Copytrading is can be very helpful if you are the type of person who enjoys cutting and pasting solutions to problems in order to get things done in life.
Think of yourself as one of the lucky people who can get by with just using copy and paste for everything. You observe how the people who are already successful go about doing what you want to do, then you try to mimic what they do, and finally, once you’ve got the hang of it, you start putting your own spin on things.
Copytrading is a mechanism that serves to copy exactly the buying and selling strategies of successful crypto traders.
It is necessary to put one’s ego to the side and concentrate on gaining knowledge from the achievements of other people.
What exactly is meant by the term “Copytrading”?
Within a network, copytrading refers to the process of automatically replicating the open positions of one or more cryptocurrency traders by following their open positions.
In order to accomplish this, the trader who is copying the original investor will have his account linked to the original investor’s account.
Transactions such as purchasing or selling crypto currencies (long or short) are carried out simultaneously across both profiles as a result of this arrangement.
The person who is copying trades on a cryptocurrency exchange typically has the ability to halt the copied trades and take responsibility for managing them independently.
This indicates that you have the freedom to terminate any copytrading-based relationships that have been established according to your own preferences.
As a form of payment, original investors typically receive commissions (often a profit sharing from 3 to 8% of the winning trades) when their trades are replicated by other investors.
There are several platforms available for use by cryptocurrency exchanges, and each one makes use of a diverse set of trading options to make transactions possible.
Even if they make a full copy of a trade, traders on a number of copy trading platforms are still able to place stop loss orders, which enables them to maintain control over the amount of potential loss they are exposed to.
It is true that those who are just starting out in the world of trading may find this to be a little difficult, but the fact that this type of mechanics exists is a true reflection of why trading has seen an increase in interest over the past few years.
Copytrading is a well-liked choice for traders, and there is a sizable and lively community for those who wish to discuss relevant topics or get expert guidance.
How does copy trading actually take place?
Users are required to replicate the strategies using the selected platform’s automated copying system.
When a trader makes copy trades, a portion of his wallet is linked to the wallet of another trader, and all of the trades that the trader currently has open can be copied from one account to another.
Every action that occurs in the future will also be copied automatically.
Take, for instance, the way that copytrading is executed on Bitget, one of the most widely known online copytrading platforms:
Let’s pretend that the Trader A has been trading for a long time and has had a lot of success, and that there is a new trader who goes by the name of Trader B. Even though Trader B is inexperienced and does not have any trading strategies, he wants to invest his money in the market and not just buy cryptocurrencies with the expectation of making a profit by holding on to them.
Trader B have two choices:
- Making trades alone in the dark in the hope of turning a profit.
- Conducting some research on other trader strategies and start to copytrade them.
If I were Trader B, the option 2 is the one I would pick.
There are other considerations that you should give attention to, such as the diversification of your investments, the management of your finances, and the careful selection of a trader.
Although a trader is usually allowed to copy up to 20 other traders, on Bitget they are required to make a minimum investment of $10 for each trader they copy. When trader B makes the decision to copy trader A, any trade that A initiates in his account will also be initiated in trader B’s account once trader B has chosen to copy trader A.
Let’s say trader A has a balance of $1000 in his account and decides to make a $200 investment.
Let’s say for the sake of argument that trader B already has $200 set aside to the trader A; in that case, the identical charge will only amount to $40 on operator B’s account (20 percent of the equity). Whenever trader A closes a position, regardless of whether the trader made a profit or a loss, that position will also be closed on the copiers.
It can be summed up like this.
Is it alright to engage in Copytrading?
Copytrading carries its own unique set of dangers, just like the rest of the cryptocurrency trading industry.
Because of this, it is essential to get experience with it on well-established platforms that have a history of providing trustworthy results in the industry.
Trading on copytrading sites like Bitget or Bybit might not make you feel particularly safe at first, but you shouldn’t be too concerned about this because the majority of platforms offer a wide variety of security options. A good example of this is the “Copy Stop Loss” feature, which will prevent the copying of strategies once they have reached the maximum loss level that was previously established.
Copytrading without putting any money on the line is another strategy that’s recommended for beginners.
How? You can practise trading on certain platforms without putting any of your own money at risk by opening a demo account that lets you trade with free virtual currency.
In this way, you can practise without putting yourself in harm’s way until you have a firm grasp on how the system works.
What are sthe benefits and drawbacks of engaging in Copytrading?
Because it calls for only a basic level of expertise and prior experience, copy trading is an approach that makes it easy to enter the market for trading crypto assets.
You do not need to be a successful trader or analyse each and every market movement on a daily basis because the successful investor will do this for us.
Because of copytrading, you will be able to maintain the level-headedness of a seasoned trader even if you are just starting out in the market. In general, new traders let their emotions get the best of them.
Finding the right trader can be challenging because there are many different traders out there, each with their own unique approach and set of results.
You will have no say in the management of your investments; that decision will be made by the trader you select.
So you must be able to trust others and be proficient in the art of delegation.
Feel free to give Bitget copy trading feature a shot if you’re looking for a reliable copy trading platform to use in your trading. You will be able to follow traders and mimic their portfolios in an automated and uncomplicated manner if you make use of this function.
To learn more about how to copytrade on Bitget, I recommend reading the following article: