Copy Trading, a new way of trading. Social trading!
Trading is a risky and often expensive adventure for beginners, but when done correctly it’s a good way to earn a little extra for people willing to take a little risk. That’s where social trading comes in. Social trading is copying trades of professional investors. However without a lot of knowledge and dicipline it is almost impossible to be profitable long term. It’s important to learn what to do, and what NOT to do. Copy Trading is not trading yourself, but following professional traders on copy trading platforms. This allows you to see, what they’re doing and why they’re doing it. Read on if you want to learn what copy trading is all about.
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Make money with money by copy trading?
Copy trading is offered on social trading platforms where you can follow and copy trades of experts or other (professional) traders. On social trading platforms you can look up other traders profiles and check their results. When you find a successful trader, you can copy the profile and your account will automatically open and close the (future) trades of the profile you are copying. For people who want to start trading but don’t want to watch the market, lack experience or just don’t know how, this can be an easy way to earn some extra money online with the risks of a more experienced trader! There are several social trading platforms offering social or copy trading.
- Read Etoro Review about social trading, alternatives and the eToro platform.
Who is copy trading for?
Day trading is without a doubt one of the best ways to make money. Unfortunately It takes a long time to master and not many people are succesfull in doing so.
Copy trading is a alternative way to start of trading as it allows you to start trading quickly while using more professional traders’ experience. It’s a good way to get started with trading for people who are willing to take more risk to make money with money and gain a higher return with “spare money”.
Copy trading carries significant risk and you should invest no more than you can spare.
Although copy trading can get a big ROI. It’s not for people who are looking to get rich quickly or people who want to invest their savings with low risk for a longer term.
- If you want to make money yourself read:
- Want to invest yourself? Check out: Cryptocurrency
What social trading platforms offer copy trading?
There are online platforms available where you can trade by yourself, or manually copy trades of experiences traders who give out signals. Copy trading platforms are like social media trading platforms where you can follow “friends” (read: traders) and automatically copy every trade they open and close. It allows new traders to start trading by using the knowledge of experienced knowledge of more professional traders.
The most well known and used copy trading platform is eToro. It has been around since 2007 and offers the possibility to test out their platform using demo-accounts (which I recommend doing). Unfortunately eToro is not available to US-residents. It does have user-friendly interfaces and it easy to get started.
How to start copy trading
You can start social trading on eToro by signing up and opening an account. When you’ve created an account you will have to verify it by providing an ID and proof of address. You can start trading with real money once your account is verified and you’ve deposited money onto your account. It is possible to deposit funds before your account is verified, but you’ll have to complete it to continue trading.
A demo-account does not require verification.
How do I select a trader to copy?
Once you’ve opened an account you can start trading yourself by clicking on “Trade markets” (as in the image above) or start copy trading and click “Copy People” and select the traders you want to copy. You can use different filters to select traders based on:
- Location – copy traders from certain countries
- Markets – copy traders who trade in specific markets
- Profits – copy traders based on their profits in the last 1,3,6,12 months
- Drawdown – copy traders basedon their maximum loss
When you find a trader you can allocate an amount of your account-balance to that trader and you are set, your account will now open their future positions proportionally to your account balance!