What is Copy Trading in Crypto? A Helpful Guide for Novices

Both the expert trader and the follower trader benefit from the copy trading feature. In the case of the expert trader, he can gain followers, make a name for himself and also earn a commission for every successful – trade from his followers. As for those copying his trades — if the trades are successful, they make a passive income. This allows you to automatically copy traders and replicate their financial trades.

• You can close this investment and stop copying their traders at any time.
• Selecting the right software is as important as choosing the right cryptocurrency trader.
• Investors should exercise caution due to the volatile nature of cryptocurrencies themselves.

The presented trading history is less than 5 complete years and may not suffice as basis for investment decisions. If you absolve yourself from your own trading, then you can easily sleep-walk into disaster. If you want to be efficient, then you need to learn how to copy trade crypto intuitively. You need to learn about when you should follow one individual, and when you should switch things up and sync to somebody else.

Step 2. Select one trader to apply the copy trading strategy

You can use their free plan if you trade for less than $1000 per month, or you can upgrade to their pro plan for $29 per month and get unlimited trading volume and all features. Copy trading does not cost extra, but you may have to pay some fees to the exchange you use. The best part about copy trading on PrimeXBT is that you only pay a fee when your trader makes a profit. The fee is 20% of the profit and it is taken from your account automatically. Some of the popular bots are Grid Trading Bot, DCA Bot, Rebalancing Bot, and Leveraged Grid Bot. To start copy trading on Pionex, you need to follow some rules set by the traders you want to copy.

• They then buy the same number of the asset back at a lower price, return the shares to the lender, and profit from the rest.
• 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.
• This broker platform is able to meet your needs, regardless of whether you are a forex trader newbie or an experienced trader.
• You have to choose a secure platform and a profitable trader to follow.
• The above-discussed apps and software are top among all copy trading platforms available in the crypto market.
• Achieving a well-diversified portfolio is crucial in mitigating risks and maximizing returns.

This can be done manually, where you track another entity’s actions on your own, or automatically with the help of a dedicated platform or a bot. It is a strategy that allows investors to copy the trades of experienced and successful forex investors and implement the same trades, in almost real time, in their own accounts. Mirror trading was initially only available to institutional clients but has since been made available to retail investors through various means.

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Mirror trading still allows you to benefit from the expertise and knowledge of another investor. Instead, you apply a strategy that’s been successful for them to your own portfolio. Yes, copy trading is legal in most countries, provided that the broker itself is properly regulated. When investing in the financial markets using a regulated-broker and legalizes your account and the traders carried within them. However, all of these completely depend on your country that you are living in.

• Copy trading provides an excellent entry point into the world of crypto trading, whether you’re a complete beginner or someone with a bit of experience.
• We see a growing popularity in copy trading, which would not be happening if people were losing money.
• However, copy trading, like any other strategy, has drawbacks and risks.
• You can trade over 250 instruments and have access to a range of optimized accounts and platforms.

It’s essential to carefully consider the fee structure and weigh it against the potential returns you expect to make through copy trading. 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. On the other hand, performance fees are calculated based on a percentage of your profits. This means that if your chosen trader generates positive returns, they will receive a portion of those profits as compensation. Performance fees can incentivize traders to perform better and align their interests with yours as an investor. Another crucial aspect is monitoring and evaluating the performance of the traders you are copying.

What are the best crypto copy trading strategies?

Since its inception in the mid- to late-2000s, mirror trading has inspired other similar strategies, such as copy trading and social trading. EToro’s crypto copy trading platform is both unique and functional, with some of the industry’s most innovative social trading features. By following and copying the trades of successful traders, investors can benefit from their expertise and potentially earn profits. However, it’s important to remember that there are no guarantees in trading, and losses are also possible. And like many others, you are just a beginner in crypto trading.

• On the other hand, if your goal is to match the performance of the market rather than beat it, you might lean toward a professional investor who prefers an index strategy.
• It’s also essential to manage risk by setting stop-loss orders and monitoring one’s portfolio regularly.
• Copy trading allows investors to diversify by spreading their investments across multiple traders with different strategies, asset allocations, and risk tolerance levels.
• PrimeXBT is a crypto copy trading platforms that also offers stocks, forex and commodities trading, allowing crypto traders to explore other financial markets.
• Remember, crypto markets are very risky and unpredictable, and even the best traders can lose money or make mistakes.
• Both the expert trader and the follower trader benefit from the copy trading feature.

Most importantly, bot algorithms remain completely private, meaning that each creator retains full IP rights. Wasay Ali is a versatile professional writer with global experience and a background in mechanical engineering and social science. He is adept at crafting news and informational content for the crypto space and has experience writing for other niches. He has worked with several digital marketing agencies and clients in the US, UK, Pakistan, and Europe.

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All you need to do is sign up on the exchange, link your exchange account to Coinmatics with an API key, and pick a strategy from a trader. It’s your choice, you can start or stop copying whenever you want, pause it, and add or remove funds as you like. You can also talk to the traders you copy, discuss strategies and learn from their knowledge. Copying is free of charge, but you will still pay the 1% spreads and transaction fees. 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.

• If you don’t have enough experience trading cryptocurrency, it makes sense to copy their trades.
• However, you need to remember when selecting the traders to copy, you should know your trader’s position sizes they usually open, as this can impact your investment.
• By copying the trades of expert traders, investors hope to replicate their success and generate profits for their own portfolios.
• After you have set up your account, you can go to the “Marketplace” on 3Commas and find traders that you want to copy.
• That said, many users believe that KuCoin is one of the simpler exchanges on the current market.

However, they do offer a future leaderboard and it may have this feature enabled soon. You can click on any name to see more stats about their profile. You can further click on any profile to see their detailed stats which include performance over time, their existing portfolio. Once you have found the trader you wish to copy, simply click on copy and you would be asked to add the funds.

Bybit: Overall best crypto copy trading platform

Or they may be a big fan of shorting, which is where an investor borrows an asset and sells it with the expectation that the price will drop. They then buy the same number of the asset back at a lower price, return the shares to the lender, – and profit from the rest. Since it’s powered by Binance, the Trality Wallet is built on the industry’s safest and most secure custodial wallet infrastructure. Any and all funds deposited into the Trality Wallet are backed by Binance.

• AvaTrade was tested and found to be excellent for copy trading, competitive on mobile, and in line with industry standards for pricing and research.
• You need to consider many factors while selecting your copy trading software in India , USA or other countries.
• With this in mind, copy trading can become a way of forming tighter social bonds with other new and budding traders, where each user learns from the other’s successes and mistakes.
• When considering cryptocurrency exchange rankings, though, both of these types of businesses (exchanges and brokerages) are usually just thrown under the umbrella term – exchange.
• Learn about the best crypto copy trading platforms that allow you to replicate the strategies of successful traders.

Whenever the copied trader places a trade, the same trade is automatically replicated in the investor’s account. This allows the investor to mirror the trader’s strategy and benefit from their expertise. Blindly following the wrong trader can result in significant losses. Just because someone has a good track record in the past doesn’t mean they will continue to perform well in the future. Traders can also make mistakes, experience market volatility, or engage in fraudulent activities. Therefore, assessing a trader’s strategy, risk management practices, and overall performance is essential before deciding to copy their trades.

Trading 101: What Is Copy Trading?

In terms of legal status, copy trading of cryptocurrencies is legit. However, it comes with its own risks and limitations, just like any investment. One of the obvious risks is that while copying trades, you may also lose some as it’s part of trading. Copying trades is also a great way to familiarize yourself with cryptocurrency trading quickly. While observing and practicing others’ investment strategies, you comprehend them easily.

• Other considerations include the fees you are paying to the trader and the copy trading platform.
• Taking an active role is key in avoiding unnecessary risks and maximizing potential rewards.
• Investors can rent profitable bots tailored to specific risk tolerances (low, medium, and high) and individual investment goals.
• There is definitely a social side to copy trading, but never let it get in the way of the financial and economic side.

The best part; is everything is automated, and you will be acting like a hedge fund without the hassle of compliance and paper work. In conclusion, copy trading crypto provides practical benefits such as access to the expertise of experienced traders, diversification opportunities, and time-saving convenience. However, it should be approached with caution and complemented by proper research and risk management. By leveraging the advantages of copy trading while remaining informed and discerning, investors can potentially enhance their cryptocurrency investment journey. You can choose from more than 1000 assets, like real stocks, commodities, forex, indices, ETFs, and cryptocurrencies.

ommas: Best copy trading platform with trading bots

Though this software is automated, initially, you have to provide your input. Yes, crypto copy trading can be profitable, but it is not guaranteed. You have to choose a secure platform and a profitable trader to follow. They can help you trade automatically and make the most of market movements. Copy trading in cryptocurrency allows you to directly replicate the positions of another trader.

• 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.
• Since it’s powered by Binance, the Trality Wallet is built on the industry’s safest and most secure custodial wallet infrastructure.
• In addition, you should look at the intuitiveness of the app’s user interface, so you can easily manage your portfolio.
• Crypto copy trading is similar to social trading or mirror trading.
• 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.

So, by using the service of your copy trader, you will gain or lose proportionately. However, you need to remember when selecting the traders to copy, you should know your trader’s position sizes they usually open, as this can impact your investment. This usually happens automatically and without the requirement for any manual interventions. This copy trading platform also offers the FXTM Invest service for a minimum deposit of $100. For instance, let’s say you’re interested in copy trading Bitcoin and Ethereum.

Steps to Start Copy Trading

With this tool, you can copy trades and only pay trading fees when profits are made. This minimizes your costs, while maximizing your profits, according to the project. There are many different copy trading platforms available, for different kinds of markets. Other considerations include the fees you are paying to the trader and the copy trading platform. In essence, it allows you to follow other traders into their trades, and profit if they are successful — usually at a fee.

Because of the algorithmic nature of trading, it also runs 24/7 and is not affected by emotions. The community-sharing of ideas is a great way to improve your trading, legal boost your performance and to learn new things from like minded people. Exchanging different viewpoints will generate insights that you will never find on your own.