Copy trading is not entirely a new trading technique. It has been around on the forex market since 2005. However, it can be a difficult or daunting concept for beginners. This trading concept revolves around following or learning from the success stories of expert traders. And this Cryptocurrency Copy Trading Guide will help exactly with that.
Like you would naturally learn from your mistakes and avoid repeating the same mistakes next time, your success can also motivate you to keep winning. The cryptocurrency copy trading technique works with this principle.
In this Cryptocurrency Copy Trading Guide, we will walk you through how cryptocurrency copy trading works, the benefits of this trading technique, and the disadvantages of using crypto copy trading.
How Copy Trading Works?
The logic behind cryptocurrency copy trading is very simple. A part of your crypto portfolio would be linked to the portfolio of the trader you intend to copy from on an exchange. If the expert trader makes a profit, you automatically make a profit too.
On the other hand, if the market moves against the expert trader, it means you will also suffer the same fate as the expert trader.
Copy Trading Advantages
There is a wide range of benefits to using the copy trading technique. Some of the benefits include:
Helpful for newbies: As a beginner, it can be overwhelming to research the market and build up a trading strategy. But with the copy trading technique, all you need is to copy the trading strategies of an expert trader and apply the same without much hassles.
Officially recognized: Major regulatory requirements like MiFID, ESMA, CySEC, and the FCA now recognize copy trading as a legitimate trading technique for traders. However, before you apply any copy trading strategies, ensure you do so on a reputable exchange.
Free up time: In the busy and dynamic world that we find ourselves in, having free time to explore other opportunities is a no-brainer. Instead of sitting all day in front of your computer researching market trends and price movements, copy trading will save you that time.
Portfolio Diversification: As a crypto trader, there is nothing wrong with you diversifying your portfolio. You have enough time to add other financial instruments like commodities, indices, gold, and pure metals to your portfolio.
Copy Trading Disadvantages
As with any trading strategy, there are some inherent risks of “copying” other traders’ trading strategies. Let’s take a look at some of them in this Cryptocurrency Copy Trading Guide:
Risk: You need to understand that not every time that the best trader will win in a trade. In other words, there are times the market will move against the traders you copied from. In such a situation, you and the pro trader will lose money.
Control: With copy trading, you do not have any control over your investment portfolio. In fact, your portfolio is in the hands of a total stranger.
Not Available For US traders: If you live in the US, you may not enjoy copy trading service, as the Dodd-Frank Act clearly frowns against lenders who protect customers from abuse. This suggests that copy trading may be involved in the restriction.
Costs: Copy trading is NOT free. You have to pay a fee to exchange before you can copy an expert’s trading strategies. Sometimes, the fees may ‘eat’ deep into your profit. Despite the above risk factors, the gains of copy trading outweigh the disadvantages.
Still don’t know how to go about cryptocurrency copy trading? Then let the team at Altcenter Signals give you a helping hand. Altcenter Signals is a leading cryptocurrency and forex signal provider. Compared to other signal providers, Altcenter Signals provides safe trading and high accuracy, up to 80% of accuracy.
Here is our full package – what we offer:
We provide high-quality trading signals for all levels of crypto traders, including novice traders. Once you join our Telegram channel via @AltsCenter, you will receive daily trading signals. Further details can be found on our website.
These signals contain vital information about what coin pairs to trade to make the most profits when to place a buy order, when to close a trade position, where to set stop loss, and when to exit the market so that you won’t lose your hard-earned money. Our signals are easy to understand, plus they come with the best risk management strategies.
Indicators are generally used to track the market direction, trend directions, price movement, and much more. With an indicator, you can easily predict the coins or currency pairs that are viable. At Altcenter Signals, we have it help you to set stop losses and take profits in real-time.
3. API Bot
As with trading indicators, we also have an API bot that can help you trade the market devoid of human emotions and second-guessing. In fact, with a trading indicator handy, you can automate your trades and make the most profits without lifting a finger. All you have to do is to pre-program the bot and go to sleep while the bot does what it knows how to do best. You can join VIP now or join our Telegram channel to receive free signals for crypto and forex.
As a beginner, before you apply any “copied” trading strategies, ensure you master how the crypto works. At best, you can use a demo account to learn the nitty-gritty of the market.
In the crypto market, there are two categories of investors or traders. The first category of traders are those who fend for themselves by conducting their research, monitor trends, gather insight on effective trading strategies, and build their trading skills.
The second category of traders is those who only focus on making profits without committing much time and effort. The concept of copy trading is attractive to the latter category of traders. They simply rely on expert traders, like those in the first category, to build their investment portfolios. They “copy” the trading strategies of expert traders and deploy their own inherent knowledge to open/close a trading position for maximum profits.
However, both the first and second categories of traders still use copy trading to optimize their profits. Copy-trading helps traders to trade confidently and comfortably without the fear of losing their hard-earned money.