer or as a credit to your bank or credit card (you decide how to receive the money), and our share will be paid to us at the end of the month. Let’s assume that your account has $5,000 in it, and has made $1,600 profit since the last month end. You decide to take out $1,200 and make a withdrawal request for $1,200. You would receive $1,200, we would be due $400, so that amount would be reserved for us to be paid at the end of the month. The account would now hold $3,800. Trading would resume, with trade sizes related to that $3,800 amount until the end of the month, when we would be paid our $400 and (if no further profit had been made) the account would stand at $3,400.
If you do not make any withdrawal requests, we will be paid our profit share monthly. Let’s assume the month started with $5,000 in your account. It makes a profit of 27%, or $1,350 and at the end of the month it stands at $6,350. The broker platform will pay us a quarter of the profit, i.e. $337.60, leaving $6,012.50 in the account. Your equity has just increased by $1,012.50 for the month, or just over 20%.
How does a trading bot work?
The bot scans the market for opportunities, using a combination of technical trading indicators. When it finds a trade with a high probability of making profit, it opens a trade with a small part of your account, putting just a small portion of your capital at risk. The trade may move in and out of profit and loss, but normally will reach a satisfactory level of profit where the bot closes it, locking in the profit. In some cases the loss reaches an unacceptable level, and the bot closes the trade at a loss, rather than risking the loss getting bigger.
The trading strategy the bot follows depends on who created it, and their experience in trading. The accumulated experience of many years of trading may be built into the algorithms that run the bot.
Do I need to know all about trading to do copy trading?
No, the bot that trades for you does it all for you on autopilot. Once you find a good trader or bot to copy, all you need to do is open your account, fund it, and sit back watching it make you money. And of course, decide when and how much money to take out to use and enjoy.
Who are you at Compound Growth?
Easy Wealth is a partnership between Brian Helweg-Larsen and Tom Thorpe, and runs both the Compound-Growth.uk website and the EasyWealth.uk website which offers copy trading services. You can see our details in the About tab at the bottom of the main page of this website.
What are the risks?
Trading the forex (Foreign Exchange) markets is inherently a high risk business, in which almost all amateurs and many professionals lose money. It is also where skilled professionals consistently make very high profits. In a poorly traded account, if you have several positions open and the market moves against you, you can be wiped out and lose the whole account (i.e. all your money) in minutes.
On the other hand, if the account is run conservatively, with only one or a few trades open at any time, risking only a very small portion of your capital; and with stop loss measures in place to ensure that no more than a small portion of the capital could be lost at any time; the risk of losing it all becomes almost zero.
What do copy-trade traders get out of this?
They normally take a share of the profits generated on your account, which can be up to (or occasionally above) 50%. If you don’t make a profit, they should take nothing. Check the conditions when signing up for a copy trading account. You should be looking at the frequency of their trading, their success rate, and the percentage success fees they take, when making your decision.