What is Copy Trading in Crypto? How to do Copy Trading

Within social trading, however, there is something called the “transparency-revenue conundrum.” Trading platforms have to work out a delicate balance when it comes to transparency. While it takes more time and effort than other types of trading, the advantage of social trading is that it allows you to learn how to trade and understand markets. It also gives a trader complete freedom to mix and match different strategies and trading styles, not requiring them to blindly follow other traders and their strategies. Copy trading could be the first step for one to become a proficient cryptocurrency investor.

• You could potentially make money by copying another trader’s skills and experience.
• Copy trading is copying the trading strategies or trades of someone else.
• Followers could then manually join on to the trade or decide against it.
• Also, it is not necessary to work out entire investment strategies independently.
• So, even if a well-regarded trader is doing this, it might not be smart for a beginner to follow them.

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 immediate edge 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.

How much can you make from copy trading?

To comprehend the legal status of copy trading in the country one resides in before investing is as important as to establish that the dealer is regulated. Plenty of regulations have been framed for copy trading, so one – can regard copy trading as a legitimate trading method if they are using an authorized service. This concludes our write-up on copy trading — its risks, benefits and history as well as strategies to use in copy trading.

• Also, check the reviews about the copy trading platform to gauge its performance.
• By understanding the risks and taking necessary precautions, investors can use copy trading as a valuable tool to enhance their trading performance.
• Decide how much capital you want to allot to each trader you follow.
• That’s why you need a dependable and user-friendly copy trading platform that gives you a wide range of traders, instruments, and tools to help you succeed in your copy trading journey.
• Just as businesses must know their customers, so too should you do your due diligence when picking a reputable trading platform.

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, 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.

Phemex: Best Crypto Exchange for Copy Trading

For beginner traders, it is a good tool to generate trading income, but they must be sure the person you are copying knows what they are doing. For other traders, copy trading is a great way to stay active in a market when they don’t have the time to commit to trading themselves. What I really like here is, if you know anyone of your good friend who is pro in trading, you can ask him/her to create an account on Finestel and let you copy this trade. They can also setup a performance fees which will help them to make extra money from the trading.

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.

Holistic and long-term view of cryptocurrency copy trading

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, assessing a trader’s strategy, risk management practices, and overall performance is essential before deciding to copy their trades.
• 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.
• 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.

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.

Top Cryptocurrencies

The fee structure imposed by your chosen copy trading broker plays a significant role in determining your overall profits. While it’s tempting to focus solely on finding brokers with low fees, it’s crucial to understand how different fee structures can impact your investment results. In many ways, this feeling of elation and connectivity, coupled with the following of trusted individuals is the answer to the question of what is copy trading in crypto! It is the sharing of trading activities with others, either those you know or those who are well-known.

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.

Systematic Risk

They will perform well under the right conditions, but require a knowledge of market dynamics in order to be applied correctly. Trend-following strategies are designed to work well in directional markets with low noise. Since you will be relying completely on another person, it may not give you the analytical knowledge needed to excel – at trading. Besides, the settings panel of the copy trading app will give you complete control over your assets, even though they are self-executing. So, if you feel that a trading move is not right, you can opt-out anytime. They offer you a wide range of crypto assets and eToro also supports stocks, commodities, currencies, and more.

• In this, even a crypto trader can easily take advantage of the volatility in stocks or forex, without having to learn the ins and outs of the industry.
• Furthermore, you can always decide to stop copying the traders of others.
• A final major reason why people do this is that they are able to leverage their influence on the markets.
• So, you should always check the legal status of crypto copy trading in your country before using any platform or service.

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.

How To Successfully Copy Trade

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.

• You can access it on Bybit’s website or mobile app with the name “Top Master Traders”.
• It is understandable to hear about how to copy trade crypto and assume that it is an easy task, especially when it comes to using automated services in the crypto space.
• After deciding on the trader you want to copy, simply click on the “Copy” button.
• A copy trading platform is a financial trading platform that offers retail investors the option to follow and automatically copy the trades of more experienced traders.
• Learn how to use Coinbase crypto exchange referral codes for exclusive benefits and offers.
• Some examples of apps that work with Binance are Coinmatics, WunderTrading, 3Commas, Cryptohopper, etc.

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.

What is the benefit of copy trading?

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.

• This feature also provides new revenue streams for lead traders.
• Get information for arbitrage trading from various exchanges to find deals with the highest spread.
• In this case, copying other professional traders can help you make some profits and earn some money.
• 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.

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.

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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.