What Is Copy Trading?
Copy trading has grown in popularity in recent years, but what exactly is copy trading and how can you get started as a copy trader? Let’s answer this question.
The stock and forex markets can be a scary place for many newbie investors, so before you start investing your hard earned cash, it would be wise to also invest as much time as possible in learning about how stock markets work and also to learn how to choose the right trades.
The problem for some people who would like to have a go at stock market trading is that they simply don’t have the time to spend researching every single trade. They also might not always be available to make those quick, highly profitable trades that some of the top traders thrive on.
Rather than going it alone, then, many new traders have decided to join social or copy trading platforms. Online brokers like these offer a new kind of trading style for investors, helping them to learn the ropes by allowing them to copy the trades of other top traders on the platform. You can also set up your copy trading account to automatically copy their trades if you would prefer, so that you don’t even have to lift a finger or do any research.
Have you ever wanted to know what trades the top stock market traders are making as they happen? Would you also like to be able to copy those trades? Well this is effectively what copy trading allows you to do. Copy trading is part of a trading phenomenon known as social trading. Social trading has adopted some of the best features of popular social media platforms to allow traders to connect on a social level, as well as sharing their trades in real time for others to admire, comment on or even copy.
So, if you’re considering making the leap into the world of online trading then social trading could be a great way to start. Why? Here are some of the benefits of social trading.
Low Initial Investment
Many copy trading accounts will allow you to start trading with low initial deposits. If you are extremely risk averse, then some platforms will even allow you to start off with a demo account to see if copy trading is right for you.
Connect & Learn
As your copy trading platform also doubles as a social networking platform you have the opportunity to connect with and learn from some of the best forex and stock market traders around the world.
The best copy trading platforms also allow you to view detailed reports and graphs relating to the trades that have been made on your account. This statistical data allows you to see exactly which trades have been successful and also those which haven’t. Again, this can help you to increase your knowledge of forex and stock market trading, so that you can eventually start making your own trades when you feel comfortable doing so.
Build a Reputation
If you do start making your own trades and have a lot of success, you can also use the social platform to share these trades with others. You could soon be known as one of the best traders on the platform and have other newbie investors copying your trades! The best bit about this is that some social trading websites also allow you to make money from this by allowing you to charge a subscription fee to those who want to copy your trades.
Make Use of the Demo Account
Every investment carries a certain element of risk so be sure you’re happy with those risks before making or copying your first Forex trades. If your chosen copy trading platform provides the option, I’d suggest you play around with a demo account for a reasonable period of time first before making your first copy trades. If after reading this post you decide that you want to stick with standard forex trading of course, then you can always start by opening up an Etrade account and taking it from there.