The trading industry is very volatile. It changes itself within a moment. Emerging crypto markets in the trading industry have changed the ways of trading. Investors sometimes make mistakes and these mistakes teach them a lesson to never repeat them again. A new term called Copy trading is arising in the trading industry which is writing many success stories. Copy-trading allows investors to achieve similar goals that a pro trader achieves.
Copy trading is emerging as a popular way of trading which is bringing a lot of benefits to the investors applying for it. Alpari CopyTrade is a big name in copy trading which allows investors to make a profit of $450 on every $1,000 investment. This post is for traders interested in copy trading.
Scroll down to know everything about copy trading.
What is Copy Trading?
As the name suggests, Copy Trading allows you to copy a trader. Whenever the copied trader makes a trade, your account also makes the trade automatically and in real time. A person can distribute funds to the trader. The trader further utilizes those funds for stock trading.
For example, when a copied trader uses 1% of their funds, your fund of one percent will also be allocated to the trader to make an investment. Copy-trading allows people to avoid any loss in trading. Investors can utilize the experience of pro traders to avoid failure.
How Copy Trading Works?
Mechanics of copy trading is very simple. When an investor copy a trader, all the trading portfolio is automatically copied with the portfolio of the experienced trader. The investors can see the copied content from their account. In the future, when the copied trader makes actions, all these actions also get copied in the investor’s account. The investors can select a sum of money to invest through the copied trader. In some cases, there is a limit of 20% sum investment.
For example, an investor has an account balance of $1,000 and he/she wants to open a trade by copying a trader. The investor analyses the trader stats before copying it. If the stats are found effective, then the investor invests ten percent of his whole sum or $100. Further when the trader makes a trade of $100 from his sum, then he automatically makes the trade.
Copy Trading Allows to Remove and Add Funds
Copy-trading gives you an option to not rely on a single trader. If you are happy with the dealing of a single trader, then you can increase your funds. This would allow the increase of copied funds in your account and make a successful trade through the trader. Increasing the funds also raises the risks of losing the big funds. It is better to not rely on a single trader. But if your trader’s performance is promising, then you can rely on the trader for a long interval of time. A better trader allows an investor to increase profit by investing more.
How to Select the Best Trader to Copy?
As copy trading allows the investors to rely on the experienced trader, it is better to select the best trader to copy. Only the best trader can execute your funds in the market safely. Once you find your trader safe and experienced, you can increase your funds. Below are some tips to select the best trader for the copy trading business.
- The first thing to do is to check the past record of 12 months of the trader in social trading. This will allow you to check the performance of the trader for the last one year when the market faced several ups and downs.
- It is better to select a trader that delivers 3% each month as compared to the trader that provides six winning months of 10%.
- See the graph of the trader and check for the signs of irregular spikes. The trader with irregular spikes could not be a trustworthy person. Look for the number of people who are following that trader with real money.
- Check for the reviews of the trader on social media. It would give you a brief idea for making a selection.
- The profile description and trading strategies of the trader should also be looked for a large benefit in the future. Also, clarify whether the trader is using automated trade signals or manual trade signals.