Covid-19 has introduced a new normal for many people who were used to busy working life. The transition bares good deeds for the stock trading markets. New traders and investors wish to try their financial luck and probably make it a full-time business. In the past few months (2020-21), the trade market (cryptocurrency market) has registered huge investors. This has created new investment apps to absorb the growing numbers. The apps offer a variety of perks, including zero fees and fast returns.
However, trading and investing in cryptocurrencies is a risk or gain business. There are several things you need to learn, such as:
- The crypto trading platform to invest in.
- The cryptocurrency wallet and the amount to start investing in the market.
- Type of trading to undertake (day trading, active trading, swing trading and more).
The majority of trading platforms offer knowledgeable demos to help new beginners venturing into the field. Beginners can check for reviews such as eToro review to learn and master some trade tactics.
The market is quite fair and offers new trading skills like copy trading. A significant trading feature for new investors and traders. It’s an excellent way to pass trading knowledge and skill to newcomers. Copy-trading or social trading is trading through mimicking other traders or investors. You copy professional trader/investors trading activities to gain profits and also learn.
First, establish the crypto trading platform you wish to invest in. Next, you need to select a professional trader who you’re to copy. The process will automatically commence when your trader executes a trade. The trade is more shadow trading. Any activity happening on the trader’s side will also happen on your trading account.
The internet offers many copy trading platforms but with different terms and conditions. It’s advisable to check the perks offered before venturing into any investment app. There are free and premium markets. The free allows any trader to register and start trading without paying any fee. The premium or paid trading platform requires the applicant to subscribe at a specified fee. The market is also limited to particular traders. There is another advanced trading platform that specifies the trading amount. The trader or investor needs to upgrade and reach the said level to trade without limitations. Each investment app/platform has its pro and cons. Ensure to research each app to avoid trading frustrations.
Benefits of copy trading
Copy trading is not limited to new traders but also experienced investors who want to make profits. The field always has something new to offer for everyone. Though trading doesn’t guarantee constant profits, it’s a great financial hub to invest your funds. Copy trading is beneficial in the following ways:
- The trade saves time and helps create profits.
- Copy-trading acts as market research programs since you gain through someone else who knows the market.
- It provides knowledge and strategies in the crypto market.
Risks of copy trading
- Market risk
The risk applies if there are changes in the prices of an asset. Also, if the trader you are copying starts to make losses, your account will get losses too.
- Systematic risk
Crypto trading is more prone to systematic risk than any other trading. This type of risk happens when the trader’s funds are locked up and cannot be withdrawn. However, the risk experienced in the past where some countries would lock and restrict investors or traders from exiting.
- Liquidity risk
Success strategies in Copy trading
The copy trading strategy has attracted many investment platforms and trade brokers. You need to learn and understand the market before investing.
- Paper and virtual trading
Stock trading/crypto trading is a volatile market that can cause great loss or profits. Never invest fully while you’re still green in the field. Though copy trading doesn’t require efforts, you need to learn few tricks. First, read about the trade and know about several platforms and how they operate. After reading, go virtual/online and invest small or the least capital. At this point, you’re investing not for profits but learning about the market once you understand the business, increase the capital gradually and aim for profits.
- Trustworthy investment app or platform
The investment platform is mushrooming every day. It’s challenging to get a genuine platform to invest your capital. However, you need to research the terms and conditions, accessibility, transparency and accountability. The company should be regulated for you to invest your funds.
- Suitable broker
Crypto trading or any other trading allows brokers to trade on behalf of the trader or investor. However, for a better copy trading experience. The broker should have experience in trading. He/she should have the same profit goals, resilient, knowledgeable.
- Account follow up
In copy trading, much work is conducted by an experienced trader. However, this doesn’t mean you relax and wait for the profits. Ensure to follow up with your account; the trader’s skill might change, affecting the profits. You can change and copy trade with a different investor, always check the progress and make changes where needed.
How to copy trade
- First, establish the crypto trading platform to use.
- Please read and understand their term and conditions.
- Next, sign up and create an exchange account using API.
- Research on the professional traders in the platform.
- Identify your preferred trader and follow him/her (ensure they are consistent).
- Now you can follow the progress of your account and make crypto profits.
Cryptocurrency trading is risky (volatile) and very profitable. The field requires resilience and fast character. To learn when to make profits or withdraw to avoid loss. This also requires consistency and practice to make constant profits. Ensure to get knowledge in every activity; note the trading market is risky, especially if you have less knowledge. Social trading/copy trading is the best form of creating money for beginners. It offers a wide scope of possibilities since you trader can venture into different fields.