Exchanges have turned copy trading into a social network by allowing traders to create profiles and connect with other people. You can chat with traders, share ideas, discuss trading setups and see their daily, weekly, monthly and yearly performance.
Once you follow someone and copy their trades, the process goes like this:
Trader A buys 5 $BTC for $65,000
You buy BTC for $65,000 with X capital
Trader A sells 5 BTC at $70,000
You sell X BTC at $70,000 and make a profit of 10.2%
Or, you could lose 10.2% if the trader makes a mistake and the trade fails. However, think about it, has the trader made a mistake or have you made a mistake yourself by following the wrong trader?
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How to Choose the Right Trader
Check the Trader's background
âąWhat is their track record?
âąHow long have they been trading?
âąWhat is their win/loss ratio?
âąIs this their first time trading publicly?
âąWhat assets do they tend to invest in?
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Is Copy Trading a Good Choice for Beginners?
If you are new to trading and crypto, this extra time will be very useful for you. You will be able to learn new concepts without feeling overwhelmed and slowly integrate into the crypto community. In addition, your risks will be minimized because there is always someone to help you during your trip
