Copy trading is one of the easiest and safest ways of making money on cryptocurrency. Read this article till the end to get to know how it works.
If you want to make money on trading but lack time and/or experience, you can try copy trading. It enables you to get passive income with minimum effort, thanks to following the deals of professional traders. From this article, you’ll get to know the essence and benefits of copy trading. After reading the text, you might be able to try this method too!
How Does Copy Trading Work?
You sign up for a copy trading platform or subscribe to a private trader — and you will automatically repeat every order they make. Each professional strives to maximize his profit, so your revenue will grow too. You’ll need to pay a fee to the platform or trader whom you follow. This fee is rather affordable and allows experienced traders to make extra money on their skills.
When choosing a trader you’d like to follow, you’ll get to know exhaustive information about him:
- Preferred assets
- Preferred strategies
- Overall profit
- Overall rating
- Other details
You’ll be able to make an informed decision and follow the professional whom you trust the most.
You won’t need to care about any technical aspects yourself. And you won’t need to fine-tune any complicated settings. For instance, when you use trading bots, you need to fully control them, which requires certain effort and expertise. In the case of copy trading, the process is very simple and fully automated.
If you wish, you’ll be able to carry out automated activities as well. For example, you can create stop loss and take profit orders. You’ll be able to diversify your portfolio and trade with several assets.
And the most important thing is that you’ll be the only person who has access to your funds. When you use a trading bot, you need to transfer your funds to it. Copy trading enables you to have full control over your money, which significantly minimizes your risks.
In Which Markets Can You Apply This Method?
You can benefit from copy trading on both the stock and crypto market. However, you might want to focus on the latter. The cryptocurrency market is rapidly growing and evolving. Compared to shares, this sphere is more flexible, more dynamic and offers more opportunities. It would be wise to make the most of it while it’s still volatile and keeps expanding.
The Benefits of Copy Trading
These are the main reasons why the popularity of copy trading has been steadily growing.
- You can start earning money immediately, even if you lack skills, knowledge or experience.
- You don’t need to stay glued to your computer 24/7.
- You can choose from different assets and trading strategies.
- At any moment, you can switch to a new strategy.
- You’ll have a right to make independent trades.
- Before you subscribe to a trader, you’ll be able to get exhaustive information about him.
- You’ll be able to trade using only some part of your savings and you won’t need to put all eggs in one basket.
- You can analyze all the deals that the pro trader makes and learn. Later on, you’ll be able to use this data for independent trading.
This method is ideal for investors who have full-time jobs and balance them with private life.
The Shortcomings of Crypto Trading
This method has probably only three disadvantages.
- You might want to avoid copy trading if you want to learn to trade independently as soon as possible.
- You should be ready to pay a fee to the platform or trader.
- The trader who you follow might make mistakes occasionally and incur losses. But if you trade yourself, you might make even more mistakes. You can be sure that a professional will try to quickly make up for any blunder and make a profit for both him/her and you.
As you see, the pros of copy trading are much more numerous and meaningful than cons.
Hopefully, this information came in handy and now you better understand the essence and benefits of copy trading. On the Internet, you can find many platforms where you can follow experienced crypto traders with minimum effort. Choose a reliable one, register there and start making a profit right now!