Regarding trading, there are many phrases you might want to enter that you might get invested in and be successful.
There is gold trading, forex trading, copy trading, and more. They all have one different goal but different ways to achieve it.
The ways you can be successful in trading are not accessible yet not complex, but if you strive for success, you will end up getting the goal you are looking for, you will end up successfully, and you will be going to earn a lot.
One of the phases of trading is copy trading which means that individuals in the financial markets can automatically copy positions made and managed by other individuals.
Unlike mirror trading, which allows traders to replicate specific methods, copy trading transfers a portion of the copying trader’s money to the copied investor’s account.
How Does Copy Trading Work?
The working of copy trading is relatively simple. It, in essence, is the act of replicating the trading positions of a chosen or experienced trader into a personal portfolio.
Here, investors are supposed to choose a preferred trader and start aligning their portfolio with them.
Nonetheless, traders are open to choosing the amount of money they are willing to invest.
Do You Know?: According to ZuluTrade, around 63% of the traders who copied someone’s trading strategies obtained profits between September 2021 and August 2022.
After completing the aforementioned process, you will need to agree to the terms and conditions of the copy trading platform.
At times, when master traders open a trade, eventually, it will be mirrored in their trading accounts.
Types of Assets You Can Copy Trade
There are numerous assets one can copy trade since it is possible to copy most of them because it depends on the brokers. Those assets are as follows:
- Cryptocurrencies: You can copy trade digital coins. For instance, Bitcoin, Ripple, and Ethereum.
- Commodities: Commodities refer to the assets like crude oil, copper, and wheat.
- Indices: Indices track multiple assets such as Dow Jones and Nasdaq 100.
- Forex: Forex is currency pairs like EUR/USD and GBP/USD.
Interesting Fact: Copy trading was initially started with a focus on the forex market.
- Stocks: Stocks refer to the shares of companies like Apple, Netflix, and Alphabet.
Pros and Cons of Copy Trading
Here are a few pros and cons of copy trading:
| Pros | Cons |
| There are chances that traders can benefit from someone else’s knowledge and expertise. | Here, a trader’s entire investment solely depends on someone else’s positions and returns. |
| Copy trading has the potential to diversify your returns. | Positions can be copied and there are ultimately chances of risks for the investors. |
| Concerning traders, it saves a lot of time, energy, and effort. This is because they are not supposed to commit to stock market movements and analysis. | In case, you are following an ace investor, it’s pretty obvious that you might face certain losses. The loss seems small to the investors but not to the trader, as each has its risk appetite. |
| There is low risk involved. | For copy trading, additional fees may be involved. |
| It permits you to make money for a longer period. | In case of loss, there is no one to blame but the trader. |
Most of the questions of all people are,+ “is copy trading a good idea?” and here is the answer to that question.
- Copy trading is for beginners, and it is a good trading phase when you are a beginner.
It helps you learn a lot and grow in the trading world that is why when you are a beginner, it is better to enter the world of copy trading so that there are lots of lessons and knowledge that you might know that you never knew existed and will help you in your trading journey.
- Copy-trading can save you in times of giving importance to time. Time management is the main focus of copy trading.
When you enter copy trading, it will help you learn a lot in a specific time, and a brief period, and of course, from time to time, you have the chance and possibility to earn and learn with the help of copy trading.
- This trading has a shallow kind of risk. It reduces risks that might help you succeed without facing challenging and complex risks.
It helps you be a successful trader without any troubles and problems in your trading.
It is forecast that the global online trading market will be increasing to an estimated 13.3 billion U.S. dollars in 2026. The growth will increase at a global compound annual growth rate of 6.4% per year
That is why most people are going for copy trading because it has an easy way to get successful, not like the other trading phases.
- When you are into copy trading, they will give you the chance to access the statistics, and you will be able to see what is going on in the marketplace and your trading.
Even, you will get to see if you are earning or losing, and it is a significant advantage for you as a trader.
There are many things you need to know and consider when you are trading, but copy trading is a good idea and a great investment to boost your income.
It will help you with your trading journey successfully without losing money and taking too much time, it is an easy process, but you will learn and earn in this trading.
If you are looking for the best guide for copy trading, there is the best copy trading app in Nigeria that might help you.
