Crypto Copy Trading: Everything You Should Know
Many people assume that making money with cryptocurrency involves a lot of training, research, and losses. This has led novice traders into emotional stress, depression, and even quitting being traders because it is difficult to be successful. However, trading properly can be daunting or easy – depending on the actions you take.
The reality is that you can earn like professional traders even though you’re still a novice. And, you can do this by using copy trading platforms, tools, or services. This trading strategy allows you to copy professional traders and earn like them.
Explore this guide to find out the ins and outs of copy trading, and how you can start it even as a new trader with little or no knowledge about crypto trading.
What is crypto copy trading?
Crypto copy trading is simply the process of copying the exact trades of other cryptocurrency traders. Ideally, the person you copy must be a proven and professional crypto investor or trader, to completely mirror their trades and be successful.
The normal crypto trading approach requires you to study the markets, performance technical or fundamental analysis, and look at charts. Even after placing a trade, you’ll still need to check the market to manage your trade. But with crypto copy trading, you don’t need all these processes to win in a trade. Whether you are a newbie or a passive investor, crypto copy trading allows you to profit from the market without putting much effort.
For instance, if the professional trader you’re copying buys Bitcoin when the price is falling, you’ll do the same because the trader has done more analysis and knows that the price will rise in the future. This has helped you to skip the analysis stage and you’ll still be in profit when the price increases. This can be a great way for your to learn and earn at the same time.
How does crypto copy trading work?
The copy trading concept is not only attached to the crypto market. Whether you want to trade stocks, commodities, metals, or Forex – you can copy the trades of other experts and still make your money.
The main objective is to have more profits than losses without putting much effort into the trading process. So how does crypto copy trading work?
Select a crypto copy trading platform Not all crypto trading platforms or brokers offer copy trading options. So you need to create an account with a platform that allows you to copy other traders. These platforms also have their mode of operation which means you need to choose the one that suits your objectives.
A typical crypto copy trading platform will need your setups to run automatically. This will enable the system to automatically copy the trades without your presence at all times and also close trades. However, you can manually copy trades by monitoring the traders you’re copying.
Pick a trader to copy Although some platforms automatically select the best traders, you can manually choose them. There are different factors to consider when picking a trader. For instance, you might want to copy a trader who has more profitable trades or have a strategy you understand.
The next step here is to set up the platform to mimic the trader you have selected. Crypto copy trading isn’t tied to one trader, so you can change the person you copy whenever you want.
Funding The amount of your capital in every investment determines the amount of profit it will generate and the law is also applicable in crypto copy trading. Most of the experts to be copied always put large funds in their accounts. Although you will copy only professional traders, it’s important to start with an amount you can afford to lose because nobody owns the crypto market. Start with little funds and build your account with it.
Pros and Cons of using crypto copy trading platforms
No matter how we try to paint it – crypto copy trading also has its downsides. However, that doesn’t mean that it’s not beneficial to traders. Below are some of the pros and cons you should know about crypto copy trading.
PROS OF CRYPTO COPY TRADING PLATFORMS
Automated trading This is the major advantage of copy trading as it allows you to follow other traders and still be profitable. The only thing you need to do is find a good trader and maybe monitor the traders if you don’t want the system to handle it.
Free up your time The process of becoming a successful and profitable trader involves a lot of time and energy. Before placing a trade, you need to study the market, make your analysis and monitor the trade. This will surely take much of your time, especially as a newbie. But copy trading platforms will place your trades and monitor them, giving you free time to do other things.
Takes away emotions Every new trader always gets trapped in their emotions and this can hurt you. With crypto copy trading, all the trading emotions will become a thing of the past. Since you don’t have to analyze or monitor the trade, you won’t get trapped in those emotions.
CONS OF CRYPTO COPY TRADING PLATFORMS
No control over the trading decisions Crypto copy trading platforms or systems are built to take away your control as a trader. You won’t be able to select your trades or might not even monitor them depending on the platform. This could turn a winning trade into losses.
The results are not guaranteed Professional traders also face bad luck as well and this could crash your portfolio. Always start with an amount you can afford to lose and know the risk involved. Past performance of the traders you copy can’t guarantee future profits.
Best Crypto Copy Trading platforms in Nigeria
Just like mentioned above, finding a crypto copy trading platform is the first step to being a successful crypto copy trader. Although there are a lot of platforms to choose from, we have listed the five best platforms you can join as a Nigerian. This list is in no particular order and some of the platforms offer copy trading services for other markets like Forex and Stocks.
FXTM offers copy trading services for Forex, Cryptos, Stocks, Commodities, and Metals. The broker is an international ECN broker that is very active in African countries including Nigeria. Their copy trading system is one of the best for new traders. You can start copying from a list of professional traders with a minimum deposit of $100.
- Good educational materials for traders
- Fast Deposit and withdrawal
- Limited product portfolio
PrimeXBT is one of the most popular options to copy Bitcoin traders. This platform allows traders from all experience levels and markets. Also, professional traders can earn more money by allowing others to copy their trades on the platform. You can join this platform via the free PrimeXBT mobile trading app.
- High volume and leverage
- You can set stop loss/take profit order
- Lack of educational materials for new traders
FBS provides opportunities to duplicate trades from more than 600 strategy providers on the site. However, their copy trading system is only accessible to iOS and Android mobile devices. The platform offers copy trading services for Bitcoin, Ethereum, Litecoin, and Ripple. They also have trading guides and lessons which cover topics like Short-selling, scalping, risk management, and leverage.
- FBS is regulated for Nigerian traders
- 24-hour active customer assistance for Nigerians
- Demo account expires after 40 days
- Large spreads in some accounts
eToro is not only one of the oldest copy trading platforms but the best for newbies to follow, connect and profit from professional traders. In addition to providing copy trading services for over 16 cryptocurrencies, you can copy trades in stocks, commodities, and Forex pairs. You can start with a minimum deposit of $50.
- Easy-to-use platform
- Can read comments and messages from other traders
- Some unprofessional traders
- $5 withdrawal fee
Founded in 2008, Exness has become one of the more popular names in the Forex and CFD market. This makes them a trusted name when cryptocurrency copy trading. Traders can select from a lot of trading accounts at Exness. Also, you can start copy trading by choosing from the Social Standard and Social Pro account, which is mainly for Nigerian copy traders.
- Regulated by a variety of severe and demanding bodies, ensuring the safety of client funds
- Nigerian traders may choose from several different accounts
- High minimum deposit of N41,000 for Nigerians
- Large spreads
Crypto copy trading can be one of the best ways to start making money from the market while you learn or do other businesses. As long as you get the best traders to copy, invest the amount you can afford to lose, and understand the risk involved – you’re good to go.