What is Copy trading?

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Avatar for pandoru1997
1 year ago

In this article we will tell you everything you need to know about social trading. Copy trading, also known as social trading, allows everyone to have access to the financial markets, regardless of their level of experience. This investment method is based on copying, as the name suggests, the investments made by other more experienced investors. For example, if you consider that a certain investor is very successful and obtains great results, you can decide to make a copy trade and make the same investments.

It should be noted that copy trading connects a small part of your funds to the account of an experienced investor. Therefore, any movement made in that account will affect your funds. The movements can be, for example, opening or closing positions, assigning limit orders or using the take profit option. The latter allows you to automatically close your investments when a certain limit is reached, thus avoiding a possible risk of loss.

Remember that you always have the option to disconnect the operations of the account you are copying and continue individually. When a trader allows others to copy his trading strategies, he usually receives rewards and discounts on future trades. This form of trading is a unique solution for people who wish to trade and invest money with the goal of increasing their initial capital but lack the time or experience to do it themselves. If you think you could be a copy trader, check out the IBEX 35 today.

There are many traders who offer the possibility of copy trade. In addition, there are multiple platforms that offer this service. Some are manual. Others are automated and offer automatic or semi-automatic copytrade. However, they all offer different variations.

Benefits of copy trading

Once you understand what copy trading is, you will be able to appreciate its advantages. The copy trade, among other things:

  • It allows novice copy traders to familiarize themselves with the financial markets and gain confidence in their movements within the platform through the monitoring of experienced investors.

  • It also allows experienced traders to participate in the market, even when they are busy and cannot invest time in researching the market. Copytrade can be used with a variety of instruments. This includes currencies such as the euro, cryptocurrencies such as , stocks such as Vodafone shares, commodities and much more.

  • It creates a community of traders, both beginners and experienced, who exchange ideas and investment strategies. In this way, they improve their operations together, as well as attend and develop new strategies.

Risks of Copy Trading

Obviously we are not in an ideal world, everything has its risks and so does Copy Trading:

  • Investment risk. When we invest we are taking risks, no matter if we choose the best trader or even the best investment fund manager, risks are always present.

  • Market risk. Market risk is derived from the previous one, we may choose a trader who has proven himself in the past, but if the market becomes more volatile or unstable, his strategies may not work as well as they did before.

  • Risk of choice. We may not choose correctly whom to copy.

  • Asset allocation risk. Another risk of Copy Trading is not giving each investor the correct capital, leaving more money to the less adequate and less to the one we should have given more.

Copy Trade with AvaTrade

AvaTrade offers a variety of direct and indirect copy trading. This is due to its collaboration with leading signal providers that offer the option to follow traders around the world.

AvaTrade provides the ability to trade on all major platforms:

  • ZuluTrade - With a wide variety of signal providers to choose from.

  • DupliTrade - With a wide variety of signal providers to choose from.

  • AvaSocial¬† - With a wide variety of signal providers to choose from.

All platforms have a wide variety of signal providers to choose from, but they are also safe and reliable platforms where you can trade without having to worry.

Ultimately, the combination of AvaTrade's worldwide reputation with some of the best signal providers offers security and quality of service, providing peace of mind to users like you. By copying the moves of the best traders in the market, it is possible to learn about the world of trading....

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Avatar for pandoru1997
1 year ago