Copy trading cryptos is a practice allowing amateur traders to speculate by copying the actions of more experienced ones. They can thus earn money and improve their strategies. However, it is important to note that copy trading can be risky, as past performance does not guarantee future results. Find out what it takes to understand this system.
What is crypto copy trading?
Cryptocurrency copy trading is an automated method of copying the trading decisions of an experienced trader to earn profits in cryptocurrency without spending a lot of time on research or mastering trading.
The software mimics the buying and selling decisions made by the expert trader, allowing novice traders to use their expertise and develop their own skills. There are also social crypto trading platforms, where experienced traders give advice on the best postures to adopt, but this remains manual and therefore less reliable.
How does crypto copy trading work?
To perform crypto copy trading, it is important to follow some steps.
Find a good trader
The first step to getting started in copy trading is to choose a good trader. The results of your copy trading will depend mainly on the skills of the latter. You must take into account parameters such as the profitability of the transactions carried out, the amount of funds managed and the level of risk to make your choice.
Once you’ve found your trader, it’s time to choose the trading software you’ll set up to track them. It is important to note that even after setting up the software to invest like a trader, you can later change it to follow another.
Similarly, it is possible to modify the data configured at will to adapt them according to market variations or your situation. You even have the option of designating a main trader and following several others at the same time.
You should know that if the algorithms of the trading platforms are designed to automatically copy the trade of the main investors, this does not prevent them from intervening. Thus, you can always apply various control settings to pause or close a position regardless of the actions of the trader.
Is crypto copy trading legal?
Although it may give the impression of being illegitimate, crypto copy trading has been around for years and is recognized by many international bodies. However, it is important to take into account the regulations in force concerning its practice in your country before you start.
Also, do not forget that the practice presents many risks that we must be wary of. Better crypto account and risk management is needed to fare well in this area.
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