What Is Copy Trading and Should You Do It?

The best part; is everything is automated, and you will be acting like a hedge fund without the hassle of compliance and paper work. In conclusion, what is the immediate edge? provides practical benefits such as access to the expertise of experienced traders, diversification opportunities, and time-saving convenience. However, it should be approached with caution and complemented by proper research and risk management. By leveraging the advantages of copy trading while remaining informed and discerning, investors can potentially enhance their cryptocurrency investment journey. You can choose from more than 1000 assets, like real stocks, commodities, forex, indices, ETFs, and cryptocurrencies.

• FXTM provides excellent educational resources for new traders, including live webinars, local seminars and videos, tutorials, and a demo account — all free of charge.
• This can be done manually, where you track another entity’s actions on your own, or automatically with the help of a dedicated platform or a bot.
• OKX Copy Trading aims to create a trading tool that is efficient, transparent, and profitable for OKX traders.
• Please pay attention that your country of residence may prohibit your participation in copy trading or holding crypto assets, then it will be illegal personally for you.
• Definitely something I’ll be watching closely as the platform is developing well, the base idea is great, and the system is efficient too.

You can use their free plan if you trade for less than $1000 per month, or you can upgrade to their pro plan for $29 per month and get unlimited trading volume and all features. Copy trading does not cost extra, but you may have to pay some fees to the exchange you use. The best part about copy trading on PrimeXBT is that you only pay a fee when your trader makes a profit. The fee is 20% of the profit and it is taken from your account automatically. Some of the popular bots are Grid Trading Bot, DCA Bot, Rebalancing Bot, and Leveraged Grid Bot. To start copy trading on Pionex, you need to follow some rules set by the traders you want to copy.

Why Opt for Crypto Copy Trading?

It’s essential to carefully consider the fee structure and weigh it against the potential returns you expect to make through copy trading. Remember that while low fees may seem attractive, it’s equally important to assess the quality of the platform and the performance of the traders available for copying. On the other hand, performance fees are calculated based on a percentage of your profits. This means that if your chosen trader generates positive returns, they will receive a portion of those profits as compensation. Performance fees can incentivize traders to perform better and align their interests with yours as an investor. Another crucial aspect is monitoring and evaluating the performance of the traders you are copying.

• Choosing the best copy trading platform can often mean the difference between short- and long-term success and dashed hopes.
• It’s crucial to conduct thorough due diligence when selecting traders to copy, considering factors such as their long-term performance, risk management strategies, and consistency.
• Coinmatics connects a part of your portfolio with the portfolio of your desired trader in a usable graphical form.
• It would be useless to learn about what is copy trading in crypto if you never learned how to do it efficiently and effectively.

Whenever the copied trader places a trade, the same trade is automatically replicated in the investor’s account. This allows the investor to mirror the trader’s strategy and benefit from their expertise. Blindly following the wrong trader can result in significant losses. Just because someone has a good track record in the past doesn’t mean they will continue to perform well in the future. Traders can also make mistakes, experience market volatility, or engage in fraudulent activities. Therefore, assessing a trader’s strategy, risk management practices, and overall performance is essential before deciding to copy their trades.

Risk Management Tools

Though this software is automated, initially, you have to provide your input. Yes, crypto copy trading can be profitable, but it is not guaranteed. You have to choose a secure platform and a profitable trader to follow. They can help you trade automatically and make the most of market movements. Copy trading in cryptocurrency allows you to directly replicate the positions of another trader.

• Our platform only needs deal-making access to do our social trading operations.
• Ideally, copy traders put together a “portfolio” of different traders to copy, so that they will always have a few successful ones running.
• It is the sharing of trading activities with others, either those you know or those who are well-known.
• So, by using the service of your copy trader, you will gain or lose proportionately.

With this tool, you can copy trades and only pay trading fees when profits are made. This minimizes your costs, while maximizing your profits, according to the project. There are many different copy trading platforms available, for different – kinds of markets. Other considerations include the fees you are paying to the trader and the copy trading platform. In essence, it allows you to follow other traders into their trades, and profit if they are successful — usually at a fee.

Is copying cryptocurrency trades legal?

Brokerage platforms are submitted to much stricter regulations than crypto exchanges, offering crypto trading features. Yes, even new investors can use copy trading because it is a passive system. This means that you can leave the difficult work of selecting investments to others. It’s possible to earn returns on your portfolio without spending hours researching the market.

• Ultimately, whether copy trading is right depends on your preferences and risk tolerance.
• In addition, you do not necessarily have to learn all the strategies and be proficient with market technicalities.
• Nowadays copy trading is one of the most popular features for traders (according to the research in BeInCrypto Trading Community) and many exchanges offer such functionality to their users.
• You can look for platforms that have multiple support channels, such as live chat, email, or phone support.
• This risk is often forgotten about when talking about copy trading risks but is still one to keep in the back of your head.

So, by using the service of your copy trader, you will gain or lose proportionately. However, you need to remember when selecting the traders to copy, you should know your trader’s position sizes they usually open, as this can impact your investment. This usually – happens automatically and without the requirement for any manual interventions. This copy trading platform also offers the FXTM Invest service for a minimum deposit of $100. For instance, let’s say you’re interested in copy trading Bitcoin and Ethereum.

Is Crypto Copy Trading Profitable?

Both the expert trader and the follower trader benefit from the copy trading feature. In the case of the expert trader, he can gain followers, make a name for himself and also earn a commission for every successful trade from his followers. As for those copying his trades — if the trades are successful, they make a passive income. This allows you to automatically copy traders and replicate their financial trades.

• One of the main factors behind learning how to copy trade crypto is directly tied to learning how other well-versed traders undergo their business, and monitoring their behaviors yourself.
• That’s why you should compare different platforms and brokers before you choose one to copy trade with.
• The process of copy trading is usually done automatically, with the platform executing trades on behalf of the investor, based on the trades of the chosen trader.
• You can trade both spot and futures contracts of various cryptocurrencies, such as Bitcoin, Ethereum, Tether, Binance Coin, and many more.
• Of course, if times occur when you do not feel comfortable with copying anybody else, then simply disconnect from them all and take matters into your own hands.

However, they do offer a future leaderboard and it may have this feature enabled soon. You can click on any name to see more stats about their profile. You can further click on any profile to see their detailed stats which include performance over time, their existing portfolio. Once you have found the trader you wish to copy, simply click on copy and you would be asked to add the funds.

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The presented trading history is less than 5 complete years and may not suffice as basis for investment decisions. If you absolve yourself from your own trading, then you can easily sleep-walk into disaster. If you want to be efficient, then you need to learn how to copy trade crypto intuitively. You need to learn about when you should follow one individual, and when you should switch things up and sync to somebody else.

• The community-sharing of ideas is a great way to improve your trading, boost your performance and to learn new things from like minded people.
• If you want to disconnect yourself from somebody else, you can easily do that at any time, and reconnect with them in the future, too.
• You can deposit funds on eToro via various methods, including PayPal.
• The main advantage of using copy trading is that it allows you to take advantage of another person’s investment experience and knowledge.
• Afterward, you can customize the trading procedure according to your funds and preferences.

You would want to choose a broker that not only supports these popular cryptocurrencies but also provides access to other promising coins in the market. Now that we understand the importance of optimizing the risk-reward ratio, let’s focus on another crucial aspect – building a copy trading investment strategy. BitDegree Learning Hub aims to uncover, simplify & share Web3 & cryptocurrency education with the masses. Join millions, easily discover and understand cryptocurrencies, price charts, top crypto exchanges & wallets in one place.

Benefits of Copy Trading

In terms of legal status, copy trading of cryptocurrencies is legit. However, it comes with its own risks and limitations, just like any investment. One of the obvious risks is that while copying trades, you may also lose some as it’s part of trading. Copying trades is also a great way to familiarize yourself with cryptocurrency trading quickly. While observing and practicing others’ investment strategies, you comprehend them easily.

All you need to do is sign up on the exchange, link your exchange account to Coinmatics with an API key, and pick a strategy from a trader. It’s your choice, you can start or stop copying whenever you want, pause it, and add or remove funds as you like. You can also talk to the traders you copy, discuss strategies and learn from their knowledge. Copying is free of charge, but you will still pay the 1% spreads and transaction fees. You just need to put some assets in your exchange account, find a good trader on a crypto copy trading platform, and let the software do the rest.

What is the best free copy trading app?

It’s important to note that while copy trading can offer practical benefits, it is not devoid of risks. Past performance is not always indicative of future results, and blindly following a trader’s every move can lead to losses. It’s crucial to conduct thorough due diligence when selecting traders to copy, considering factors such as their long-term performance, risk management strategies, and consistency.

• As the cryptocurrency market maturing, we can expect more similar platforms.
• Coinmatics copy trading service allows copying deals made by traders and trading bots, as well as receive signals from verified strategies.
• This activity can be achieved via many exchanges, such as eToro, Binance, KuCoin, and Kraken.
• You can also trade with high leverage, up to 100x for some coins.

This can be done manually, where you track another entity’s actions on your own, or automatically with the help of a dedicated platform or a bot. It is a strategy that allows investors to copy the trades of experienced and successful forex investors and implement the same trades, in almost real time, in their own accounts. Mirror trading was initially only available to institutional clients but has since been made available to retail investors through various means.

The Rise of Copy Trading — A Brief History

Or they may be a big fan of shorting, which is where an investor borrows an asset and sells it with the expectation that the price will drop. They then buy the same number of the asset back at a lower price, return the shares to the lender, and profit from the rest. Since it’s powered by Binance, the Trality Wallet is built on the industry’s safest and most secure custodial wallet infrastructure. Any and all funds deposited into the Trality Wallet are backed by Binance.

• You should be able to find your way around and make trades without any hassle.
• Now that we understand the importance of optimizing the risk-reward ratio, let’s focus on another crucial aspect – building a copy trading investment strategy.
• We were looking for a place to support our strategy, and be able to share it, and we found it.

Because of the algorithmic nature of trading, it also runs 24/7 and is not affected by emotions. The community-sharing of ideas is a great way to improve your trading, boost your performance and to learn new things from like minded people. Exchanging different viewpoints will generate insights that you will never find on your own.