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Gone are the days when you used to make self-trading decisions, analyze the market, and execute trading. The process took your entire day and produced error-prone results. Not anymore, because copy trading has replaced manual trading. It is good news for financial market traders to learn innovative copying techniques effortlessly and continue their profitable careers. If you are into knowing what makes copy different in the present day, here is the guide explaining what social copy trading is.
This article will teach you a basic-to-in-depth study about social copy trading. In addition, you will learn about the best copy trading platforms suitable for most tradable instruments. So, read this guide to the end, which mentions the pros and cons of copy trading, ensuring you make informed decisions.
What is Social Copy Trading?
Social copy trading refers to replicating the trading decisions and strategies of expert traders already working in the saturated market. You may not know, but social copy trading is the combination of social media and copy trading. You copy other investors’ trades using a social media platform, often in real-time.
A provider or manager introduces trading tactics on a social platform, allowing beginner subscribers to follow and copy them. Moreover, providers’ statistical strategies are available so that you can interpret and make informed decisions with transparency. Social copy trading often enables traders to:
- Follow, copy, and interact with expert traders.
- See expert’s trading decisions and performance
- Copy trades automatically
Why Choose Copy Trading?
It does not matter whether you copy trades, strategies, or other data; copying is not a new thing in the lens of common sense. However, if it makes up to the copy-appropriate platform these days, knowing the reasons why choosing copy trading using a social media platform is essential.
Beginner Benefits: Copy trading allows beginners to learn under the supervision of experts. Now, you have no complaints of insufficient knowledge, as copying the experts’ trade strategies makes you earn money easily.
Pro Trader Benefits: Social copy trading does not only benefit beginners. Instead, it provides equal services to pro traders. The provider registers on the platform and earns a commission. The more users follow trades' decisions or strategies, the greater the income.
Passive Income: Copy trading strategy is an ideal option for earning passive income. You do not have to master market trends and analytics; simply choosing traders and copying their strategy will serve the purpose.
Customize with Ease: Copy trading offers setting services. These include controlling risk and potential returns and customizing several settings to match your investment goals.
Fully Automated: Another plus point of choosing copy trading is that it runs on automation. Now, making trades does not require you to remain online all day and night.
In-Depth Reports: You can track your results, monitor your trading statistics, and tell other traders about your successes. Obtain comprehensive reports to aid in optimizing your copy-trading approach.
How do you Successfully Copy a Trade?
Do not be confused about how to initiate copying trading. The process is at the distance of making an account on the trading platform. You must create an account and sign up for the copy-trading platform. So, why not get started without wasting any minutes?
1. Choose a Platform
First things first, you must choose a reputable copy trading platform. Although the options are money, pick one that suits your investment goals and personal preference. Among them, the popular ones are eToro, Binance, and CryptoHopper.
2. Create an Account and Sign up
Open the website of your chosen platform and click on the "Sign up " option. Next, provide your basic information and create an account. It must include an email address, username, password, country where you reside, and phone number, if not optional. You must click the verification link emailed to your email address to activate your account.
However, this step also requires additional information, such as your full name, date of birth, and occupation. Please fill it out and confirm opening your copy trading account.
3. Verify your Identity
When setting up your copy trading account, it sometimes requires you to meet the regulatory requirements, which include:
- Uploading government-issued passport and driver’s license.
- Providing address documentation, such as bank statements and utility bills.
- Finishing facial recognition verification.
4. Set up your Account
In this part, you must configure currency and notification preferences. Also, you are independent in adhering to risk management settings. (e.g., stop-loss, take-profit)
5. Deposit Funds
Now that you have almost completed the account-making steps, it is time to deposit funds. You have many options for funding the account, from credit card and bank transfers to cryptocurrency. Choose one that is easy and suits your preference.
6. Choose a Trader to Copy
What are you waiting for? Start searching for the trader you want to copy. Browse the trader’s profile on the platform, pick one, and decide how much to provide them for their plan.
7. Start Copying
Your chosen copy-trading platform is automated. It will start copying the provider’s trades right after you confirm your settings.
Point to Note: Each platform has its specific requirements. Before creating an account, you must review the platform’s requirements and terms and conditions. Moreover, some copy trading platforms demand extra information, such as:
- Passing a trading knowledge assessment
- Agreeing to terms and conditions
- Setting up two-factor authentication (2FA)
What are the Advantages and Disadvantages of Copy Trading?
Social copy trading is known for providing endless benefits to beginners. But you cannot deny that it comes with good or bad sides. Here are some pros and cons of copy trading for beginners. You must glance before lifting a step ahead into the copy trading world.
Advantages
- It provides convenience in replicating trades, saving time and effort.
- Social copy trading offers various learning opportunities for new traders.
- Beginners can easily access a variety of trading markets and strategies.
- The copy-trading technique is appropriate for beginners with limited experience.
- Copy trading helps make a community of pro and new traders.
- Many copy trading platforms prevent losses by providing risk management tools.
Disadvantages
- Copy trading lets new traders depend on expert trading strategies.
- Beginners are limited to trusting the experts unquestioningly.
- New traders do not have any control over customizing trading decisions.
- Risks are inevitable if experts make poor decisions.
- Personal trading skills are not nourished
- Copy trading often faces regulatory risks.
Best Copy Trading Platform
You already know that the trading technique survives even before platforms are created. It includes replicating crypto exchanges and stocks and trading on forex and commodities. However, the need to make copying common on legit platforms is due to the diversification of digital assets, increased demand for the platforms by new users, user reliability, and global access. At the same time, it increases the necessity of knowing the best copy trading platforms. Here is the answer if you want to know.
eToro
- Minimum Deposit: $50-$10,000
- Tradable Instruments: 6030
eToro is a well-known online trading platform that has existed since 2007. It is a leader in copy trading and has clients worldwide. The services and offerings are unignorable. A crypto copy trader can follow and copy popular investors from a user-friendly interface, crypto trading, to commodities. You can use automatic copying, adaptable portfolios, and real-time performance tracking by registering on eToro.
The best thing about the platform is that it provides a virtual portfolio and a mobile app for practice and on-the-go trading. It comprises various trading tools, 66 indicators, and 13 drawing tools. Lastly, the platform is easy to use for traders.
AvaTrade
- Minimum Deposit: $100
- Tradable Instruments: 853
AvaTrade is a platform founded in 2006. It is like an online broker hub leading to several copy trading platforms, including DupliTrade, Ava Web Trader, AvaSocial, or MetaTrader 4 and 5. Though each deals with traders’ needs, the prominent function is to provide easy and social trading with over 840 trading options.
Moreover, the services involve following and copying top traders, with features like flexible portfolios, risk management tools, and real-time performance tracking. This platform also provides the MQL5 community, allowing users to connect with traders and share strategies. Registering on AvaTrade costs less, making it suitable for day, swing, and position trading, with favorable overnight charges.
ZuluTrade
- Minimum Deposit: $100
- Tradeable Instruments: broker dependent
ZuluTrade is one of the pioneering copy trading platforms known for connecting beginners with top providers. You can call the providers as ‘Signal Providers.’ It is famous because it provides a system known as ZuluRank and a feature called Traders Como. The former ranks signal providers to help subscribers make informed decisions. The latter allows new investors to gather multiple providers into one portfolio. ZuluTrade is indeed a copy trading platform with advanced features and easy access.
Pepperstone
- Minimum Deposit: $200
- Tradable Instruments: 1200+
Another reputable online broker is Pepperstone. It provides a copy trading platform through Duco. In addition to customizable portfolios, real-time performance tracking, and various risk management tools, it offers a tool to create trading strategies. The tool, Smart Trader, allows traders and subscribers to customize their trading strategies at will.
Binance
- Minimum Deposit: $10-100
- Tradable Instruments: mostly cryptocurrency
While many copy trading platforms are available for various tradable instruments, such as CFDs, stocks, and index-based ETFs, Binance is a crypto copy trading platform that works solely for replicating crypto exchanges. It offers a feature known as Binance Copy Trading, through which pro traders and new ones easily follow and copy top traders. However, features like customizable portfolios, real-time performance tracking, and risk management tools remain permanent regardless of whether the platform is for crypto or other traded instruments.
Coinbase
- Minimum Deposit: $10
- Tradable Instruments: support 240+ cryptocurrencies
The same goes for Coinbase, a well-known crypto exchange. It recently introduced Coinbase Pro, making it easier to see and copy other traders' strategies. In this way, the platform fulfills the cryptocurrency trading explained requirements.
Manual Trading vs. Copy Trading
Manual and copy trading are different approaches in the financial market. Why? They differ in characteristics, functionality, nature, and many more.
Manual Trading
- You make all trading decisions per will without interference.
- You interpret markets, identify trends, and execute trades manually.
- Manual trading demands time, effort, and exceptional expertise.
- It is time-consuming and emotionally challenging.
- Manual trading allows an entire control of customization of trading strategies
Copy Trading
- You automatically copy another trader’s trades.
- Copy trading is less challenging, time-saving, and effortless.
- You are free from analyzing markets or making trading decisions.
- Copy trading is an ideal choice for beginners with insufficient experience.
- You have less control and customization over trading decisions and strategies.
Wrapping Up – Social Copy Trading
Copy trading is a new technique in dynamic financial markets. However, the speed at which it is gaining popularity stuns every trader. It lets you start a profitable career, saves time, and is effortless. In this article, you must have learned enough about social copy trading, its pros and cons, and the steps to initiate it. In addition, this guide highlights some of the best copy trading platforms with their minimum deposits. Remember, choosing a copy platform is purely your choice, so choose wisely while minimizing the chances of future risks.
