Copy Trading has become very popular in the last few years. The possibility of copying other more experienced traders’ operations and market strategies was made possible thanks to social networks and, in particular, to the popularity of Social Trading.
The potential of Copy Trading is clear since it has allowed thousands of new investors that weren’t familiar with the ins and outs of the online trading world, to make investments and buy or sell assets successfully, using other traders’ methods and learning how the market reacts, at the same time.
There are many online trading platforms that offer Copy Trading. However, if you are looking for the best platform for copy trading, you probably want to go for ZuluTrade, Naga Trader, or eToro. There are more, but these ones are in the top 3 of the best online trading platforms for Copy Trading.
So, the question is: Is Copy Trading effective and legal for investments?
The answer is yes and yes! Let’s learn some more about Copy Trading to understand its full potential.
What is Copy Trading?
Copy Trading is a natural consequence of the development and new earned popularity of Social Trading. Online trading platforms, like eToro, have made it possible for traders to see and analyze data from other traders’ operations in the market, transforming the platform into an educational tool, and therefore making Copy Trading possible.
In Copy Trading, the operations or investment strategies of one trader are copied by another one. Obviously, it’s important to do your research on whose operations are you copying and how effective will they be to make the best possible profit.
Copy Trading doesn’t eliminate the risk factor that every operation in the market has. It only offers a bit of insight into what may be interesting methods to deal with in the market.
Copy Trading can be done manually or in a completely automatic manner. In fact, some online trading platforms offer all the necessary tools to automatize the process of copying movements, operations, and strategies. In turn, this makes trading especially easy for beginners that may be just entering the world of online trading and want to understand how the market works.
Benefits of Copy Trading
The main benefit of Copy Trading (and honestly, what makes it very popular among beginners and those inexperienced with certain markets) is the access to other traders’ expertise.
The online trading platform will also give you access to all the data regarding those operations you are hoping to copy and will allow you to automatize the process, so you don’t even need to be in front of the computer.
Copy Trading is a great way to get familiar with a market that you may have not to deal with before. It’s a learning tool as well as an effective investment tool.
While Copy Trading can be a good way to give your first few steps into an unfamiliar market, it should be just that. Ideally, traders will do their own research and experiment with new strategies in the future. It also must be mentioned that copying someone else’s operations does not eliminate risk.
What do you need to know before Copy Trading?
Before deciding to go for Copy Trading new investors need to research the traders whose operations they are planning to copy. Copy Trading can be an excellent strategy, as long as it’s used with strong research.
Your online trading platform will provide you the data and charts that will help you understand better how the market you’re interested in works, and which traders are making the best deals. You just need to choose the best online trading platform for you!