It was strictly against the rules in school. But copying from someone more knowledgeable than you when you’re trading online isn’t only allowed, it’s encouraged.
With a flurry of available copy trading apps, and more traders joining, it’s easy to see that copy trading has become more and more popular over the past few years.
But how? For those who are unfamiliar with copy trading, here are a few reasons why copy trading is catching on.
Practice Smarter, Not Harder
First-time skydivers connect to a more experienced pro when they jump out of an airplane for the first time. New traders choose to copy trade for a very similar reason. It takes a lot of the risk out of the experience. It’s also an easy way to learn the ropes. All you have to do is follow a more experienced trader and copy their moves. By doing that you can potentially profit from their strategies, while also avoiding costly amateur blunders.
Learn Quickly and More Easily
To become a profitable trader you need to understand the markets, and how they move. That can take time, and not every trader can devote several hours every day to learning. By copy trading, traders who have more experience make trading decisions for you, until you’re able to develop your own strategies. The technology is smart, slick, and user-friendly, making copy trading a practical way of quickly learning how to trade.
Diversify Your Portfolio and Grow Your Returns
Traders use copy trading to venture out into new markets by following and copying from traders with more experience in those markets. By broadening their trading horizons even more experienced traders can learn by copy trading. It’s a great way to diversify a trading portfolio without taking on a lot of risks. And as traders become more seasoned, they benefit through copy trading by sharing their trading successful strategies and growing their network.
How to Start Copy Trading
To start copy trading, you need to create an account with your chosen broker and download their copy trading app.
Once you’re logged in to the app, you can browse through the trader’s performance data and strategies, and choose one who has a good track record of consistent profits.
Once you’ve chosen your trader, you can set the amount you’re willing to invest. It’s always a better idea to start with a small portion of your income and increase it as you become a more savvy trader.
Lastly, observe! Analyze what other traders are buying and selling. Both novice and seasoned traders can benefit by watching what other traders are doing.