How Using Copy Trading Bot is a Valid Opportunity to Consider in 2023?
If you are new to the world of crypto trading, there are chances that you will be looking to explore the best ways to earn without investing much time and efforts. Many people consider investing in cryptocurrencies an easy task, and they end up with huge losses. This could be due to the lack of knowledge about the crypto trading and its strategies.
If you have ever traded crypto assets, you might have heard about the term copy trading. But, at the same time, you might be wondering what all this fuss is about. Let’s understand what does it mean and how can you perform this kind of trading?
Copy trading
As the name suggests, copy trading is all about copying the trades of other people who you think are more experienced or who generate more profits than losses. Nowadays, many crypto exchanges offers copy trading feature, with both sides of processes getting benefit from it. How? Individuals whose trades are used for copying earn a share from the profits that copy traders make, while exchange players investing their tokens in any platform hedge themselves against many vital issues. Copy trading is when you use special software or program to copy the trades of another trader. The exact process of copying the trades depends on the platform and copy trading terminal you use.
How copy trading actually work?
To understand how copy trading works, you can choose a copy trading bot from any third-party crypto trading platform like TrailingCrypto. Visit the copy trading page and choose the master trader whose trades you want to copy. You will be able to view their commonly traded pairs, performance metrics, their ROI, and more. Based on these factors, you can select the master trader.
Once you have selected the master trader, transfer the funds to your copy trading account and select the order size of your desired trading pairs. Advanced traders can customize their leverage for trading pairs, maximum slippage, take profit or stop loss levels. Copy trading is actually the best option for novice traders.
Apart from this, if you are a trader who has no time to manage their portfolio, copy trading could be an excellent choice to discover new trading strategies that you have never considered before. Additionally, copy trading bots make the whole task easier for you by automating the trades. As soon as the expert trader places any trade, it will automatically copy the trade in your trading account as per your preset conditions.
Copy trading bots
Copy trading bots give you the versatility to use them on various supported crypto exchanges. The bots will automatically execute trades according to the instructions. They are similar to other types of crypto bots, but the ones for a copy trader will specifically copy the trades of someone.
These bots allow the traders to benefit from the success of expert traders by mirroring their trades. And, at the same time, they are at risk as if the trades of expert traders fail, you will also face losses. Those traders who send buy and sell signals are often compensated in the form of a certain percentage of profit or by selling some subscriptions to their services. In addition to being able to copy the trades by using copy trading bots from third party platforms, it is also possible to copy the successful trader’s settings, such as take profit, stop loss, trailing stop loss, etc.
Crypto bots automatically execute the trades based on the instructions given to them or set for them. These bots are offered by third party platforms and have the copy trading feature which lets traders to copy the other traders’ trades. TrailingCrypto is one of the best crypto trading terminals offering copy trading feature to its traders for all the popular exchanges.
Is copy trading risky/profitable?
Copy trading can result in massive profits if you choose the trader to follow with caution after checking all their features or after their background check. However, you may experience some amount of risk if the market fluctuates. Moreover, if the strategy of the fellow trader you follow fails, you might lose money.
What you really need to understand before copying the trades is whether the trader you are choosing is right for you or not. If the experienced trader you are copying has a low-risk profile, then you can safely invest more money without worrying about losing your investment. On the other hand, if the trader you are copying is making high profits in very less time has a high risk profile, it is better to consider investing less money. As such, copy trading is only worth it if you make sure you choose the right trader.
You might also experience liquidity risk if the tools or trades you invest in face liquidity during volatile market conditions. Typically all trading is somewhat risky. Thus, copy trading carries some amount of risk. However, in this strategy, you have full control over the amount you want to invest. Moreover, you can also adjust your risk parameters to suit your needs on the copy trading bot. Even though you will be copying another experienced trader, it is advisable to conduct proper market research before making any decision about placing the trades.
How can you start copying the trades?
If you decide copy trading as your next trading strategy, it is quite easier to start with:
- Firstly, you have to choose the copy trading software. Consider their reliability and what exchanges are supported. TrailingCrypto is one of the best copy trading terminals or software providing the best platform to copy the trades of expert traders.
- Choose the trader to copy. Your goal is to maximize your profits. So, make sure to choose a trader with maximum followers, their past performance, and more.
- After choosing the trader, it’s time to adjust the copy trading settings. Allocate the amount you will invest with the trader methods.
- Now, monitor the results or the profits. Monitoring will let you adjust the strategies or stop copying the trades if you are bearing losses.