What is Copy Trading?
Before wanting to profit from copy trading, it is essential to know your decision. It is a branch of social trading in which one trader’s positions are copied by another trader’s account when opened or closed. This can be automatic or manual; it is up to each person to decide how they would like to approach copy trading.
Social trading focuses on getting ideas and knowledge from different websites and services to develop new strategies, share tips, and invest in tools. Copy trading focuses more on replicating operations and trying to benefit only from the results.
Copy trading was born from mirror trading in 2005. Initially, traders copied specific algorithms that were developed through automated trading.The developers shared their trading history, allowing others to copy their trading strategies. This scenario formed a social trading network. Eventually, traders began copying trades into their trading accounts, copying another trader instead of a plan.
Copy trading can be helpful for traders who need more time to follow the markets themselves or beginners. Generally, copy trading focuses on short-term trading, mainly day trading and swing trading strategies, but several different strategies are used to generate income.Copy trading tends to focus on assets within the forex market, cryptocurrencies, and other complex or volatile markets.
Benefits of copy trading:
• Earnings without knowledge
You make profits from transactions, regardless of skill level. Professional traders will do everything for you.
• Style Trading: You choose the signal provider whose trading style suits your needs.
• More free time
•You don’t spend much time monitoring the market.
• Multi trading
You choose as many signal providers as you want. In this case, the risks are diversified. In this way, you minimize possible losses and will not lose everything at once. A profitable one can cover a losing deal. The profit is also reduced, but so is the possibility of losing everything.
• Great for beginners
If you want to avoid getting into technical analysis and chart patterns, the most experienced and profitable traders will do all the trading for you.
How do you choose a provider for copy trading?
Copy Trading is like in the market: suppliers show the products with their faces and scores. The higher the rating, the more expensive the subscription is for the signals. New providers often sell signals for free to get a rating; if you don’t have enough money for signals from in-demand providers, you can start using the free ones.The higher the rating, the more expensive the subscription is. Choose a provider wisely:
• The trading history must be extended (not less than 60 days), and there must not be enough offers.
• A large number of subscribers say that the trader is in demand.
• Estimate the trader’s strategy; how many daily operations does he carry out? If he is a scalper, isn’t his strategy too risky?
• The maximum reduction should not exceed 25-30%.
• An average monthly income is 15-30%.
Social Trading vs. Copy Trading
While copy trading is often categorized as a subset of social trading, these two approaches exhibit distinct differences.In copy trading, your account becomes linked with another trader, and their positions are automatically duplicated in your account. Your success is tied to theirs – if they profit, so do you; conversely, losses are shared. This method is notably more passive, as the trader you’re copying does all the work. Frequently, the entire process is automated.
Nevertheless, specific platforms and copy trading applications operate semi-automated, allowing you to choose which trades to replicate. Copy trading is particularly advantageous for novice traders, allowing them to engage in trading beyond their current level of expertise. However, drawbacks include limited learning opportunities and potential losses following unsuccessful traders.
Conversely, social trading adopts a more extensive approach, integrating social media into investing. The primary emphasis is community engagement, allowing traders to interact, share insights, and receive notifications about each other’s trading activities.
Social trading platforms often incorporate features like message boards and chat rooms for trading discussions, customizable social news feeds that keep investors updated on their preferred traders’ activities, and extensive trader statistics. For instance, in apps like AvaSocial, investors access portfolio details, risk scores, personal news feeds, and success/failure ratios.This strategy not only enables learning but also encourages active contribution to the community. It provides investors with a wealth of resources for informed decision-making.
Both social trading and copy trading prove valuable. However, the key lies in choosing a strategy that aligns with your current trading requirements and preferences. AvaTrade presents diverse solutions, including the AvaSocial trading app and copy trading platforms. Selecting the one that aligns most closely with your trading needs is essential for a successful investment journey.
Why Has Copy Trading Become So Popular?
Copy investing, or mirror trading, has become very popular with investors worldwide, mainly because many early adopters have had enormous success and were able to boost their trading skills and profitability with zero effort. Copy trading enables novice investors to do just that. They don’t need to know how to analyze the markets or how to interpret trading signals or indicators.
Novices are using other investors’ abilities and thus increasing their success rates. Also, copy trading can be used by experienced traders as a way of learning new trading strategies from others and, by that, increasing their success in the online trading market.
If you would like to start investing in the stock market but do not have a lot of experience, or you are a seasoned pro who would like to gain insight into the analysis of others, using copy investing/mirror trading could be an excellent place for you to begin.
How to generate profits doing Copy Trading on Margex?
1. Choose a trader
Choosing the right trader for you involves a thorough examination of each trader’s history and all the data available on the Margex copy trading platform. Be sure to consider traders who meet your risk level and profit goals. A good trader worth copying must also demonstrate consistent results and a history of safe trading practices.
2. Click Follow
This is the easy part. Simply click “Follow” and all trades made by the selected trader will be automatically copied using Margex’s innovative copy trading software. Users can also follow multiple traders at once to have a diversified copy trading portfolio that covers all bases.
3. Choose an amount
Followers have to decide how much capital they will allocate to following a trader. Carefully select the amount of funds with which you want to follow the trader, and enter it in the copy trading platform.
4. Confirm and start copying
After reviewing all the information, click “Continue” to complete the process and start reaping the benefits of more experienced traders.
Hope this article has given you a simple overview of what copy trading means and the steps you can take to generate profits safely and enjoyably to invest.Use an established, reliable, and recommended trading platform like Margex. Choose the traders you follow carefully and ensure their trading strategy aligns with yours.
This type of trading has been in the market for many years, leaving many profits for those working on it. It is especially advantageous for people with little free time or beginners who do not want to take risks and prefer to continue acquiring knowledge and experience by copying successful strategies.
