What You Need to Know About Copy Trading

Market advancement has taken shape quickly in the last few years. Along with this has bred a whole new set of strategy and concept facilitating ease of entering the financial market One of these strategies include copy trading which is ever-growing in its popularity. 

In particular, the foreign exchange market and other stock trading platforms have incorporated this in their services. In a nutshell, copy trading allows you to copy the positions and decisions undertaken by other traders and connect and incorporate their portfolios into yours. By virtue of this alone, it has attracted new investors and traders to the market. In this blog, let’s explore all the basics you need to know about copy trading.

What is copy trading?

As the name suggests, copy trading is a form of trading that enables individuals to directly copy the positions made by another trader that they have selected to copy from. One selects the traders and individuals they want to copy from and from then on, all the positions, actions and decisions made by that trader are reflected and also taken by their accounts. This means that once you link their profile to your portfolio, you get to copy all their current transactions and positions and any decisions they make from that point will also happen to yours – all the wins and well, even losses, included. 

What makes copy trading attractive? 

Market entry is easier than ever

The market has since expanded and included this and Forex and stock trading platforms, especially with the rise of a more online and virtual based market and trading sphere, offer this service. In itself, the market is already viable and has good potential for traders who want to expand their portfolios and venture into this. However, the rise of online platforms and this option has made the entry to the market even easier.

The fact of the matter is there are a lot of these platforms present now and this is crucial in entering the market. If you want to enter the forex market with copy trading or try copy trading even when you’re already in the market, you must choose the right and appropriate platform. 

Research the platforms that are present. Check those that are already familiar to you and see if they offer this as not all brokers and trading platforms support this feature. Currently though, there has been a rise in platforms specifically made for copy trading and some have established their dominance in the game. These platforms are specifically created for the purpose of copy trading and the tools in these platforms are there to facilitate this. It provides an extensive list of features to make sure you get connected to the right trader for you, your goals and your approach. So yes, market entry has become easier than ever but you have to choose the right platform that will connect you to the right trader.

Portfolio expansion is tailor-fit for you in a breeze 

As with increased ease in entering the market, portfolio expansion is also made easier. In this specific context, your goals and approach for trading is already set. With these platforms, it is easier for you to find those with the same strategy in order to expand your portfolio. This also opens up an avenue for you to diversify. Whether you may be limited by time, day jobs, or other commitments, these platforms make it a breeze for that expansion and diversification to happen. As these traders are already in these positions and are able to make these decisions with confidence, especially when they are tailor-fit for you, the potential losses that you could incur are minimized.

Learn as you earn

Perhaps, along with ease in entry, this is one of the biggest selling points of copy trading. It allows you a degree of confidence that there will be significantly fewer losses on your end since you are copying and following other traders who are far more established than say someone who just started with forex or stock trading. In doing so, it allows you to study their strategy and patterns. It also gives leeway for an amateur trader to take more risky personal decisions and trades outside those they are copy trading. It gives more room for learning the market and its dynamics as it allows you to earn based on the skills of other traders.

Fret not, you still have control – perhaps even more than you think 

You might think that with this, all your decisions moving forward will be dependent on these copy trades but this is not the case. In fact, I’d say you have more control now especially since this allows you to observe and learn the market. Market risks will still be present but more experienced and expert traders will be doing this for you and you can decide who these will be depending on who you think fits you the best. That is one part of minimizing the risk on your end. However, you still have the ability to disconnect from copied trades and manage your stocks yourself. You can assess and try different traders and styles and find one that’s best for you. The big thing about this is, for the most part, regardless of the trader you choose and whether they are fit for you or not, there will be a certain degree of assurance and win because these are also traders who want the 

This also allows you to invest in yourself as a trader and a potential source for copy trading in the future. With continued work on your portfolio and learning the ins and outs of the market and the platform, you are well on your way to making your trades and portfolio profitable and consistent enough with your strategy that you become a trader where others can copy from.

Market entry is, as any new thing in our lives, scary. But that definitely makes it more exciting, especially when there is a safety net available as you explore. This is true for copy trading. We do what we can to mitigate the risks and maximize the benefits. The foundations are already laid down for you to begin, we just have to grab this opportunity that’s already at our doorstep.

To find out more about copy trading or other Investment solutions, visit 4xc.com