Copy trading is one of the easiest ways to make profits while trading in the financial market. Beginner traders can find succor in this trading style to prevent loss.
Copy trading is nothing different from copying from your brilliant classmate during an exam; you are sure of success if you do it well. Seasoned traders can also be copied to make profits trading crypto.
In this article, we’ll reveal to you the truth about no one will tell you. Before then, let’s see the concept of copy-trading.
What is Copy Trading?
Copy trading is when individuals in the financial markets (crypto, forex, stocks) were able to copy positions opened and managed by other individuals who are more experienced.
In this situation, new traders copy the moves of veteran traders who are also known as ”Signal Providers”. There are several platforms out there that one can join for crypto trading. It is important to make research on whom one is copying in this regard.
Another option in copy trading is the one provided by the automated trading platform. Here, the software is used to place a trade without stress.
How to Begin Copy Trading?
The first step to begin crypto trading is to open an account with a trading platform. This will give you access to spot other traders on such platforms. You can follow traders that have made profits consistently on that trading platform or those who have a consistent pattern of trading.
The next step is to decide the amount you’ll be willing to trade. It is very important to have it at the back of the mind whether trading in the financial market can be profitable or not. It is therefore good to put what one can afford to lose.
One can then begin to trade by simply watching what fellow traders are doing/copying. It is simpler when you copy trade by watching the portfolio selections of other traders. With this, you’ll get used to the art of trading and get to know the pattern that works for you.
The Truth About Copy Trading
Copy trading is simply copying other traders who are more experienced and have made profits in their trades. However, there is more to copy trading. Discussed below are truths about this strategy no one will tell you.
1. Give Traders a Chance to Gradually Make Money
Crypto traders that quickly want to make money can do so while trading on a short-term basis rather than hodl (hold on to dear life). Traders gradually make a profit when they copy positions opened and managed by expert traders.
2. Best Way to Trade as a Beginner
Copy trading is the best way to get used to trading in the financial market and still make some profits. It is not enough to learn about trading on paper or using a demo account. Following other traders who know more will integrate a beginner into the system via copy trading.
3. Helps to Network with Expert Traders
Most of the trading platforms around make it easy for traders to connect. This will help beginners network with expert traders on such platforms. It is therefore important to choose the right platform before trading.
4. There are Illegitimate Traders
As traders can go wrong when they don’t choose the right platform, they can also go wrong when they copy from illegitimate traders. There are works to do when copying from other traders. This is because there are people who act as expert traders whereas they are not. They use social media to put fake lifestyles to scam others so you need to be cautious when looking for a trader to copy from.
5. Using Automated Software Can Make You Lose Money
As it is important to find out the right platform for copy trading, so it is for copy trading software. There are precautions you should follow when using the software. Top of this is that you should monitor your losses and remove yourself before all your money is gone.
6. There are Rewards for Expert Traders
Expert traders who have their trades copied by fellow traders always benefit from copy trading. Signal providers are often compensated by flat monthly subscription fees on the part of a trader seeking to copy their trades. Popular investors may also earn up to 100% spread rebate on their transactions.
Copy trading is one of the less risky ways to make money in the financial market. Copying the positions of those who know how to read signals can be profitable for other traders.
Copy trading is not entirely risk-free despite its benefit which is a truth no one will tell you going into it. If you must put your money into activities like this, make sure you only put what you can afford to lose.