Trading 101: What Is Copy Trading?

BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency. Before making financial investment decisions, do consult your financial advisor. Reading through various best crypto exchange reviews online, you’re bound to notice that one of the things that most of these exchanges have in common is that they are very simple to use. – While some are more straightforward and beginner-friendly than others, you shouldn’t encounter any difficulties with either of the top-rated exchanges. That said, many users believe that KuCoin is one of the simpler exchanges on the current market. A final major reason why people do this is that they are able to leverage their influence on the markets.

• And you can choose different types of trading, like spot, futures, and perpetual.
• Remember what we said about success at the very beginning of this article?
• These bots will have a smooth PnL when traded under the right conditions.
• This makes AvaTrade one of the best copy trading platforms for traders interested in all financial markets, not just cryptocurrency.

It offers all these features of a regular crypto exchange and seamless crypto derivatives trading. It is an all-encompassing platform that can meet all your trading needs. Copy trading is one of the best ways to automate your investment strategy. This eliminates the guesswork and the lack of experience that’s needed when choosing how to invest your hard-earned money. Of course, the strategy might not be the best strategy for all investors, but these systems have worked for many retail investors. With this strategy, instead of replicating an investor’s movements trade for trade, you’re mirroring their overall investment style.

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Another thing to look for is the social trading community on the platform. Talking to other traders can give you valuable insights and improve your trading skills. These features give you more control and help you adjust your copy trading strategy to your risk level and goals. You can choose from hundreds of traders who trade different coins and strategies, and see their profiles, comments, and track records. You can also chat with them and learn from their tips and insights.

• But there are things that you should bear in mind when considering copy trading and profitability.
• Thus, the system works to the advantage of expert traders as well as those following them.
• Whenever the copied trader places a trade, the same trade is automatically replicated in the investor’s account.
• Copy trading in cryptocurrency allows you to directly replicate the positions of another trader.

To reduce risks, users can first use a demo account for copy trading. Using key indicators like the trader’s account assets, cumulative P&L, 30D profit rate, maximum drawdown, etc., users can study the strategies while making a profit. Factoring in all aspects of cryptocurrency copy trading is important before investing. When one decides to go for crypto copy trading, the first step is to identify the right trader. The efficiency of copy trading is invariably hooked to the skill level of the trader one is following.

Is copying cryptocurrency trades legal

The platform currently supports over 16 cryptocurrencies in addition to stocks, commodities, and currency pairs. Bybit makes it simple to find traders to copy, automatically open and close the same trades they do, and watch your crypto balance grow. To profit from their work, principal traders can allow others to copy their strategies and trades via the Bybit platform. In exchange, they receive 10% of the profits earned by each follower. BingX is a copy trading platform with over 1 million users within 100+ regions, BingX provides over 300 cryptos ranging from Bitcoin, Ethereum, Dogecoin, Safemoon, Solana, etc.

• They could pause any trade the software makes or could decide on their own about closing a position without waiting for the action of the lead trader.
• But generally, it involves choosing an experienced trader and following their decisions.
• However, modern providers of copy trading services enable the process to be completely automated.

Worry less, Coinmatics got you covered with their unique copy trading. Coinmatics connects a part of your portfolio with the portfolio of your desired trader in a usable graphical form. Once you copy a trader, all of their opened trades are automatically copied to your account.

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You can start out copying top traders at FXTM with a minimum deposit as low as $100. ZuluTrade supports over 40 forex brokers, one of which being their integrated solution (AAAFx). It allows investors with existing brokerage accounts to link a new account via their existing broker easily. First and foremost, you should look for a broker that has a good reputation in the industry.

• But it also has some challenges, such as finding trustworthy and compatible traders to follow, controlling your risk level, and keeping up with market changes.
• There are a few important things to keep in mind before you get started with this strategy.
• Another thing to consider is the copy trading features of the platform.

It is to find all required information on typical copy trading software as traders willingly consent to give member traders access to their trading moves. One can examine the track record of various lead traders on the dashboard and select the one that fits in with the parameters of their choice. Investors – should carefully consider the trader they want to copy and conduct thorough research before copying their trades. It’s also essential to manage risk by setting stop-loss orders and monitoring one’s portfolio regularly. The best platforms for copy trading are eToro, AvaTrade, Bybit, and BingX.

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For example, on eToro, you don’t pay extra for copy trading, but you still pay the normal fees for spreads and overnight fees. Again, on NAGA, you pay €0.99 for each trade you copy, and 5% of your profit if it is more than €10. You also pay the broker’s fees for spreads and commissions, which change depending on what you trade and what account you have. The trading fees for copy trading are not the same for every platform or broker. This does not include the fees you pay to the broker for spreads and commissions. Be careful of platforms with high fees that may eat up your profits over time.

The expert traders are called “Traders” and the people who copy them are called “Copiers”. When you choose an investor to copy, you can decide how much money to put into them. The percentages will be calculated automatically so that every trade they make will be copied into your portfolio with the same percentage.

BingX: Best for copying global traders

Basically, cryptocurrency copy trading is all about identifying skilled traders and re-executing their moves literally. A trader doesn’t have to spend time picking market trends or learning complex trading methods. Rather, the software just mimics what the expert trader is doing. To become a copy trader, you need to have a trading account with a broker that offers copy trading services.

• Instead, they can rely on the knowledge of other traders to make sound decisions.
• You just need to find a trader that you like and start copying them.
• In this sense, copy trading can be a good idea for experienced traders looking to take a step back, but it is likely unwise for people just starting out.
• If you’re using a copy trading platform to manage your portfolio for you, then you may also pay management or administrative fees to the platform.
• If you did not know about this, odds are you would have already stopped copying the trend-following system before a trend shows up.

After you have set up your account, you can go to the “Marketplace” on 3Commas and find traders that you want to copy. You can filter them by different criteria, diverse like an exchange, coin, profit, risk score, followers, etc. In copy trading, you don’t have to learn anything or spend hours looking at charts.

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The most important takeaway is that copy trading can happen even on exchanges that do not have the tools built in. This is great news as it means you can freely choose whatever exchange you are most comfortable with, and that you enjoy trading on the most. For instance, eToro has a dedicated copy trading tool that is designed to be very user-friendly, making it perfect for absolute beginners. Not only this, but eToro’s copy trading tool is free to use as well. This, too, is a huge weight lifted off many newcomers’ shoulders, as the fear of losing money when starting out is something that looms over many people’s heads.

• Therefore, there is a need for information transparency (i.e., detailed versus aggregate trading performance) and the timed release of data (i.e., immediately or with a delay).
• Since the cryptocurrency trading market is rather new, it might be a good idea to follow a professional trader who has more technical knowledge than you have.
• Copy trading can offer many benefits, but it’s important to consider the potential risks involved.
• Finestel is one of those crypto copy trading software that you always wanted it to be existed.

While some of the best things in life might be free, profitable trading bots are not one of them. And given the levels of complexity and time involved, why should they be? Professional copy traders will require a commission payment for their services, and quite rightly so!

Risks of cryptocurrency copy trading

3Commas is one of the best platforms for automated crypto trading. It has many features that make trading easier and more profitable. For instance, if the trader the copy trading software is following invests $100 to buy coin A, the software will also spend $100 on the same cryptocurrency. The tool not only helps amateur traders to use the expertise of other traders but also helps them learn the skill of making smart investment decisions. Cryptocurrency copy trading is an automated strategy that lets one copy an experienced trader’s trading methods. This enables one to buy and sell crypto assets to earn profits without putting in a lot of time for researching or gaining proficiency in crypto trading.

• No matter if you choose to copy trade, trade yourself, or join a social trading community, we wish you the best of luck in your journey.
• After you start your investment, you will have the same traders in your portfolio as the trader that you just copied.
• Once you’ve found a trader you want to copy, you can connect your account to their account and start copying their trades.
• This kind of social trading is ideal for investors who are beginners and good in picking the top traders.

This is where you buy coins or tokens at the market price and your trade is dealt with on the spot, rather than at a future date. For instance, simply buying $100 worth of Bitcoin at market rate. It is what most people think of when they think of trading– it is simple and straightforward. There are highly experienced traders who predominantly spot trade, so you could always seek one of these people out. XT Futures copy trading allows you to replicate real time trades of top cryptocurrency investors with one click.

Successful Crypto Trading Performance on Autopilot

These tools help reduce potential losses and protect your capital when the market is unstable. If you’re new to crypto copy trading, you need a platform that has a simple and attractive interface. BingX lets you follow and copy the best traders in the crypto space, who know how to make money even when the market is down. The fees for copy trading on Gate.io are the same as the normal trading fees for spot and futures markets, which depend on your VIP level and trading volume.

You can show off your trading strategies and attract more followers and copiers. Earn 10% of the profits from each copier, plus an extra 2% from OKX. You can see your balance, profit, loss, open positions, closed positions, etc.