This is something that is very often asked: "Bli, is copy trading good?" , “Bli, does copy trading make a profit?”
Questions like this are actually normal to ask, because everyone of course wants to earn profits in various ways. There are those through trading, there are those through stacking, there are those through investment, there are those through airdrops, and there are also those who want to use copy trading.
However, before I answer regarding copy trading, let's first discuss the definition of what copy trading is. Copy trade is an investment method where an investor or trader chooses and copies or follows transactions carried out by professional traders or experienced traders. In this copy trading, there is no need to carry out market analysis or make your own trading decisions, but we only choose the trader we want to follow and copy every transaction made by that trader automatically.
Copy trading has actually been widely used by people in the stock market and Forex first, then gradually more and more people are implementing this in the crypto world, even exchanges like Binance have also facilitated this. If you want to summarize it easily and briefly, the essence of copy trading is following someone to make a profit.
Isn't it that simple? Just follow someone and enjoy the profit suddenly later on. Very delicious and delicious, right?
But reality is not like that, friends. The logic is like this, if copy trading is that profitable, shouldn't we all just participate in copy trading? If copy trading was that profitable, wouldn't we all be billionaires in this world? Not to belittle, but let's be fair and neutral first in the discussion.
There are several things that need to be considered before traders or investors start copy trading. The following are things that traders or investors should consider when choosing copy trading:
Platform used: This platform plays a vital role because without a good platform, there are possible security risks involved. Don't let us be lured by a very tempting but unreasonable campaign from a platform and end up being scammed.
Master Trade Performance: We also need to know the performance of the trade master or the person who heads the copy trade and their track record. Existing track records can include win rate, performance in 7 days, 1 month, and others.
Risk Management: this is also important to regulate, because it does not mean that by participating in copy trade you will definitely avoid risks. VERY WRONG ! Risk still exists and it is within our control regarding risk settings before we commit to copy trading.
These are several things that need to be considered in copy trade. Then how is it implemented at Binance itself? On Binance, you can enjoy the copy trading feature or check out the existing features in the following way:
Enter the Binance website or you can use this link: https://www.binance.com/en/copy-trading
You can see the master trades which can be sorted based on PNL, AUM, Ratio, and others
After you find a trade master that suits you, you can press the copy button and make settings in it following the instructions from the app.
The settings referred to here are the settings for existing money management. In short, in these settings you need to set the margin ratio that you want to include in copy trading activities, how to determine the TP, SL position, and other things which you can set in "Advanced Settings"
These are all the steps to be able to participate in copy trading on Binance. Then now we will get to the final question, namely, is there a profit from copy trading?
The answer is IT DEPENDS.
Yes, it depends on each person. It depends on the trader's goals and vision for the future. Here, let me explain further.
What are the goals and vision and mission intended to be achieved in the future? Is it just profit, or do you want to develop yourself by getting to know more about cryptocurrency in all aspects? Things like this need to be answered well, because it is your answer that determines whether you are more suitable for copy trading or private study.
There are several things that can be used to compare copy trade vs self-learn:
Copy trading :
Plus: easy to access, and easy to choose trade masters that perform well so you can be safer when placing money into them
Minus: not understanding the process of an open position action because it uses subjective considerations and decisions from the trade master. It's like direction and just accept that it's done in a copy trade.
Self-learn :
Minus: bloody in learning (yes bloody, it's not that easy to learn about technical analysis to open positions and it takes time to learn all this. I'll be honest about this first 👍)
Plus: you can make choices independently, you can be more expressive in deciding which positions you want to open and which you don't. There is free will in carrying out analysis and can personally target the growth targets you want to achieve
From the pluses and minuses that I just explained, there are quite significant differences in them and that is what differentiates the output that will be produced. If you want to put it another way, copy trading is like if we have a product we want to sell, but we entrust it to someone to sell it and let that person think about how to sell it, in essence we accept that we will get a profit later. Meanwhile, self-learning, we will find out how to do business to sell these products starting from product knowledge, marketing, customer service, and so on.
For those who want to learn more deeply by self-learning, you can visit my telegram channel, namely Billionaire Trader, by clicking this link: https://t.me/BillionaireTrader99.
Another thing you need to know and I think friends can learn from this is to be wary of scams. This is what I discussed earlier regarding security in copy trading by paying attention to the trade master, platform, and so on. This scam will be very common, especially in the bull market euphoria phase. A real example of this scam is in 2020 where many trading bots appeared that offer unreasonable profits, all we have to do is deposit money and we will enjoy these profits every month.
There are indeed quite a few differences between Bot Trading and Copy Trading, but it is very important for us to know first that a modus operandi like this can exist in any field. Some tips for doing a "filter" are:
Check the reputation of the platform and liquidity on the exchange
Check the performance of the master trade, and make sure to check the liquidity of the master trade AUM)
Don't put all your money in copy trades. Always diversify your investment actions
Hopefully everything can be useful for all of you!