What Is Copy Trading and Should You Do It?

The array of parameters one eventually chooses depends on their own preferences. Amateur cryptocurrency investors need to carefully determine what is important to them for making a decision regarding crypto trading strategy. Are they left to fend for themselves, speculating about the prices and taking to stride the sharp ups and downs of the cryptocurrency industry?

• In addition to spot trading and derivatives, the global platform offers bridges, cloud services, mining, loans, and copy trading.
• This steep learning curve and the option for automation make the process of following and replicating traders easier and more convenient, which naturally makes it more appealing.
• In other words, it’s trading in financial markets with other people around the globe doing the trading for you.
• When investing in the financial markets using a regulated-broker and legalizes your account and the traders carried within them.
• You should be ready for ups and downs and have a plan to manage your risk.

You also give up control over your trading decisions, though some platforms allow you to set your own risk parameters and even choose which trades to execute. Copy trading is a form of automated trading that allows investors to replicate the trades of another trader in real-time. It’s a type of social trading where investors can follow and copy the trades of more experienced traders. Copy trading enables novice investors to enter the financial markets and make profitable trades by following experienced traders.

Risks of Crypto Social Trading Explained

Once you’ve found a trader you want to copy, you can connect your account to their account and start copying their trades. EToro is one of the best copy trading platforms, and it offers a wide range of assets (Forex, crypto, commodities, stocks, ETFs, and indices). The platform is based in Tel Aviv, and it was launched in 2007 by Ronen Assia (current CEO), David Ring, and Yoni Assia.

• Depending on your level of investment, though, these fees can quickly eat away at your bottom line, turning profits into losses if you’re not careful.
• Answering these questions will help guide your decision-making process when selecting traders to copy.
• You’re leaving the hard work of choosing investments up to someone else.
• Before deciding to follow a trader, carefully review their performance history.

With the Covesting social trading feature, you can choose among the best performing strategies and automatically copy their trading activity to get the same returns. And if you are an experienced trader, you can earn up to 20% of all profits earned by your followers. For instance, imagine a novice investor who is interested in investing in Bitcoin but lacks an understanding of technical analysis or market trends. Through copy trading, they can simply find a top-performing trader specializing in Bitcoin and automatically replicate their trades. This way, they can benefit from the trader’s knowledge and insights without having to make complex trading decisions themselves.

Incentives for Helping People Learn How to Copy Trade Crypto

For example, Pionex is one the best low fees copy trading platforms. Yes, copying cryptocurrency trades is legal in most countries where cryptocurrency is allowed. But different countries may have different rules and requirements for crypto copy trading platforms and users. Based on our research, we recommend using Bybit and eToro social trading platforms.

• This can sometimes work, but remember that we are all fallible, and even the best traders can do a poor job of reading the room.
• Scrutinize the performance history of traders you are interested in copying, analyzing factors such as their trading strategies, risk management techniques, and overall track record.
• This approach allows novice investors to capitalize on the expertise of seasoned traders by automatically replicating their trades in real-time.
• This freedom from constant monitoring allows them to focus on other aspects of their lives while still being actively involved in the cryptocurrency market.
• Of course, if shorting and dealing with futures is your cup of tea, then, by all means, follow a trader who does this.

Trading is risky and letting other people do it for you may do more harm than good. A third major risk category is liquidity risk, the risk that you are unable to close a trade at a reasonable price, because of insufficient buying or selling interest. This happens in markets with little interest, or outside of regular trading hours. This risk is often forgotten about when talking about copy trading risks but is still one to keep in the back of your head. Systematic risk is a risk you cannot really protect yourself against; this risk is present in any market. The outbreak of the coronavirus, or the terrorist attacks of Sept. 11, 2001, are good examples of these events, which caused large losses for many traders.

ommas: Best copy trading platform with trading bots

It is advisable to conduct thorough research on the best available options in the market. For this, you must check out its tools, leverage ratio, educational content, supported cryptocurrencies, and fees. Choose your favorite, seasoned trader/s and software, and then customize its settings. After that, the copy trading software will be ready to make crypto trades on your behalf. That’s why you need a dependable and user-friendly copy trading platform that gives you a wide range of traders, instruments, and tools to help you succeed in your copy trading journey. Look for features like trailing stop-loss orders, which automatically change the stop-loss level as the trade goes in your favor.

• You must choose platforms that have transparent and competitive pricing, including reasonable transaction fees and withdrawal charges.
• This makes many people favour mirror trading over copy trading, as all human error is removed from the equation.
• Coinmatics allows you to choose whether you want to copy automatically, or manually.
• Even the best of traders will have their own knowledge gaps and mistakes.
• This allows you to automatically copy traders and replicate their financial trades.

Overall PrimeXBT Covesting platform is one of the top social trading platforms out there, and something you as a beginner might like to start with. Covesting is a social trading platform that is not directly integrated with PrimeXBT which is another upcoming exchange. This union helps you to enjoy the power of social trading directly inside the PrimeXBT exchange. PrimeXBT also offers a trading terminal as well, that you can use to make trades other than social trades. You can spectate top traders’ trades and copy their trades automatically.

Are all the top cryptocurrency exchanges based in the United States?

But generally, it involves choosing an experienced trader and following their decisions. The above-discussed apps and software are top among all copy trading platforms available in the crypto market. That’s why you should compare different platforms and brokers before you choose one to copy trade with.

• You can also do other things like spot trading, futures trading, options trading, and more.
• Trade directly on Trality without having to connect your exchange’s API key.
• The copy trading feature was added in 2010, and it established itself as the world’s leading social trading network.
• Copy trading is one of the simplest ways to benefit from another trader’s expertise.

AvaTrade is one of the best forex copy trading platform based in Ireland and regulated in Europe by the Central Bank of Ireland. They are one of only a few number top forex brokers to offer fixed spread forex trading. Avatrade provides an extensive range of copy trading and social platforms for you to choose from.

Best Copy Trading Platforms in 2023

Instead, they can rely on the knowledge of other traders to make sound decisions. Well, in most cases it is legal the same as to hold and trade crypto – assets. Our software allows you to monitor and copy trades of your preferred trader, all the execution is performed by your exchange (like Binance).

• But in many ways, the risks are mitigated when copy trading by simply following well-regarded individuals.
• When looking for a trader, choosing one in the age of social media is challenging.
• The copy trader program has a low entry barrier, as you only need to make your first deposit.

Regular monitoring of lead traders’ actions backed by behind-the-scenes learning may help amateur traders to hone their cryptocurrency investing skills and evolve as expert traders themselves. There are so many crypto copy trading platforms that picking the right one could be quite demanding for an amateur trader having little knowledge about the domain. A trader failing to make a well thought out decision might result in them losing hundreds or thousands of dollars. Seasoned copy traders would compare the features of various platforms and go through their reviews before arriving at a decision.

What Users Think of Coinmatics?

When it comes to copy trading crypto, selecting a suitable copy trading broker is an essential first step. You want to find a platform that offers reliable and secure services, while also meeting your specific needs as an investor. There are several factors to consider when choosing a copy trading broker.

For example, it is entirely possible to copy trade on Binance, Kraken, and KuCoin. This is because each of these exchanges have a trading API (or application programming interface) that allows you to write code that lets you follow other traders. However, don’t worry if you are not a programmer, because services exist which let you harness these APIs yourself without ever writing a line of code. It is understandable to hear about how to copy trade crypto and assume that it is an easy task, especially when it comes to using automated services in the crypto space. In some ways, this is true– it is simple to follow the trades of another as it relinquishes you of some of the decision-making processes.

Best Crypto Trading Bots in 2023 (Compared) – Top Options

On these platforms, seasoned traders suggest which crypto assets they should buy or sell. However, the process is manual and there are chances of the traders – failing to implement it without mistakes, thus diminishing the probability of success. Copy trading is a great way to create a cryptocurrency portfolio.

• Observing the progress will also enable you to understand how to backtest the crypto trading strategies.
• You can also monitor the results copy trades are generating for you.
• Wasay has a passion for writing as it allows him to express his creativity, share his knowledge, and connect with people worldwide.
• But if you perform copy trading with good knowledge and proper research, you can definitely make some money.
• However, it is not necessarily a bad thing, as sometimes, too much data can cloud judgment and lead to a false sense of security.

Each investor should carefully research the offerings of the available platforms, as some may offer support for other cryptos. Furthermore, each platform has slightly different terms and conditions, such as fees, spreads, and worldwide availability. Furthermore, you can start this type of trading without having prior experience. You simply need to follow a professional investor on a platform. You can close this investment and stop copying their traders at any time.

Risks and Rewards of Copy Trading in Crypto Market

On one hand, the rewards of copy trading lie in its potential for generating substantial profits. By following successful traders who have consistently achieved positive results, there is a possibility of earning significant returns on investment. Additionally, for individuals new to cryptocurrency, it offers an opportunity to learn from experienced traders and gain valuable insights into market trends and strategies.

Copy trading is a special type of trading activity that involves copying trades from other traders. However, social trading is time-intensive and will still require you to take your own trades. Instead of automatic trade execution, social trading is meant to improve your trading skills and help you become a better trader of your own. For example, the news of interest rate hikes has caused volatility in crypto markets before, which could cause your position to get stopped out. Copying a trader that takes these factors into account will help you survive during times of uncertainty.