An online trading platform, Copy Trading allows you to follow the exact trades of experts with the click of a button. As soon as they make their trades, so do you. This allows you to trade online without actually knowing how to trade yourself; however, it’s important to know what you’re getting into before diving in head first, so let’s break down the pros and cons of this innovative way to trade securities online.
When to Copy Trade
Copy trading is a great option if you’re relatively new to foreign exchange, as well as if you have a hectic schedule that doesn’t allow much time to research and analyze currencies. The price charts of currency pairs tend to move in predictable patterns, which means that traders can use these patterns to identify buying opportunities. As a beginning trader, it’s important to wait until a clear pattern has emerged before deciding when to place an order.
What Are the Benefits of Copy Trading
While copy trading might seem daunting to some, it’s fairly straightforward and can save both novice traders and experienced investors a lot of time and money. For example, copying another trader allows you to copy their investment strategy without having to make all of your own trading decisions. In addition, it may be less risky than trying to trade on your own; when you start making trades on your own based on other traders’ performance, you have less at stake if things go awry—you just lost a portion of what was given to you by someone else! Copy trading is also particularly useful for beginning investors or those who want an easy way into investing without putting any capital out themselves.
Pros and Cons of Copy Trading
When it comes to Copy Trading, you’ll have a ton of options available to you. These exchanges will range from your standard brokerage firms to even more niche players like private traders. You’ll also notice that there are two different ways to go about Copy Trading: copying someone’s actual trades or mimicking their portfolio allocation. The biggest difference between them is how much freedom you have. If you opt for a straight copy, then you won’t be able to stray too far away from your mentor—you’ll want to make sure you don’t accidentally deviate into an investment they haven’t made yet.
A step-by-step guide on how to copy trade
The easiest way to dive into Copy Trading is by setting up a demo account, which allows you to experiment with it before depositing any money. Think of it as if you were learning how to swim; if you don’t actually go into a pool (or use a demo account), there’s no way you’ll know whether or not you’re getting in over your head! You can learn more about Copy Trading on our Demo Account page.