Copy trading significantly increases the chances of success for beginners and creates new earning opportunities for experienced traders.
What is Copy Trading?
Copy trading is a portfolio management tool that allows traders to copy the trades of more experienced investors. The bottom line is that subscribers repeat the same trading strategy as trading masters. At the same time, trading masters receive 10% of the profits of their subscribers.
During copy trading, the positions of the masters of trading and its subscribers are adjusted synchronously. That is, new agreements will be closed and opened to subscribers in the same way as a trading master does. It is important that the subscriber has the opportunity to close positions on his own before the trading master does it.
How to become an Experienced Trader?
First, you need to choose a trading master whose strategy you will copy. To make the best choice, you must follow the following parameters:
# Number of days as trading professionals;
# Percentage of successful transactions;
# Subscriber income;
# Percentage of successful transactions;
# Total number of subscribers;
# The total number of transactions.
Next, you need to make a deposit to your copy trading account. Funds can be transferred from a derivative account. After that, it remains to subscribe to the trading master of your choice and adjust the trading parameters based on the risk that you are willing to bear.
After that, you can relax and profit from the efficient trading of the master trader. For this, you give a small percentage of your profits.
How to become a Trading Master?
A trading master can become a person who meets at least one of the following criteria:
Opinion Leaders – For example, bloggers on YouTube with an audience of 5 thousand or influencers on social networks;
# Copy Traders – People who have shared their strategies with others before and know how to do it;
Successful Traders – Those who successfully trade on the exchange and are ready to share the strategy with others for even greater earnings.
This type of trading can be called a kind of safe. After all, copy trading is just repetition. There is no personal analytics here, although it would be useful here, because you can’t just repeat and not understand it.
However, this direction of trading is quite popular, because there is an understanding that large funds and investors will not risk their money and will try to preserve their capital and even increase it. Therefore, watching «big players» is very useful.
By the way, it is very useful to analyse the behaviour of an investor with large capital. So, you can understand which direction is relevant today, and what can give potential profit. These processes can insure you against major losses. The main thing is to choose the right and reliable broker like AvaTrade and know that your money is protected and will not go anywhere.
