What is Copy Trading and how it Works In the Cryptocurrency Sphere?

by Antonio Boston marketing manager

The constantly evolving and fast-paced crypto sphere is an exciting arena for crypto traders, offering unique opportunities. Crypto trading has increasingly become a social activity, with millions of users trading on popular crypto exchanges and trading platforms. As new users are nervous to trade on their own due to the risky nature of crypto assets, volatility, as well as unpredictable market trends, copy trading offers a comfort level to them.

 When beginners make a decision to enter the crypto trading market by copying the trades and strategies of expert traders, they come across the best crypto trading platforms like TrailingCrypto. And, this is termed as copy trading.

It’s all about following the already in-profit signals, trading bots, and expert traders. To perform copy trading, all you need to do is to connect your exchange account to the right copy trading platform, checking out their marketplace, and then following your preferred strategy. After performing all such tasks, the social/copy trading platform will automatically copy the trades to your exchange account.

Let’s understand in deep about copy trading and how it works:

Copy trading

Crypto copy trading is one of the easiest ways to piggybank on the skills of expert traders and makes a massive income. It is all about copying the trading strategies of someone else like the experienced crypto traders who are constantly generating more profits as compared to losses.

Copy trading is also known as mirror trading or social trading. The copy trading bot offered at the best crypto trading platforms automates the buying and selling of the crypto assets by mitigating the original trades of the experts. This kind of trading could be either automatic or manual. But it is much better if it is automated.

And, if you are a pro-trader, you can offer your services via the top crypto trading platforms and earn a profit when people who are copying your trades are making a profit.

How does copy trading work?

If you are interested in trading cryptocurrencies but don’t have time to keep track of the market and latest market trends, considering copy trading on the top crypto exchanges like TrailingCrypto is the better option. This type of trading removes the hassle of implementing and managing your own strategy and lets you rely on professional traders to place trades.

Let’s understand it with an example:

When a trader conducts copy trading, a part of his crypto trading gets linked to that of a pro trader. And, with this, all of their open trades get copied from account to account. Additionally, all actions which will be taken in the future will also be copied accordingly.

The copy trader can decide how much money he wants to invest in the trader they are copying from the crypto copy trading platform. And, this should not be higher than 20 percent of the copy trader’s portfolio.  The sums used in the trades are usually represented as the percentage of the trader’s portfolio.

Let’s say, a trader may have a balance of $1000 in his account, and as they have no open trades, they intend to copy a successful trader. It’s important for novice trader that they don’t invest a large amount in copy trading, and it’s better to use just 10% of that which is $100. If you decide to go with the copied trade, and the original trader has just one open trade, which is copied into the copy trader’s own account.

As the $100 sum is a percentage of the original trader’s portfolio, it will be 10 percent if their portfolio is $1000.

Should they conduct trade for $100? The copy trader will do the same, but if the trade is likely to cost more, systems can be configured smartly enough to manage this automatically.

When choosing a trader to copy their trades, you must consider some important information about him like:

•          Experience
•          Overall profit
•          Preferred strategies
•          Preferred assets
•          Overall rating

Automated crypto trading has now become a standard across crypto copy trading platforms. Copy trading process is fully automated and if you wish, you can also carry out automated activities as well. For example, in copy trading, you can create stop loss and take profit orders. Additionally, you can also diversify your portfolio and can trade with several assets.

Benefits of copy trading

There are many reasons why the popularity of copy trading in the crypto sphere has been steadily growing. Let’s have a look at some of these:

·       It allows traders to start earning money immediately, even if they lack crypto trading skills, knowledge, or experience.

·       You don’t need to stay glued to your mobile or laptop 24/7.

·       Copy trading allows you to choose from different assets and trading strategies. And, at any moment, you can switch to a new strategy as per your convenience.

·       Copy trading gives you the right to make independent trades.

·       Before you subscribe to a pro trader, you can get exhaustive information about him from the crypto copy trading platform.

·       In this type of trading, you can start trading by using only some part of your savings and you won’t need to put all your earnings at a time.

·       It also lets you analyze all the deals that the pro trader makes and learn. Later on, you may use this data for independent trading.

 

Apart from this, copy trading is beneficial for the beginner as copying the trades of someone who is better than you is extremely convenient.  And, it’s always better to choose the copy trading bot to automate your trading.

Advantages of copy trading bots

•          Saves time
•          Helpful for beginners
•          Copy trades 24x7
•          Ease of use
•          security
•          Lets traders earn even with zero experience

Popular crypto trading platforms offering copy trading

So, which trading platforms are the best for crypto traders? Let’s have a look at these:

•          Coinmatics
•          Shrimpy
•          3 Commas
•          Zignaly
•          eToro
•          Cryptohopper

All these crypto trading platforms work with complete automation and allow novice crypto investors to copy trades from expert traders. These platforms allow traders to make the most of their trading strategies, reducing losses, and maximizing their profits.  TrailingCrypto is the best crypto trading platform allowing traders to automate their trading.

Conclusion

If you are a beginner and your experience in crypto trading is not extensive, you can either rely on copy trading or try copy trading bots. Both can come in handy if you are interested in crypto trading.

Yet if you are a novice trader you might opt for copy trading because in this case, you will be the only person who can access your crypto assets. Additionally, the most experienced traders use crypto trading bots while trading, and you can earn a good profit from this implementation.

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Created on Oct 19th 2021 04:43. Viewed 321 times.

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