Our website is focused on major segments in financial markets – stocks, currencies and commodities, and interactive in-depth explanation of key economic events and indicators. You should also be careful which trader you choose – at the end of the day, you are entrusting a part of your portfolio to a total stranger.įounded in 2013, Trading Pedia aims at providing its readers accurate and actual financial news coverage. You should be really careful in your choice of platform depending on how much control you want to have over the operations. Its a nice way to being making money on the market but its not without risk. It allows you to experience the successes a and failures of others and learn directly from their mistakes. Final WordsĬopy trading is the perfect start for a newbie trader. In time you will learn to see everything you need in order to become a trader, yourself. But that wont stop you from seeing what works and what doesnt based on the successes and failures of others. Sure, you might not have taken a trade in your life. This is a mutually beneficial relationship.Īlso, smart is he who learns from his own mistakes, but wise wise is he who learns from the mistakes of others. If they are more talkative, they can even directly show you and give you a few tips. This way you can see what experienced and successful traders do and you can figure out why. It allows you to begin trading without knowing anything about trading. Copy trading helps you get rid of that fear. Its not easy to begin with, and once you throw charts and patterns into the mix, it becomes confusing enough to throw even the most enthusiastic newbie trader in panic mode. Once again, we will talk more about the different platforms in future sections of the guide. On the other hand, there are also more liberal platforms that allow you to control your funds manually.įor example, if there is a trade you dont like or you think that if it remains opened for longer you will end up losing from it (or lose more), then you can manually close it. Some sites use a fixed system, which means that once you begin following a trader, the only course of action you can take in general to stop copying them. Once you begin copying a trader, you can have different scales of control depending on the platform youve chosen. We will talk more about this in future sections. You will have to check with the provider. Note: Some platforms allow more control than others. You should always keep in mind that investing more is a risky move, though. If youre especially satisfied with the results, you can try to increase your profits by investing more. You can still increase or reduce the investment based on the traders performance. Its a good idea to keep your portfolio diversified and not invest too much in single trader. However, this also increase the risks because you in case its a losing trade, your losses will also be bigger. This way you will invest more when a trade is copied to your account which increase your profits if the trade is successful. If you like how the trader is handling your investment, you can seamlessly increase the funds. Check the sites policy before you begin trading with real money. Note: Some sites use an automated system where a certain percentage of your portfolio is invested. The trader has one open trade which is copied to your account. Thats why you invest USD 100 (or 10% of your funds). His stats look promising but since this is your first time trying something like this, you dont want to invest too much. You dont have any open trades but youve decided that you want to copy a trader. Imagine your accounts balance is currently USD 1000. The sums used the trades are a calculated percentage of the traders portfolio based on how much you decided to invest. In most cases the sum cannot be more than 20% of your portfolio. You are prompted to choose a sum to invest in a certain trader. Furthermore, all of their actions in the future are automatically copied to your account, as well. Once you copy a trader, all of their opened trades are copied to your account. Copy Trading MechanicsĬopy trading connects a part of your portfolio with the portfolio of a trader of your choosing. In order for the process to be considered copy trading and not social trading, you have to copy a trader using the automatic system provided by the platform youre using. In other words, copy trading allows you to copy the actions done by other traders. Unlike social trading, copy trading isnt as reliant on the information provided by other traders as it is reliant on their actions. How Does Copy Trading Work? This lesson will cover the following