Are you interested in copy trading? Do you want to know what exactly it is and how it can enable you to make money without trading skill and experience? Copy trading is simple. All you need to do is to copy an experienced trader to make profits from his experience. Copy trading will enable you to copy the actions of a trader. The process will be easy for beginners since they will get an automatic system to copy a trader. The system will be provided by their platform.
How does it Work?
As stated earlier, copy trading is all about to copy a trade of an experienced trader. You can copy any trader you want. For this, you will have to connect a part of your portfolio with the trader’s portfolio. Once you start copying, all his open traders will be copied to your account. You will be allowed to choose an amount to invest in any trade that you find profitable. In many cases, you might not be allowed to use a sum of more than twenty percent of your portfolio. For example, you have only 1000 USD in your account. You do not have open trades and you want to copy a trader. But you do not want to risk a big amount. In that condition, you can invest only 100 USD by copying that trader.
What Makes Copy Trading Beneficial
Trading is not easy for all especially for all those who want to start without any expertise and experience. If you try without industry knowledge, then there is every possibility that you will lose all your hard earned money. Therefore, it is important to enhance your skill before taking such a risk. You can choose a relatively safe option by copy trading. It will be beneficial if you choose an experienced trader. Otherwise, it is not going to serve your purpose. Copy trading will enable you to start trading and invest your money without trading skill. You can say that copy trading allows beginners to benefit from the knowledge and experience of better traders. You can follow their steps to invest your money and you can learn trading strategies from that process.
How to Make More Profits
If you allow your trader to handle your investment, you can raise more funds. Once a trade will be copied to your account, you can invest more to get more profits depending on the experience of your trader. Otherwise, you might lose your money. You should always keep in your mind that the win and loss of your trader will decide your profit and loss. So, it is important to act smart to avoid a big loss.
The best idea to raise more money is to invest in different traders. You can consider the performance of different traders to decide an investment. You will have the freedom to reduce and increase the amount of the investment. Initially, you might not make more profits. But once you will have the idea of different levels of traders and their trading ability, you can risk more money. Also, when some platforms will give more control over your investment, others might offer a fixed system.
What is a Fixed System?
In this system, you can start following your trader after he loses a certain amount. The system will enable you to control your funds manually. You can stop copying the traders to avoid any further risk.
Best Copy Trading Platforms
If you are looking for the best copy trading platform, you can consider eToro, Zulu Trade, Darwinex, Tradency, and Ayondo. All these platforms offer some advanced features to help the beginners to benefit from the experience of industry experts.
Copy trading has both positive and negative effects. For example, if your trader makes money, you will be able to make money. When he will lose his money, you are going to lose yours. The smart trading is the one where you only invest a small amount. Even if you lose the money, it will not affect much. However, if you find that the trader is capable of making huge profits, then you can invest more. Instead of blindly relying on the traders, it is important to learn from his experience.