Copy trading has become a popular feature nowadays, with more and more people becoming fans of the whole process. However, popularity comes with various questions – something that even the most avid traders may have.
So, what is copy trading – and why should you try it? What are the best strategies? Learn everything you need to know by reading this article.
What Is Copy Trading?
Copy trading, often referred to as social or mirror trading, is a way for traders to automate their trading by copying the trades of other people. Most of the time, copy trading is used by beginners in the world of trading, as they might still not know how to seal a successful trade. In that case, all they have to do is to find a successful trader and start copytrade his/her trading signals. Once they gained enough insight and skill to make their own trades, they will no longer have to get inspiration from other people. They may learn by sitting back and watching the action.
It is also a good option for those that lack the time to do the trading experience themselves. Since this type of trading is automated, you will be able to take part in the market, without taking from your busy time.
How to Copy Trade Like a Boss
Copy trading is not actually that difficult. There are, in fact, three steps that you will have to learn – steps that even the most inexperienced trader can handle:
- Choose a reliable broker to work with. Stick to the regulated ones, and make sure that you do as much research as possible. A good broker will not only be able to offer you a greater selection of assets, but they will also be able to help you out with a well-set customer support line.
- There are quite a bit of automated platforms that you may go for – in most cases given or suggested to you by your broker. The most popular are DupliTrade or ZuluTrade, but it will also depend on the broker that you are collaborating with.
- Once you have an active account, you must look at a list of potential signal providers – analyzing their stats carefully. In most cases, you should be able to see their P&L, along with their risk profile. Go for the signal that seems to suit your objective the most.
Copy trading is used by novices and experts alike, as it can not only give the trader a boost, but it may also increase their profitability with barely any effort. You would practically be using the investor’s ability to mirror your success.
Copy trading has been growing for the past years, and it is certainly a good solution for when you need some help in your trading. The better the signal you get, the more successful you may be. Plus, it provides a great learning opportunity for novices.