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Copy-trading is a way to automate your trading by copying the trades of other traders. It’s frequently utilized by newbies that may not yet know how to trade, with the included benefit of assisting to tutor them on the way. For more seasoned traders, it can allow them to be absent from their screens if they require to, as all trades are automated.
The goal of copy trading, like normal trading, is to launch positions on several financial markets adding FX, CFDs on Stocks, Commodities, Indices, and Cryptocurrencies, and then to seal the position if hopefully, the asset has moved higher. Just like normal trading, losses can occur during the copying process.
This option is best for people who do not have any trading experience or do not have the time needed to trade. There are many brokers that offer this option of copy trading, some are manually done and some are automated. This makes it easy for you to sit back and watch the expert do the job without worrying about the technicalities.
Benefits Of Copy Trading
- It gives newbies the opportunity to watch and learn from the expert as they execute trades.
- It enables newbies to get familiar with the financial market, have the confidence before delving into trading themselves.
- As a newbie in the financial market, you can earn money while learning at the same time.
- As a newbie, you can enjoy the social atmosphere created by these platforms made up of experienced traders and beginners as they share ideas on how to execute trades.
How To Copy Trade
- Open an account with a platform that offers the option of copy trading, like Etoro and Zulutrade.
- Once your account is verified select a broker from the platform so as to fund the account. Some of the platforms give you the option to fund the account directly into your account using your card to start copying traders.
- When your account is funded, you can select from the list of traders based on performance. I strongly recommend selecting traders that have been trading for at least more than six months or even one year. Thus you will be able to confirm that they are good traders with a good track record.
- Always set your profit and loss settings to indicate what percentage of your fund you can afford to lose during drawdowns.
Note: Past performance is not an indication of future results. Trading is a high-risk investment but can be profitable too. So do not invest what you cannot afford to lose
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