A Complete Guide To Copy Trading And Social Trading For Beginner Investors » The Trader In You

After all, you may not be familiar with some trades or not interested in following all of them. With copy trading, however, you can slowly but surely make your way into the market, for instance, by copying only one trade. Social trading platforms do not have stores that you can go to; they are online enterprises. As such, it is inevitable that they are licensed and regulated to provide security. Technically, copy trading is nothing more than a certain form of investment. You can take all the information that you need for a specific trade from the comment section.

It has a rich pool of traders, and it provides instant deposit and withdrawal methods. In addition to knowing how you can fund your account, you need to know how fast you can receive the money when you order a withdraw from the platform. Choose a trader with good commissions or profit share splits.

Moreover, the website has a support service that is responsive to questions. A good copy trader should have consistent results and a large number of followers. If their followers are few, that means that they’re not very good at trading. Some copy traders have used questionable tactics to boost their rankings.

It is if you choose the right strategy provider and the right social trading platform. Provides their trading expertise or trading strategy to be copied by investors for a commission. In this copy trading for beginners’ guide, I will help you understand what copy trading is.

  • You should never trade money that you cannot afford to lose.
  • Over time, this may help you to learn many of the basics that you’ll need to know if you want to be a successful trader in your own right.
  • Professional traders know when to accept the losses and leverage stop levels effectively before the losses become unbearable.
  • 79% of retail investor accounts lose money when trading CFDs with this provider.
  • The best copy trader will also be someone with at least 10 years of trading experience and at least 1000 trades.
  • Every time your copied trader invests more money or in another trade, so will you.

This article will explain the risks of copy trading and help you identify good traders. First of all, BingX has gone above and beyond to ensure that it provides the best service when it comes to copy trading. While some cryptocurrency exchanges or copy trading platforms charge almost up to 3% per transaction, BingX has their fees as low as 0.045%. This is the only transaction fee there is, since there are no spread charges. To start off with your new venture, you need to find a reputable social style trading platform to follow. There are many platforms out there that offer extensive lists of traders to copy, as they detail their exact movements within the markets.

Trading cryptocurrencies has been popular probably ever since the 2017 bubble. During that time, Bitcoin’s price increased twentyfold, from about 1,000 dollars to almost 20,000 in less than a year. Several other cryptocurrencies made even higher profits, which gave many uninformed what is copytrading people the misconception that it is easy to make money from cryptocurrencies. TradeWise is not authorised or regulated by the Financial Conduct Authority. Information on this Website is provided for general information purposes only and should not be relied upon by you.


This eToro trader boasts an average annual return of 27% since 2013, claiming that a $1,000 investment copying them from this early date would be worth more than $8,000 today. In order to do so, you have to set an amount that you want to invest. On the top of the “copy people” page you will find a search bar with filters. Using this, you can look for specific categories, for instance, investment products or percentages.

How to choose a trader to copy

Copy trading is a portfolio management service, provided by eToro Ltd., which is authorized and regulated by the Cyprus Securities and Exchange Commission. Performance chart is a visual representation https://xcritical.com/ of monthly returns a CopyTrader has generated so far. The early performance is calculated as a geometric sum of monthly performance i.e. by multiplying all the monthly returns.

They simply don’t hit the mark with their quality of traders. Margins are high, and while the platform is user-friendly; I think starters will struggle to make good investments if you follow eToro. Each social trading platform will offer different options for making deposits and withdrawals to and from your online trading account.

Average Trade Size

But if you did your homework, you would be at ease, waiting for the next trending move to show up. In this Trading 101 article, we take a deep dive into copy trading, its risks and benefits – and how to use copy trading to your advantage. The most economical way to deposit or withdraw money from the account is via USDT stablecoin using the TRC-20 protocol.

Unlike copy trading, mirror trading allows you to follow a specific trading strategy, often executed by algorithms. Firstly, you need to understand the trading system of the trader you want to copy. In recent years though, many crypto exchanges and other third-party platforms have started to offer automatic, real-time copy trading services.

Understand Their Strategy And Behaviour

For example, copy traders can profit from the market without having to spend much time on analysis. After you have found the trader to copy, everything else is automated. There are many different copy trading platforms available, for different kinds of markets. As we discussed, there are numerous strategies in copy trading. You can copy trend-following traders or choose to focus on range-bound environments.

How to choose a trader to copy

Rates, terms, products and services on third-party websites are subject to change without notice. This compensation should not be seen as an endorsement or recommendation by TradingBrokers.com, nor shall it bias our broker reviews. At the same time, it is preferable to systematically move away from traders who seem to have “slipped”, in terms of their trading strategy or psychology.

Trader Level

This is often done automatically, as plenty of EAs and autotrading bots allow you to link your own trades and investment amounts to the selected trader you copy from. When copy trading, your investments often also follow various guidelines set by the individual trader, including stop loss orders and take profit orders. Investigate their open trades as well – it should be available in the trader’s profile from your social trading platform provider.

How to choose a trader to copy

Win ratio or P&L ratio are also some of the filtering settings that the aspiring copiers could play with to find the lead trader that would suit their needs. Those traders who update followers with their movements, and why they’re making said movements, appear more trustworthy and transparent. “Beginners focus on analysis, but professionals operate in a three dimensional space. They are aware of trading psychology their own feelings and the mass psychology of the markets.”

How To Join A Copy Trading Platform?

You may plan to diversify your investment portfolio in the future so consider the product range as it could make it easier to expand your portfolio when the time is right to do so. This can include Forex, Commodities, Cryptocurrency, Stocks, Indices, Options, ETFs, CFDs and Futures. Being a social trading platform the community many times helps each other out by signalling their opinion about investors. The number of copiers a CopyTrader has is quite indicative of how much people trust them, especially if it is a long-term relationship that persisted over time.

Ideally, copy traders put together a “portfolio” of different traders to copy, so that they will always have a few successful ones running. Another way of increasing your chances of success is by copying multiple successful traders with different trading systems. After all, diversification makes you less dependent on market conditions. Yet, they do not have to spend time behind the screen, analysing any charts or assets.

How To Mitigate Copy Trading And Social Trading Risks

That said, returns over the past two years still total 20.98%. It is supposed to adapt the stock market to the technology of the 21st century. EToro has its own app that you can download from the App Store or Google Play Store. As with all experiences in life, copy trading receives mixed reviews, too. There are the ones that love copy trading and then there are those who dislike it. The issue with negative reviews is that people do not talk about the actual reason for their bad experiences.

Essentially, you already need to be a good trader yourself, before you would ever be able to really know which traders are solid, and which ones are not. Other considerations include the fees you are paying to the trader and the copy trading platform. We see a growing popularity in copy trading, which would not be happening if people were losing money. Nevertheless, copy trading — without a proper approach — can cost you dearly. In essence, it allows you to follow other traders into their trades, and profit if they are successful — usually at a fee.

They require a minimum of $600 to copy their trades and suggest a copy time of at least three years – although they note that all investing is inherent with risk. This trader also makes use of algorithms to inform their trading strategy, particularly in their approach to forex trading. After you applied one or more filters, eToro shows you the traders, their return and risks. You have the option to choose more selection criteria, such as performance, trading and advanced.

The last thing you want is a signal provider who panics and begins to change their way of doing things. Poor traders try to chase their losses by employing martingale kind of strategies or trading more frequently with the hopes of winning the profits back. On the other hand, professionals stick with their tried and tested systems. In turn, this would reduce the instant impact of losing money rapidly at once. By copying all trades, you’ll be invested in all of that traders’ open trades.

This includes pros, cons and an overall rating based on our findings. We aim to help you find the best broker according to your own needs. Copy trading does not take into consideration your personal financial circumstances or investment goals. You are effectively relying on a third party for trading decisions but absorbing full liability and responsibility in the case something was to go wrong. You should never trade money that you cannot afford to lose.

When choosing an OctaFX copy trader, you should look for the provider’s license and regulation. This way, you will know that the provider is regulated by CySEC and regulated by Acorn 2 Oak. You can also ask your provider to send you up to four free quotes to make sure they’re a good fit for your trading style. This simply means that some trades will end in a loss no matter what, so having the right mindset and reasonable expectations when copy trading is very important. Copy trading is definitely not a certainty or guaranteed profit. This means that their trades do not have to end up in profit every single time.

Now you are set to start searching for your ideal social trader to follow. More so, examine how they behave, especially during or after a bad run. When someone is winning, it is easy for them to stay calm and maintain communication since they speak for themselves. During a losing streak, however, that’s when a professional’s trader’s best qualities manifest. The site may also ask you a few questions about CFD trading and leverage to assess whether you’re ready to have access to these complex instruments.

You’ll also have to choose a platform that allows you to choose which trading activities to follow. Choosing the platform that allows you to copy trade will save you time and ensure that you follow the best trader. As always, we provide brutally honest advice on where to go to find the best copy traders to invest in. Always remember there are risks involved, however, and that no trading strategy is completely risk-free. But with our guidance, you can seize the right opportunities at the right time, with the right copied trader. You should understand that not all traders who offer their account to be copied is trading manually.