Key points:

  • Binance Copy Trading allows users to automatically copy the trades of experienced traders, giving beginners an easy way to participate in the cryptocurrency market.

  • It also offers flexibility and control, allowing users to adjust their copy trading settings and manage risk with tools such as maximum loss limits.

  • Copy trading on Binance is available for spot and futures markets and can be useful for novice traders who want to learn from experienced traders or for those who prefer a more autonomous approach to trading.

Introduction

Cryptocurrency trading can be complex and time-consuming, requiring knowledge and constant market monitoring. For those who may not have the time or experience to actively trade, but still want to participate in the markets, copy trading is a good solution. In this article, we'll explain what copy trading on Binance is, how it works, and provide a step-by-step guide to help you get started.

What is copy trading on Binance?

Binance offers a copy trading feature that allows users to automatically copy trades of more experienced traders, making it easier for newcomers to participate in the market. Using this feature, users can automatically execute the same trades as their chosen lead trader, without the need to constantly monitor the market. 

As of May 2024, copy trading on Binance is available for spot and futures markets in selected countries. These products can be especially useful for novice traders who want to learn from experienced traders, or for those who prefer a more autonomous approach to trading.

How copy trading works on Binance

1. Selection of traders

The first step in using copy trading on Binance is to choose a leading trader. Binance provides a list of top traders, each with a detailed profile that includes their trading performance, strategies, risk levels and historical data. This information helps users make more informed decisions when choosing a trader to copy.

2. Automatic execution

Once the user selects a leading trader to copy, all future trades of the trader are automatically displayed in the user's account. This includes opening and closing positions, as well as adjusting stop-loss and take-profit levels. Automation ensures that users can benefit from the trader experience without having to manually execute each trade.

3. Control and flexibility

Although copy trading on Binance automates the trading process, users still retain control over their accounts. They can adjust their copy trading settings, such as the amount of capital they wish to allocate or the ability to stop copying a trader at any time. This flexibility allows users to manage their risks and investments according to their own preferences.

Risk management

Binance provides various risk management tools to help users protect their investments. These tools include the ability to set maximum loss limits and allocate only a portion of the total capital to copy trading. By using these tools, users can minimize their risk and protect their funds from significant losses.

However, it is important to remember that all types of trading involve risks. If the strategy you follow turns out to be unsuccessful, you may suffer losses. Do your research and only risk money you can afford to lose.

Advantages of copy trading on Binance

1. Access to experienced traders

By copying experienced traders, users gain access to the knowledge and strategies of experienced professionals. This can help them learn trading techniques and market analysis, potentially improving their own trading skills over time.

2. Saving time

Copy trading eliminates the need for constant market monitoring and manual execution of transactions. It can be especially useful for users who have other commitments and cannot devote much time to trading.

3. Diversification

Users can diversify their investments by copying several traders with different strategies and risk profiles. This can help spread the risks and increase the chances of achieving sustainable returns in the long term.

Getting started with copy trading on Binance

Step 1. Create a Binance account

If you don't already have a Binance account, you need to create one. Visit the Binance website and click Sign Up. Follow the instructions to go through the registration and verification process, which includes email address and identity verification.

Step 2. Make a deposit of funds

Once your account is created, you will need to deposit funds into your Binance account. Go to the "Wallet" section and select "Deposit". Select the cryptocurrency you want to deposit and follow the instructions to transfer funds from your external wallet to your Binance account.

Step 3. Go to the Copytrading platform on Binance

After making a deposit, go to the [Trading] menu at the top and click [Copytrading] to access the platform.

Step 4: Browse and select a leading trader

On the copy trading platform you will find a list of traders available for copying. Each trader's profile will contain important information such as their trading performance, strategies, risk levels and historical data. Take your time, review this information and choose a trader that fits your investment goals and risk tolerance.

Step 5. Allocate funds for copy trading

Once you've chosen a trader, you'll need to set aside funds to copy trades. Please note that your Binance copy trading account balance is separate from your regular Binance account.

Click [Copy] to select a method and specify the amount of capital you wish to allocate.

Binance copy trading offers two methods: Fixed Amount and Fixed Ratio. 

A fixed amount will set a fixed price per order until the total copy trading amount is exhausted. This allows you to control the amount of investment. You can also set a total stop loss to protect a percentage of your funds in the event of a loss.

The fixed ratio will open orders in proportion to the position size of the lead trader and your available balance. 

For example, if your lead trader has a portfolio of $10,000 and places an order for $1,000 (10%), your order will be opened using the same 10% multiplier. If you invested $1000, your order will cost $100 (10%).

In the [Advanced Settings] section, you can set additional parameters such as margin mode, leverage and position risk.

Step 6. Monitoring and adjustment

Although copy trading automates the trading process, it is still important to monitor your account regularly. Monitor performance of copied trades and general market conditions. If necessary, adjust your copy trading settings or stop copying a trader if its performance does not meet your expectations.

Results

Copy trading on Binance is a valuable tool for those who want to participate in the cryptocurrency market without the need for extensive knowledge or constant monitoring. By allowing users to replicate the trades of experienced traders, it provides the opportunity to benefit from professional expertise, saving time and effort.

Remember to do your research, use risk management tools, and be aware of market conditions to get the most out of your copy trading on Binance.

Disclaimer: This content is provided to you "as is" for general information and educational purposes only, without any representations or warranties. It should not be construed as financial, legal or other professional advice and is not intended to recommend the purchase of a particular product or service. You should seek advice from appropriate professional advisers. If the article is written by a third-party author, please note that the opinions expressed are those of the third-party author and do not necessarily reflect the opinions of Binance Academy. For more information, please see our disclaimer. Digital asset prices may be volatile. The value of your investment may fall as well as rise, and you may not get back the amount you invested. You are solely responsible for your investment decisions and Binance Academy is not responsible for any losses you may incur. For more information, please see our Terms of Use and Risk Warning.