What is Copy Trading and how does it work?
Copy Trading service is seeing increasing investor interest in the financial markets. Copy Trading is a social trading tool that allows less experienced and novice investors to follow and copy the trading strategies of more professional and successful traders.
Copy Treading works by providing a trading platform such as an AS-HOM CTRADER stock platform that allows investors to browse and follow the performance of other traders in the network. Data on the past performance of these traders is displayed, including returns, open and closed Treading, and success rates.
Transaction history
Copy trade service or social trading is a relatively new form of automated trading as it has developed over time. The first form of copy trade was introduced in 2005. Copy trade is an opportunity for novice investors to learn the basics and strategies of trading, while continuing to follow the successful trades of more experienced traders. Besides, copy trade is also an opportunity for professional traders to increase their income by sharing their strategies with others and earning a commission for each copy.
Basics of Copy Trading
The basics of Copy Trading are among the most important rules to follow while entering this industry:
Choosing a Trading Manager: The first step is to choose the trading manager whose trades you want to copy. You can rate the managers based on their historical performance, risk appetite, trading style, and other relevant factors.
Copy Trading: Once you have selected your trading managers, you can start the copying process, where the AS-HOM CTRADER platform will automatically duplicate the trades executed by the selected trading managers in your trading account.
Relative copying: Copy trading platforms usually offer relative copying, which means that trades are copied in proportion to the funds allocated in your account. For example, if 5% of the total capital is invested in a particular trade and you have set aside $1,000 to copy the trade manager's trade, you will invest $50 in that trade in your account.
Real-time Execution: The AS-HOM CTRADER platform typically executes in real time, ensuring that you will benefit from the same market prices that are used by the trading managers.
Risk Management: Copy trading involves risks, and it is important to manage these risks effectively. Although copying trading managers achieve success and profit, it may not guarantee stable returns. It is necessary to diversify strategies and trading managers to control more risk management.
Did you know? Forex provides an opportunity for traders to take advantage of currency fluctuations, traders can buy one currency against another that is expected to appreciate in value and sell it later for a profit.
Profit from Copy Trading
Copy Trading is profitable when choosing the right trading manager that matches the allocated budget, however, the markets can be unpredictable and suffer from volatility at times in addition to that, copy traders can face issues with regard to liquidity and trade execution.
Investors can join trading communities where experiences are exchanged and suggestions are made on which financial assets to buy or sell. These communities can provide valuable support and information to copy traders.
Is copy trading legal?
Copy Trading is not illegal, and there is no legal problem with following and copying other traders' trades, but trading and investment laws may differ from country to country, and there may be some restrictions or requirements that you must follow when practicing copy trading, for example, you may need to obtain a license or register to be an authorized trader or trader in some financial markets.
The main drawbacks to Copy Trading
Copy Trading allows traders with limited experience to achieve a successful investment position.
When copy trading, it is essential to determine what disposable income you have.
Copy traders are subject to systemic market and liquidity risks.
It requires choosing which traders to copy based on factors such as historical performance, risk, and trading style.
Advantages of Copy Trading
Copy Trading is a trading style that provides an opportunity for traders to replicate and copy the trading strategies of the most successful and experienced traders in the financial markets, and its most important advantages are:
Access to the experience of successful traders: Less experienced investors can benefit from the proven and successful trading strategies of the professionals, and thus can achieve similar profits without having to spend years learning and gaining experience.
Simplification and convenience: Investors can simply select successful traders and copy their trading with one click. This saves time and effort and allows investors to focus on other things such as learning, studying, creating another business to increase income, shopping, etc.
Diversity in investment: Investors can choose traders who specialize in certain areas such as foreign exchange, stocks, commodities or futures, and in this way, investors can take advantage of different investment opportunities and reduce risks by diversifying their portfolios.
Flexibility and Control: Copy Trading service platforms provide flexibility and control to investors. You can adjust your copy trade settings, such as the amount allocated to each trader, stop loss levels, and the number of trading to be copied. You also have the option to stop copying a particular trader or add new ones based on changes in market conditions or your investment goals.
Conclusion
It can be said that Copy Trading service provides an opportunity for investors to learn and benefit from the experience of successful traders, simplify the trading process, offer diversification in investment, and enhance transparency and continuous learning. However, investors must take the time to choose the appropriate traders that suit their goals and investment budget.
