What Is Copy Trading and Should You Do It?

However, knowing that somebody else is having the very same successes as you can be elating and deeply positive to your well-being. You should now have a good overview of what is copy trading in crypto. This is a relatively simple process which is great for new traders to try out themselves, but it definitely comes with its own questions and concerns. Recognizing these concerns is all part of the process of grasping what is copy trading in crypto, but do not let them get too much in the way of your own activity.

• Oftentimes, people do this by following more experienced traders, or even by following the actions of trading bots.
• New crypto investors can easily follow and copy the trading strategies of successful traders.
• Then, immediately after your chosen principal trader places a market order, all new copy trades will be initiated via a market order based on those parameters.
• Some platforms may also have low fees for certain assets or markets.

After you have found the trader to copy, everything else is automated. In addition to standard copy and social trading tools, Shrimpy has a rebalancing tool that allows you to automatically rebalance your portfolio according to your preferred risk/reward. Trading signals are messages alerting you to potential trading opportunities. Signal providers use various kinds of analysis to bring trades to their followers, sometimes even with a take profit target and stop loss. Signals are usually not copied automatically, but manually followed by the group members.

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At least with crypto, everybody is aware of their fallibility, leading to more caution. You can also monitor the results copy trades – are generating for you. Observing the progress will also enable you to understand how to backtest the crypto trading strategies.

• Copy-trading allows copying positions of another trader, and lately, it has become more popular.
• As always, it is important to do your own research before investing your hard earned money; never invest more than you can afford to lose.
• It also fits into the wider ethos around blockchain and cryptocurrency, where transparency is viewed in a positive light.
• Most crypto copy trading platforms charge some fees or commissions for using their services or copying trades.

For instance, choosing to be a copy trader on eToro means you receive an annual payment of 1.5% of the assets that people copy-traded when they followed you. Depending on how many people follow you and how much they put in, that could be a huge amount of passive income. So far, our discussion on what is copy trading in crypto has touched on the act of automating your copy trading habits, but let’s delve further into it now.

Successful Crypto Trading Performance on Autopilot

Here’s what copy trading is, how it works and what you can expect from it. It’s one of the most effective trading strategy for individuals who don’t necessarily have the time to trade independently. Here, you just need to fund your account, crypto leverage trading australia leave it alone, and hope to see it grow, or you can monitor. For instance, if a copied trader suddenly changes their strategy drastically without any explanation, it might be a warning sign for you to reassess your investment allocation.

In line with the Trust Project guidelines, the educational content on this website is offered in good faith and for general information purposes only. BeInCrypto prioritizes providing high-quality information, taking the time to research and create informative content for readers. While partners may reward the company with commissions for placements in articles, these commissions do not influence the unbiased, honest, and helpful content creation process. Any action taken by the reader based on this information is strictly at their own risk. After filtering and selecting the trader that focuses on your preferred assets, you may check out more detailed stats on their profile. You may see how many are already following and copying their positions.

Our Core Product for Investors

Connect your account to the trader of your choice and sit back, waiting for results. Following that, the trading platform will automatically copy each move made by the chosen traders into your trading account. All software, no matter how well they are developed, might go wrong at any time and begin delivering unexpected outcomes. A trader needs to keep monitoring the cryptocurrency trading process and exit their position if they feel they are generating continual losses. To a large extent, the efficiency of the cryptocurrency trading process depends on the choice of the platform and expertise of the lead trader.

• You can also change some settings of the bot, such as the stop-loss percentage, take-profit percentage, and leverage ratio.
• Some of the services that you can use are Zignaly, AIVIA, and WunderTrading.
• BYDFi offers a demo mode that allows you to make practice trades using real market statistics.

It’s essential to thoroughly research and analyze the performance history and risk profile of traders before copying their trades. You can also find copy traders from certain services which use the APIs from other trading platforms, and help connect newcomers to those who are giving away their trading habits. The best way to grasp for yourself what is copy trading in crypto is to find one of these traders and start following them, as practice helps to cement ideas. So, how exactly do you find people who you want to emulate, because what is the utility in learning what is copy trading in crypto if you never find the right people to copy trade from?

Finestel – Copy trading platform

With just a few taps in the Marketplace’s mobile app, investors can easily leverage the expertise of professionals by renting the most trusted bots on the market. These apps work on trained models and can imitate others’ investment strategies. Also, some crypto copy trading apps allow you to choose multiple traders. They offer features such as portfolio management, smart trade, social trading, and more. They also support a wide range of cryptocurrencies and exchanges for your convenience. Check for platforms that have forums, chat rooms, or social media integration, where you can connect and learn from experienced traders.

Well, you don’t need to be disappointed as copy trading platforms are here to your rescue. This is one of the easiest ways for anyone to piggybank on the skills of experienced traders and make a passive income. Of course, it comes with the inherent risk of trading, but with a disciplined approach and by regularly finding top crypto traders, you can ace the game of crypto copy trading. Most crypto copy trading platforms charge some fees or commissions for using their services or copying trades. And, you need to pay your principal trader for copying their traders.

What is the benefit of copy trading?

Investors can rent profitable bots tailored to specific risk tolerances (low, medium, and high) and individual investment goals. A full suite of metrics is available, allowing investors to decide on a bot based on clear, quantifiable data. But there are things that you should bear in mind when considering copy trading and profitability.

• The trading history presented is less than 5 complete years and may not suffice as a basis for an investment decision.
• 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.
• ZuluTrade also allows login via Facebook, convenient for those who regularly log in to check their account.
• With this strategy, instead of replicating an investor’s movements trade for trade, you’re mirroring their overall investment style.
• Copy trading could also be expensive if you’re paying commissions for frequent trades.

Once you copy a trader, all of their opened trades are automatically copied to your account. Choose from a wide range of unique strategies submitted by carefully selected crypto traders with verified track records. Copy trading can also have a negative impact on an investor’s psychological well-being. The fear of missing out (FOMO) can drive investors to make impulsive decisions based on the success of others. Additionally, having no control over your own trading decisions may cause anxiety and stress for some.

Pionex: Low Fees Copy Trading Software

In this case, investors trade the relative value with the expectation that the prices will return to a long-term average. These bots will have a smooth PnL when traded under the right conditions. Another risk of using crypto copy trading apps is they may experience a system – outage or cyberattack at any time. It means your assets will depend on the performance and security of the software. Portfolio diversification is another plus point of copying trades. You can follow multiple traders who use different mechanisms and invest in varying assets.

• These exchanges allow users to connect their accounts to those of more experienced traders and automatically emulate their trades.
• Factoring in all aspects of cryptocurrency copy trading is important before investing.
• If you find a trader who aligns with your own trading beliefs, you will feel much more comfortable going forward and copy-trading crypto with them.
• Say you’ve picked someone who consistently generates high returns in their portfolio.

For example, Pionex is one the best low fees copy trading platforms. Yes, copying cryptocurrency trades is legal in most countries where cryptocurrency is allowed. But different countries may have different rules and requirements for crypto copy trading platforms and users.

How Does Crypto Copy Trading Work?

Cryptohopper is a platform that lets you use different features and tools to trade cryptocurrencies. For example, you can copy other traders, use automated trading bots, analyze the market, and use advanced tools like backtesting, market-making, and arbitrage. 3Commas is one of the best platforms for automated crypto trading. It has many features that make trading easier and more profitable.

• This broker platform is able to meet your needs, regardless of whether you are a forex trader newbie or an experienced trader.
• This knowledge will allow you to make educated decisions and engage proactively in managing your investments.
• Look for platforms that have popular coins like Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and others.
• It will copy the trader’s orders on your account as soon as they happen.

This is the crux of why many people choose to broadcast their movements– they want to help people with copy-trading crypto. The first way is that copy trading can function as a niche form of social media, where you are essentially communicating with other traders by following their actions. Once again, eToro is the perfect example here – the brokerage functions like such as platform already.

Supported Cryptocurrencies

PrimeXBT also offers a trading terminal as well, that you can use to make trades other than social trades. You can spectate top traders’ trades and copy their trades automatically. This kind of social trading is ideal for investors who are beginners and good in picking the top traders. Copy trading could also be expensive if you’re paying commissions for frequent trades. 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.

• Copy trading is just one way to automate your investment strategy.
• This means that if your chosen trader generates positive returns, they will receive a portion of those profits as compensation.
• With the Trality Wallet, you no longer have to manually configure and manage API keys from an exchange account in order to connect to Trality.
• They are one of only a few top forex brokers to offer fixed spread forex trading.
• In this case, investors trade the relative value with the expectation that the prices will return to a long-term average.

Copy trading is copying the trading strategies or trades of someone else. Usually, it is experienced traders who are constantly generating more profit than losses. While we are at it, you should know that Copy trading is also known as social trading or mirror trading. You can do copy trading on your own or through a copy trading platform. Trades happen automatically so there’s very little you have to do.