What is Copy Trading in Crypto? How to do Copy Trading

Now there is no end to the number of platforms that offer copy trading (social trading), but like always I will make your search easier by suggesting only the best copy trading platforms. So buckle up to learn something new and start earning from trading even when you have no prior experience in – trading. You’re leaving the hard work of choosing investments up to someone else. You can earn returns in your portfolio without having to invest hours researching the market. Diversification and risk management are also done for since the pro trader is the one directing investment decisions.

For this reason, it is easy to assume that your success comes almost entirely from another person. Once you have picked your trader of choice, and set up either the API or the platform you are using, you will then start to see your trades sync up with your target! This is equal parts exciting and scary, but just remember that even when you copy-trade crypto, you are still the one in charge. If you want to disconnect yourself from somebody else, you can easily do that at any time, and reconnect with them in the future, too. After a standard KYC process, simply add funds to the Trality Wallet using a preferred funding method, whether by credit card, bank transfer, Apple Pay, or Google Pay. The first step involved in crypto copy trading is arguably the most important.

Bybit Copy Trading

So far, our discussion on what is copy trading in crypto has touched on the act of automating your copy trading habits, but let’s delve further into it now. As mentioned before, places like eToro have a dedicated platform for copy trading, which is simple and effective to do. But you can copy trade on other exchanges as well, even if they do not have a console created specifically for it. 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. This is unavoidable as those gaps are caused by a lack of historical data. However, it is not necessarily a bad thing, as sometimes, too much data can cloud judgment and lead to a false sense of security.

• It is advisable to conduct thorough research on the best available options in the market.
• You would have to become an expert at fundamental and technical analysis and follow the market trends and price movements.
• Through copy trading, they can simply find a top-performing trader specializing in Bitcoin and automatically replicate their trades.
• This is great news as it means you can freely choose whatever exchange you are most comfortable with, and that you enjoy trading on the most.
• This copy trading software automates buying and selling of crypto assets by mitigating the original trades of professional traders.

You can sort them by risk level, performance, portfolio composition, and more. You can also see their profiles, stats, risk scores, and trading history. It has millions of users from all over the world, a fast trading engine that executes trades smoothly, and a high level of security that protects your funds. The software will then track the trades of those traders and copy them into your account.

Trality’s Marketplace and index-tracking bots

Consider putting your settings, like stop-loss, take-profit, and maximum amount. With the feed feature, traders can now post their speculations on future trends and insights, thus encouraging interactions between copy traders. BingX’s copy trading system also supports DeFi, NFT, indices, commodities, forex, and Layer 2. In order to display traders’ performance in a more comprehensive way, BingX traders can now enrich their homepage by accessing another exchange’s API. Connect your account to the trader of your choice and sit back, waiting for results.

• For example, on eToro, you don’t pay extra for copy trading, but you still pay the normal fees for spreads and overnight fees.
• You can choose from more than 1000 assets, like real stocks, commodities, forex, indices, ETFs, and cryptocurrencies.
• To begin copy trading, you must first choose a reliable and trusted copy trading app.
• Do note that there is a feature called “Stop copying” which is similar to “Stop Loss” feature, and helps you save yourself when things go south.
• If you are more risk-averse than the trader you are following, you can limit the risk per trade.

For example, copy traders can profit from the market without having to spend much time on analysis. After you have found the trader to copy, everything else is automated. In addition to standard copy and social trading tools, Shrimpy has a rebalancing tool that allows you to automatically rebalance your portfolio according to your preferred risk/reward. Trading signals are messages alerting you to potential trading opportunities. Signal providers use various kinds of analysis to bring trades to their followers, sometimes even with a take profit target and stop loss. Signals are usually not copied automatically, but manually followed by the group members.

Step 4. Close the investments at any time

If the risks outweigh the potential rewards for your investment goals and risk tolerance, it might be wise to look for other traders who align better with your preferences. Part of learning what is copy trading in crypto is learning that copy traders can essentially function on any exchange, even ones without a dedicated dashboard or console. This is possible because the vast majority of exchanges, such as Binance, Kraken, and KuCoin, all have APIs that allow you to follow the actions of others through the use of code.

However, modern providers of copy trading services enable the process to be completely automated. In this case, all you have to do is decide which trader (or traders) to follow and how much of your account capital to allocate to that trader. While copy trading allows a trader to view the actions of lead traders, they don’t get to see the work behind the scenes that led them to make those moves.

Social Trading Community

Knowing the risks and reward potential can help you decide whether copy trading is a strategy you should adopt. Next, diversify your portfolio by copying multiple traders from different sectors within the cryptocurrency market. – This spreads the risk and reduces the impact of any single trader’s performance on your overall investment. Building a solid investment strategy is vital in maximizing the benefits of copy trading in cryptocurrency.

• You should be ready for ups and downs and have a plan to manage your risk.
• In addition to spot trading and derivatives, the global platform offers bridges, cloud services, mining, loans, and copy trading.
• When one decides to go for crypto copy trading, the first step is to identify the right trader.
• The platform brings together experienced principal traders and new traders to create a win-win cryptocurrency trading experience for all.

Copy trading is like having your own personal crypto mentor, guiding you through the ups and downs of the market. This website is using a security service to protect itself from online attacks. There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data.

Service

EToro is a platform where you can trade and invest in various kinds of financial instruments, including cryptocurrencies. It has over 20 million users around the world and it follows the rules of the FCA (UK), CySEC (Cyprus), and ASIC (Australia). Check and analyze their performance, risk level, and trading history before you copy them. If you want to copy the trades of other traders, you can sign up as a copy trader on OKX. You can choose from 340+ trading pairs and find the best traders to follow.

What should you know if you are planning to broadcast your own trades for others to copy? For starters, bear in mind that by opening yourself up to copy traders, you may feel a new level of responsibility for those following you. This can sometimes work, safe but remember that we are all fallible, and even the best traders can do a poor job of reading the room. This is why it is important to understand the fundamentals of what is copy trading in crypto as well as understand the conceptual elements.

Lack of information about the crypto copy trading strategy

There are reasons to use copy trading, and reasons to stick to trading on your own. Gate.io is a CEX that allows copy trading with high leverage, with over 1,400 cryptocurrencies listed on the platform. No matter the trading signal provider you want to follow, it is important to research them well, just like you would research a trader to copy. Hovering over any profile would give you more details about the traders, and this is useful to understand the trading style of a specific trader. 5% of the net earnings will be given to the initial strategy creator when the strategy closes.

• You can also adjust your risk and exposure levels on the platform, so you’re not completely reliant on the activity of another trader.
• Copy trading works by connecting an investor’s trading account to the account of the trader they wish to copy.
• It will use the same parameters like buying price, selling price, stop loss, leverage, etc.
• The fees for copy trading on Gate.io are the same as the normal trading fees for spot and futures markets, which depend on your VIP level and trading volume.
• Once you have identified a top-performing trader, whose strategies you want to copy.
• It is a part of social trading, where a copy trading platform automatically copies trades taken by the trader you are following.

Temporary losses can and will happen, but you shouldn’t decide to unfollow a trader prematurely because of fear, doubt, or uncertainty. Similarly, when copy trading crypto, take advantage of the power, consistency, and reliability of crypto trading bots. While you stand to profit by copying the trades of a successful trader, you’ll also sustain losses when the trader’s bot encounters a losing streak.

Trality’s Marketplace and reversion strategies

We will also give you some advice on how to start copy trading and what to consider when choosing a trader to follow. First off, you need to find a suitable platform that offers Copy Trading services. Try to select well-known Copy Trading providers with a long history, a solid track record, and preferably registration with at least one of the main regulators.

• Usually, it is experienced traders who are constantly generating more profit than losses.
• Be careful of platforms with high fees that may eat up your profits over time.
• Since then, the number of cryptocurrencies supported by the platform has continued to grow.
• However, it’s important to consider the potential risks involved, such as blindly following the wrong trader or experiencing slippage.

It also fits into the wider ethos around blockchain and cryptocurrency, where transparency is viewed in a positive light. Crypto has always been about pulling the curtain back and showing the world how to handle and manage money without hiding. Remember that some of the core elements of this industry surround the notion that the opaque nature of traditional finance makes it hard for individuals to partake. Both of these examples can be highly stressful for beginners and those who do not have a ton of cash to spare themselves. So, even if a well-regarded trader is doing this, it might not be smart for a beginner to follow them. Of course, if shorting and dealing with futures is your cup of tea, then, by all means, follow a trader who does this.

Are all the top cryptocurrency exchanges based in the United States?

You can copy trade a forex, CFDs or stock trader, or follow a crypto trader along his journey. EToro social trading is quite popular among beginners who are looking to start with copy trading feature. Pro-traders can share there trades from Binance or other supported exchanges (automatically using API), and investor can automatically copy those trade to make money. First, your success hinges on which investor’s movements you follow.

• This steep learning curve and the option for automation make the process of following and replicating traders easier and more convenient, which naturally makes it more appealing.
• This concludes our write-up on copy trading — its risks, benefits and history as well as strategies to use in copy trading.
• There are highly experienced traders who predominantly spot trade, so you could always seek one of these people out.
• Rather than following a specific trader, mirror traders imitate a strategy that could be created and used by any number of traders.
• In other words, it’s trading in financial markets with other people around the globe doing the trading for you.
• You can use their free plan if you trade for less than $1000 per month, or you can upgrade to their pro plan for $29 per month and get unlimited trading volume and all features.

This ensures that your balance remains under your total control. Moreover, our users are able to protect Coinmatics account with two-factor authentication. In 2014, eToro became the first trading platform to support cryptocurrencies when it added bitcoin (BTC) support.