Copy trading. What is it and how does copying traders trades work?
Copy trading allows you to copy trades in real time that are made by other, often more experienced traders.
The idea is to find an investor with a proven reputation and a profitable strategy, and then repeat the operations after him.
This makes it possible to make a profit without having either expert skills or extensive knowledge of financial markets.
The most attractive advantage of copy trading is its simplicity. When you copy transactions, your activity becomes literally automated.
In addition to saving time, the user can also trade in unfamiliar markets. Such diversification allows you to distribute a portfolio of assets among numerous experienced traders and, if suddenly one shows poor results, compensate for losses at the expense of the profitability of the other.
Important: copy trading does not guarantee profit and at the same time there is a risk of losing funds. It is important to choose a trader carefully, observe a competent asset allocation and not risk all the money.
Hidden Pitfalls of Copy Trading on Crypto Exchanges
For example, you have $1,000 in your account. You connect to a trader and he loses $100 today. Your balance becomes $900. The next day, the trader earns $50, your balance is $950. Everything seems to be in order? But this is where the fun begins.
Of this $50 profit, the trader takes his share, say, 30%. In total, you have $35 of the $50 earned, and your total balance is $935. No one cares that your balance decreased by $100 yesterday. When a trade makes a profit, the trader immediately takes his part, even if your total balance is still in the red compared to the beginning.
💡 An alternative for smart traders
If you are a trader or want to become one, I recommend paying attention to the website Copytrader.pw
A system has been developed here that really takes into account the initial balance. This means that you will be able to earn both as a trader with paid subscriptions and as a user by choosing a good trader without losing on commissions with a total loss.
📲 Conclusion
Diving into the world of copy trading, it is important to understand all the nuances and pitfalls in order not to become a victim of unscrupulous systems.
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