Have you always wanted to diversify and multiply your income? Then copy trading offers you an opportunity to invest funds for long and short-term financial returns. 

Copy trading is ideal for beginners with little to no experience and expert investors with little free time on their hands.  

If you are wondering what copy trading is all about, we got you! Here’s everything you need to know about copy trading.

Learn everything about copy trading, how it works and how to copy trade with DemaTrading. Open your copy trading account with DemaTrading here!

What is Copy Trading?

As the name signifies, when you follow or copy another investor’s trade to cash in on the same benefits as they are achieving, then you’re copy trading. 

Let’s adequately define the term. Copy-trading involves new traders replicating the trades and positions of more experienced investors using signals, social platforms, and automated tools. c

Copy Trading
Copy trading platforms allow traders to copy positions in financial markets such as forex, stocks, CFDs and cryptocurrencies like Bitcoin or even commodities.  New investors majorly use copy trading to learn and familiarize themselves with the financial market, graphs, tools and so on. At the same time, experts favor it because it allows them to take a break from their screens and focus on what is important to them. Since all trades are partially or fully automating their trades, they save time on scouting for good trades. Copy trading can do a big part of the heavy lifting in crypto. Especially for long term holders! However, before you copy trade, it’s essential to understand how the market works.

How Does Copy Trading Work?

Copy trading allows you to diversify your portfolio by linking it with another trader’s, so that any opened trades and future transactions are copied to your account automatically.  You have to choose your investment amount and depending on your success, you can either increase or decrease your investment on your chosen copy trading platform. Note that copy trading is not without risk! Thus, DYOR before making any financial decisions.  Furthermore, some copy trading platforms like DemaTrading allow you to have full control over your funds while other platforms may not. Usually automated platforms function on a fixed system; which only allows you to discontinue copying a trader if you wish.

Summarized: The pros and cons of copy trading

Although copy trading is easy, it may not suit everybody. For more understanding, here are the pros and cons of copy trading: 

Pros

  • It gives new traders room to get used to the intricacies of financial markets.
  • It offers new traders an avenue to learn from experienced traders and grow with minimal errors.
  • Convenient, easy, saves time, and runs efficiently.
  • Allows experienced traders to take breaks when the need arises. 
  • Creates a community of traders and a sense of belonging where beginners and experienced traders can share strategies, ideas, and insights needed to step up their trade.
  • It helps traders diversify their portfolios. 

Cons

  • There’s risk attached even when you copy from expert traders. For example, when a strategy fails, it could cause financial loss for even the followers. 
  • Control is limited as traders give up their portfolios to those they’re copying.
  • It may be challenging to determine a suitable copy platform or software.
  • You may have to pay fees or a minimum deposit amount depending on the broker, platform, or copy software you choose. 
  • Not available worldwide due to some countries’ policies.

Copy trading strategy

Before you copy signal providers or traders, it’s paramount to ensure that your trading strategy matches theirs. So consider the following essential strategies: 

1.Risk

Measure your risk tolerance. How much are you willing to lose? What extent of financial volatility can you condone? What sorts of tools will you utilize to handle your risk?


2. Markets 

There are several financial markets such as forex, commodities, stocks, cryptocurrencies and indices. Which of them do you want to invest in? Ensure that you understand how the market works before committing financially.

3. Flexible or fixed

Since different platforms have different systems, you should know what they offer. Also, do you want to control your funds? While open and flexible systems allow you some control over your money, fixed and fully-automated copy trading platforms do not.

4. Research 

Since there’s a huge risk attached, it’s rational to research the providers, especially as there is a tendency in copy trading that people can invest vast amounts without due diligence. Most known traders are active on the Discord server of their platform of choice or even have their own Discord server where you can ask questions or get to know them. Also, follow up on the trading performance once your fund is on the line.

How to copy trade with DemaTrading

If you’re looking forward to copy trade, DemaTrading is one of the best copy trading platforms. Here’s how to successfully copy trade with DemaTrading.ai

The first step: choose DemaTrading as your broker and create an account with us. The automated platform is regulated and has various features, offering industry standards such as security, reliability, customer support, ranges of assets, and flexibility. 

Second step: conclude on the amount you’re willing to invest and well, risk it. You may want to start with a disposable fund you’re willing to lose. Like all investments and trades, there is always some level of risk attached to investing.

You also have the option to choose traders to follow and copy. To ensure you follow the right traders, you may consider following those with strategies that align with your own vision. All published strategies on DemaTrading have been thoroughly tested by our team to ensure it works properly and accurately. 

Third step: Once your account is active, the next thing is to sit back and watch! The automated trading platform automatically copies your stock selection with the investors, you are copying.

Copy trading with DemaTrading offers you the following:

  • Financial market and trading notifications.
  • Saves time and efficiently copy trade from several investors and signal providers.
  • Ideal for newbies and expert investors alike.

Copy-trading software

Brokers can do copy trading via a third-party platform or copy trading software such as MT4— MetaTrader 4, MT5—MetaTrader 5, and cTrader.

A platform for copy trading: DemaTrading

DemaTrading is one of the best copy trading platforms in the Netherlands and is accessible worldwide. The automated trading platform optimizes, automates, and publishes its strategies for traders, which other people can copy to trade. 

The platform features a Binance Beta program that allows users to utilize trading robots on their Binance portfolio. Traders on DemaTrading also have full custody of their funds. The copy trading platform also has a wide range of bots covering and managing risk. Thus, you will find one that resonates with your risk tolerance.  

You can build your bot using the copy trading platform‘s open-source backtesting tool, which makes developing trading strategies easy. DemaTrading platform also provides you with accurate market statistics, enabling you to plan and make perfect predictions.

DemaTrading infrastructure shares your trading strategy with several connected trading platforms. The strategy is publicized and available on these platforms to use by other traders who will be charged transaction fees. The return goes to the owner of the strategy. 

FAQ 

Is copy trading good?

Whether or not copy trading is good depends on some factors. Generally, copy trading is easy, swift, and a helpful tool for new traders. Yet, copy trading has some level of risk that may result in financial loss, especially if a provider’s strategy fails. So tread with caution. 

What is the best copy trading platform in 2022?

There are many leading copy trading platforms and brokers, such eToro, DemaTrading, AvaTrade, etc., that are an all-time favorite of traders regardless of their skill levels. 

Do I need prior trading experience to engage in copy trading? 

Experience is not required to start copy trading—That’s why copy trading was invented in the first place. To help beginners gain knowledge, familiarize themselves, succeed in the financial market and grow their accounts.  

Is copy trading too risky? 

Like any trade or business, there’s always a level of risk associated with it. Copy trading is not dissimilar. There’s a chance of losing your money even while copying the best traders. It’s advised to invest what you can afford to lose because past successes of the trader you copy don’t guarantee continuous success. 

Are my funds safe on DemaTrading?

Yes, your funds are safe and secure with DemaTrading. The automated platform helps to carry out your trades and manage your portfolio. You still have control over your funds which are in your custody. 

Is copy trading profitable?

Yes, it is though it depends on the strategy followed. In 2021, with a 5-20% profit margin, copy trading ranked among the top ways to earn substantial returns from trading and investing. The best copy trading platform, DemaTrading, supports transparency in investment risk, returns on investment and consistency of professional traders.

Are you a new copy trader? Do you have more questions? Then join our Discord channel to get your answers. You can also sign up for our newsletters to stay up-to-date with our latest articles!

If you enjoyed this piece, check out these articles: 

What is automated trading

All about trading software

To Your Trading Success 

The DemaTrading Crew ❤️ 🤖

Want to read more?

Sign up and be the first to receive updates regarding our products and services!
Don’t worry – no spam.