First: Read the article carefully until the end. I am putting in your hands one of the platform’s keys to developing yourself from the financial side #BTC.
Second: I recommend that you enter the trading copy of a Muslim person who may trade in a legitimate Islamic manner.
Third: After you enter to copy the trading of the desired person, I advise you to set your own settings and always stay on instant trading.
Now let's go
My novice trader friend, copy trading on Binance has become one of the most attractive and exciting investment methods in the world of digital trading today. Imagine that you can benefit from the experience of senior traders and make profits without having to spend long hours analyzing and planning! Can you believe it? In this article, we will take you on a journey to explore how to copy trading on Binance step by step; so that you can achieve amazing profits intelligently and with the least possible effort; so if you are looking for a way to maximize your investment effectively; this article is your comprehensive guide to achieve this; follow us.
What is Binance Copy Trades?
Binance Copy Trading is an innovative service that aims to help novice investors in trading. This process allows new investors to copy the trades made by experienced investors, enabling them to benefit from their expertise without the need for deep learning or long experience in the market.
This service works by having the novice investor choose an experienced trader who has achieved consistent success in his trades. After choosing the appropriate trader, the novice sets up his account to automatically copy the trades of this trader; thus, this means that every purchase or sale made by the professional trader will be automatically reflected in the novice’s account with the same terms and criteria.
How are trades copied?
Copy trading on Binance is a system that allows traders to automatically replicate trades made by professional traders. It is worth noting that this approach can be especially useful for beginners or those who do not have the time or expertise to analyze the market themselves. So here is a detailed explanation of how this process works, step by step:
Selection of key traders
The first step to being able to copy Binance trades is to search for the main traders whose trades you want to copy. You can use multiple criteria to identify these traders, such as: past performance, trading volume, trading strategies, in addition to portfolio risks, copy fees, and number of followers.
It is worth noting that this comprehensive examination allows you to ensure that you are choosing competent traders and strategies that are compatible with your investment goals.
Linking copy accounts with master traders
After selecting your main traders, you need to link your account to their accounts. This is done through the Binance platform, where you specify the percentage of capital you want to allocate to each main trader. This setting allows you to allocate a certain percentage of your funds to track each trader based on your assessment of their performance and risk.
Enable automatic copying
Once the accounts are linked, the master traders' trades are automatically copied to your account. When the master trader opens or closes a trade, that trade is duplicated in your account at the same price and volume.
It is worth noting that you can adjust the copy settings to specify whether you want to copy all Binance trades or just some of them, which gives you some flexibility in managing copy trading.
Copy Capital Management
It is essential that you manage your capital carefully when using copy trading, as you should determine the amount of money you are willing to allocate to each master trader, and set the maximum risk limits you can take.
It is worth noting that stop loss orders can be used to reduce the risk of loss in each trade, which contributes to better protecting your capital.
Tips for Getting the Most Out of Copy Trading
In order to get the most out of copy trading on Binance, try following these instructions:
Research and Analysis: Before selecting your top traders, conduct thorough research and analysis of their performance and strategies to ensure that you are following highly efficient traders.
Diversify your investments: Do not put all your money in copying one trader, try to diversify your investments between several traders; to reduce risks.
Regular monitoring: Monitor your trading performance regularly, and adjust your strategies as needed.
Make sure you stay informed of changes in the market, and the individual performance of the traders you follow.
Disadvantages of copy trading
Copy trading is a type of investment that involves copying the trades of other traders. Although it can lead to high profits if a successful trader is chosen to copy his trades, this approach carries several risks and disadvantages, which are as follows:
Market Risk
One of the biggest risks a trader faces when copying trades is market risk, which refers to the possibility of loss due to changes in the price of financial assets. A trader can make profits if the value of the assets being traded increases, but he can equally lose money if their value decreases.
To better protect against these risks, it is advisable to distribute assets thoughtfully and not put all of your capital into one trading strategy, as an unexpected event can lead to significant losses.
Liquidity risk
Liquidity risk is another important risk, which means that a trader may not be able to exit positions at the expected levels, especially during times when markets are illiquid.
Traders should be aware of the maximum historical drawdown of the traders being copied; this number gives an idea of the largest percentage loss that can occur at any given time. Additionally, understanding the liquidity of different products and asset classes is essential, as the liquidity of the EUR/USD pair differs from that of emerging currency pairs, such as the Turkish Lira.
System risks
Currencies in emerging markets are more exposed to systemic risk, which means that funds may be frozen and a trader may not be able to exit positions. Although this scenario is rare, it can happen, especially in the foreign exchange market, and should therefore be part of a trading strategy.
Other disadvantages
Not knowing how the platform settings work: A trader may find himself at a disadvantage if he is not familiar with the platform settings.
Not recognizing the risks of the signal provider's strategy: Not fully understanding the provider's strategies can lead to uncalculated risks.
Ignorance of how much capital to allocate to each signal provider: Poor allocation of capital can lead to huge losses.
Lack of control over the investment portfolio: Copying Binance deals requires constant monitoring and continuous evaluation of developments in the situation.
Is copy trading on Binance halal or haram?
Copy trading on the Binance platform is a topic that raises a lot of discussions among scholars and legal analysts, as the debate mainly focuses on the compatibility of this type of trading with Islamic principles that prohibit usury and illegal financial transactions.
First opinion: Prohibition of copying deals
There is a group of scholars who believe that copying deals is forbidden if they contain usurious transactions. Examples of these usurious transactions include: swap fees that are imposed when deals are held overnight for long periods, and financial leverage that includes interest on borrowed money.
These scholars consider these elements to make the trading incompatible with Islamic law, because usury is clearly forbidden in Islam.
Second opinion: It is permissible to copy deals with conditions.
On the other hand, there are scholars who believe that copy trading on Binance can be halal if it is adapted to comply with Islamic principles. According to this opinion, if copy trading does not involve any usurious transactions, such as: interest on leverage, or swap fees, and if the financial instruments used comply with Sharia controls, copy trading can be considered halal.
It is worth noting that these scholars stress the necessity of adhering to pure financial transactions that are free from any suspicion of usury or uncertainty.
in conclusion
With the rapid development of the cryptocurrency market, the Binance copy trading feature stands out as a vital tool for investors of all levels. This feature enables new traders to benefit from the expertise of professionals, which enhances the chances of success and continuous learning. At the same time, it provides professional investors with the opportunity to generate additional income by sharing their strategies. It is worth noting that adopting this technology may contribute to spreading financial awareness and increasing the investor base, which contributes to achieving stability and sustainable growth in the cryptocurrency market.