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

The trading history presented is less than 5 complete years and may not suffice as a basis for an investment decision. Here you will see all the pro-traders, and you can pick a trader to copy based on their performance and statistics. Phemex is a well-known exchange case from Singapore that offers a copy-trading feature. The biggest drawback of this trading method is that you have to mirror everything. To learn about copy trading, one of the most important things to be informed about the actual process of copy trading.

• The return of social trading is not made in cash but will likely result in a better trading performance overall.
• There are two major ways in which copy trading can be a social activity.
• All forms of trading come with their own risks and rewards, and this is important to know when learning what is copy trading in crypto.
• And since everything is automated, the entire process saves you time and effort as well as increases the likelihood of a positive return on your investment.
• Depending on the crypto copy trading platform that you’ve chosen, you should have access to a full range of statistics and metrics.

Choosing the best copy trading platform can often mean the difference between short- and long-term success and dashed hopes. After all, social trading has continued to surge in popularity and with good reason. If people weren’t making money from it, then people wouldn’t continue to do it. Besides, it allows you to jumpstart your trading journey as a beginner, potentially gaining profits and generating a passive income without participating in trades directly.

CoinEx Exchange Suspects $27 Million Cryptocurrency Hack

Some of the best crypto copy trading bots are 3Commas, Cryptohopper, and WunderTrading. Remember, crypto markets are very risky and unpredictable, and even the best traders can lose money or make mistakes. You should be ready for ups and downs and have a plan to manage your risk. Another thing to consider is the copy trading features of the platform. Look for features that let you choose different traders to copy, change copy ratios, and set stop-loss limits. You don’t want to lose your money or your personal data to hackers or scammers.

• On these platforms, seasoned traders suggest which crypto assets they should buy or sell.
• It is worth keeping this in mind when you start copy trading yourself, as even the most well-versed crypto trader will still have knowledge gaps.
• In some ways, this is true– it is simple to follow the trades of another as it relinquishes you of some of the decision-making processes.
• So, if you feel that a trading move is not right, you can opt-out anytime.
• It offers outstanding online trading services to retail clients.

Coinmatics copy trading service allows copying deals made by traders and trading bots, as well as receive signals from verified strategies. FXTM is a global network and has more than two million clients from 150 countries. It offers outstanding online trading services to retail clients.

Social Trading Community

Another advantage of this method is that technical analysis strategies can be applied to any number of assets. This type of trading provides less flexibility than social trading, as you are expected to follow the strategy blindly. The only choice you have is what strategy to use and when to stop using it if you do not like it. The process of copying another trader’s trades is known as “copy trading.” Instead of replicating a strategy, you replicate every action of the trader you have chosen to emulate. Manual copying can be accomplished by making the same trades as the chosen trader. One might question how they will be able to get insights into the performance of various traders.

• Discover the ins and outs of this crypto exchange in our comprehensive guide.
• It liberates you from the tedious process of continually analyzing price charts and following market trends.
• For example, the markets are constantly evolving, which may result in the algorithm running on outdated assumptions.
• A trader needs to keep monitoring the cryptocurrency trading process and exit their position if they feel they are generating continual losses.
• Yes, copying cryptocurrency trades is legal in most countries where cryptocurrency is allowed.
• With this tool, you can copy trades and only pay trading fees when profits are made.

After filtering and selecting the trader that focuses on your preferred assets, you may check out more detailed stats on their profile. You may see how many are already following and copying their positions. These algorithms have been built and perfected to execute trades based on many different inputs, and process these inputs way faster than any human will ever be able to.

Copy Trading Strategy

After all, trading platforms generally offer educational content that helps you grow as a trader. Crypto copy trading is similar to social trading or mirror trading. It can be done manually or automatically, but automatic is better. With crypto copy trading, you use software that copies the trades of expert traders automatically. Algorithms of the trading platforms are designed to automatically copy the trade of the lead investors. However, one is in total control of trading and can overrule the software anytime.

• However, too much transparency may lead to losses for the platform, as followers may be able to employ certain techniques to avoid paying following fees.
• You can earn returns in your portfolio without having to invest hours researching the market.
• With copy trading, you’re always in control.You can decide to unfollow the trading strategy whenever you decide that copying someone no longer makes sense financially.

Another risk of using crypto copy trading apps is they may experience a system outage or cyberattack at any time. It means your assets will depend on the performance and security of the software. Portfolio diversification is another plus point of copying trades.

Is Copy Trading Profitable?

FXTM provides excellent educational resources for new traders, including live webinars, local seminars and videos, tutorials, and a demo account — all free of charge. FXTM offers clients the MetaTrader 4/5 (MT4&5) platform support. – This gives traders a familiar, sophisticated trading interface they can use immediately. This broker platform is able to meet your needs, regardless of whether you are a forex trader newbie or an experienced trader.

• Phemex is a crypto exchange from Singapore that lets you trade over 272 crypto pairs with spot and contract trading.
• By following successful traders who have consistently achieved positive results, there is a possibility of earning significant returns on investment.
• EToro is a multi-asset platform that offers both investing in stocks and crypto assets, as well as trading CFDs.
• Essentially, it enables individuals to copy the trading strategies of successful traders within the crypto market.
• Copy trading is safe, but if the trader opens a bad trade, your account will replicate that trade, and you might lose your funds.

We were looking for a place to support our strategy, and be able to share it, and we found it. The performances are excellent, the interface very intuitive and fast. Definitely something I’ll be watching closely as the platform is developing well, the base idea is great, and the system is efficient too.

Potential Drawbacks of Crypto Copy Trading

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

• You should begin trading after gaining some market knowledge and accumulating some capital.
• It allows investors with existing brokerage accounts to link a new account via their existing broker easily.
• BingX lets you follow and copy the best traders in the crypto space, who know how to make money even when the market is down.
• Additionally, for individuals new to cryptocurrency, it offers an opportunity to learn from experienced traders and gain valuable insights into market trends and strategies.
• With just a few taps in the Marketplace’s mobile app, investors can easily leverage the expertise of professionals by renting the most trusted bots on the market.

In that case, you might choose to mirror Warren Buffett’s investment style. You may not necessarily buy every investment he does or every investment he recommends. But you’d base your investing decisions on the same principles he follows. You should also look at what you want to do with your portfolio.

Gate.io: Best for social trading and community engagement

Bybit currently supports up to 15 trading pairs, including BIT/USDT, ETH/USDT, XRP/USDT, and a number of other highly liquid pairs. You could potentially make money by copying another trader’s skills and experience. As a result, it is ideal for beginners because they do not need to fully comprehend the market.

• Oftentimes traders can feel isolated and alone as staring at a screen with charts and numbers can feel very secluded.
• Now that we’ve explored the risks and rewards of copy trading in the crypto market, let’s delve deeper into optimizing the risk-reward ratio to make the most out of this investment strategy.
• The crypto space has only existed for a handful of years, and so everybody is still trying to grasp how it functions in terms of technical analysis.

Please pay attention that your country of residence may prohibit your participation in copy trading or holding crypto assets, then it will be illegal personally for you. So, we advise checking with your local regulator if you are eligible to hold crypto assets, trade them, or use copy trading facilities. Currently, it’s not allowed to configure auto trading bots at our platform. This functionality is planned to be released in the nearest future. But you can share your bot based trading strategy at Coinmatics right now.

The Trality Wallet—perfect for trading crypto

However, many newcomers tend to feel the most comfortable doing simple spot trading. Understanding what is copy trading in crypto, and best practices on how to copy trade crypto in 2023. Multi-strategy bots utilize different trading styles depending on the market conditions. They can be considered a multi-tool, rather than specifically requiring certain market conditions. 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. Sure, success is a wonderful thing, especially when you’re piggybacking off of someone who has done the heavy lifting for you.

For example, if you invest conservatively then you’d copy someone with a conservative trading bent. Likewise, if you’re a growth investor then you shouldn’t match the trading activity of a value investor. PrimeXBT is a copy trading platform that allows traders of all experience levels; from experienced to novices alike. It helps Professional traders to monetize their skills by allowing others to copy their strategies.

Everything You Need to Know About Crypto Copy Trading

It has many features that help you make money with crypto, like earning interest, staking in launch pools, and prediction markets. It has many features for traders, like spot, margin, futures, options, staking, lending, savings, and more. It supports more than 350 crypto assets with a trading fee of 0.1% per trade. Bybit is a platform where you can follow the best crypto traders in the world and copy their strategies automatically. You can also share your own trades and earn money from your followers if you are a good trader.

Copy trading should only be done through a trusted source, and we highlight one of the best crypto trading platforms below. Crypto copy trading is an easy way for beginners to get started with trading. You can do it through AI-based self-executing software and follow the right trader and platform to gain profits. Afterward, – you can customize the trading procedure according to your funds and preferences. There is no easy answer to how much money you can make from copy trading. It depends on many things, like how well the traders you follow do, how much money you invest, how much you pay in fees and commissions, and how the market moves.