Though this software is automated, initially, you have to provide your input. Yes, crypto copy trading can be profitable, but it is not guaranteed. You have to choose a secure platform and a profitable trader to follow. They can help you trade automatically and make the most of market movements. Copy trading in cryptocurrency allows you to directly replicate the positions of another trader.

• The crypto space has only existed for a handful of years, and so everybody is still trying to grasp how it functions in terms of technical analysis.
• Oftentimes traders can feel isolated and alone as staring at a screen with charts and numbers can feel very secluded.
• Now that we’ve explored the risks and rewards of copy trading in the crypto market, let’s delve deeper into optimizing the risk-reward ratio to make the most out of this investment strategy.
• In line with the Trust Project guidelines, the educational content on this website is offered in good faith and for general information purposes only.

Each investor should carefully research the offerings of the available platforms, as some may offer support for other cryptos. Furthermore, each platform has slightly different terms and conditions, such as fees, spreads, and worldwide availability. Furthermore, you can start this type of trading without having prior experience. You simply need to follow a professional investor on a platform. You can close this investment and stop copying their traders at any time.

Pionex: Low Fees Copy Trading Software

It’s essential to carefully consider the fee structure and weigh it against the potential returns you expect to make through copy trading. Remember that while low fees may seem attractive, it’s equally important to assess the quality of the platform and the performance of the traders available for copying. On the other hand, performance fees are calculated based on a percentage of your profits. This means that if your chosen trader generates positive returns, they will receive a portion of those profits as compensation. Performance fees can incentivize traders to perform better and align their interests with yours as an investor. Another crucial aspect is monitoring and evaluating the performance of the traders you are copying.

For example, Pionex is one the best low fees copy trading platforms. Yes, copying cryptocurrency trades is legal in most countries where cryptocurrency is allowed. But different countries may have different rules and requirements for crypto copy trading platforms and users. Based on our research, we recommend using Bybit and eToro social trading platforms.

Copy trading crypto provides data transparency

Mirror trading still allows you to benefit from the expertise and knowledge of another investor. Instead, you apply a strategy that’s been successful for them to your own portfolio. Yes, copy trading is legal in most countries, provided that the – broker itself is properly regulated. When investing in the financial markets using a regulated-broker and legalizes your account and the traders carried within them. However, all of these completely depend on your country that you are living in.

• With just a few taps in the Marketplace’s mobile app, investors can easily leverage the expertise of professionals by renting the most trusted bots on the market.
• However, it requires skill to figure out which traders to copy, and which ones to ignore.
• It allows investors with existing brokerage accounts to link a new account via their existing broker easily.
• BingX lets you follow and copy the best traders in the crypto space, who know how to make money even when the market is down.
• You should begin trading after gaining some market knowledge and accumulating some capital.

It is advisable to conduct thorough research on the best available options in the market. For this, you must check out its tools, leverage ratio, educational content, supported cryptocurrencies, and fees. Choose your favorite, seasoned trader/s and software, and then customize its settings. After that, the copy trading software will be ready to make crypto trades on your behalf. That’s why you need a dependable and user-friendly copy trading platform that gives you a wide range of traders, instruments, and tools to help you succeed in your copy trading journey. Look for features like trailing stop-loss orders, which automatically change the stop-loss level as the trade goes in your favor.

How does crypto copy trading work

For example, it is entirely possible to copy trade on Binance, Kraken, and KuCoin. This is because each of these exchanges have a trading API (or application programming interface) that allows you to write code that lets you follow other traders. However, don’t worry if you are not a programmer, because services exist which let you harness these APIs yourself without ever writing a line of code. It is understandable to hear about how to copy trade crypto and assume that it is an easy task, especially when it comes to using automated services in the crypto space. In some ways, this is true– it is simple to follow the trades of another as it relinquishes you of some of the decision-making processes.

• You also give up control over your trading decisions, though some platforms allow you to set your own risk parameters and even choose which trades to execute.
• However, it’s important to acknowledge that copy trading carries inherent risks.
• You choose an expert trader to follow, then copy their trading movements.
• But what exactly is involved in the actual process of crypto copy trading?

Copy trading is a way of making money by following the trades of another principal trader who has trading knowledge and proven success rates. You will also not learn much by simply watching other people trade without attempting to trade yourself. You won’t learn much if you just watch other people trade without trying to trade yourself.

eToro Copy Trading feature

Since its inception in the mid- to late-2000s, mirror trading has inspired other similar strategies, such as copy trading and social trading. EToro’s crypto copy trading platform is both unique and functional, with some of the industry’s most innovative social trading features. By following – and copying the trades of successful traders, investors can benefit from their expertise and potentially earn profits. However, it’s important to remember that there are no guarantees in trading, and losses are also possible. And like many others, you are just a beginner in crypto trading.

• However, too much transparency may lead to losses for the platform, as followers may be able to employ certain techniques to avoid paying following fees.
• With copy trading, you’re always in control.You can decide to unfollow the trading strategy whenever you decide that copying someone no longer makes sense financially.
• You can earn returns in your portfolio without having to invest hours researching the market.

However, they do offer a future leaderboard and it may have this feature enabled soon. You can click on any name to see more stats about their profile. You can further click on any profile to see their detailed stats which include performance over time, their existing portfolio. Once you have found the trader you wish to copy, simply click on copy and you would be asked to add the funds.

eToro: Best Ethereum Social Trading App

AvaTrade is one of the best forex copy trading platform based in Ireland and regulated in Europe by the Central Bank of Ireland. They are one of only a few top forex brokers to offer fixed spread forex trading. Avatrade provides an extensive range of copy trading and social platforms for you to choose from.

• BingX is a copy trading platform with over 1 million users within 100+ regions, BingX provides over 300 cryptos ranging from Bitcoin, Ethereum, Dogecoin, Safemoon, Solana, etc.
• Firstly, you need to understand the trading system of the trader you want to copy.
• Look for platforms that have popular coins like Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and others.

Most importantly, bot algorithms remain completely private, meaning that each creator retains full IP rights. Wasay Ali is a versatile professional writer with global experience and a background in mechanical engineering and social science. He is adept at crafting news and informational content for the crypto space and has experience writing for other niches. He has worked with several digital marketing agencies and clients in the US, UK, Pakistan, and Europe.

Bybit Copy Trading

All you need to do is sign up on the exchange, link your exchange account to Coinmatics with an API key, and pick a strategy from a trader. It’s your choice, you can start or stop copying whenever you want, pause it, and add or remove funds as you like. You can also talk to the traders you copy, discuss strategies and learn from their knowledge. Copying is free of charge, but you will still pay the 1% spreads and transaction fees. You just need to put some assets in your exchange account, find a good trader on a crypto copy trading platform, and let the software do the rest.

Copy trading is a special type of trading activity that involves copying trades from other traders. However, social trading is time-intensive and will still require you to take your own trades. Instead of automatic trade execution, social trading is meant to improve your trading skills and help you become a better trader of your own. For example, the news of interest rate hikes has caused volatility in crypto markets before, which could cause your position to get stopped out. Copying a trader that takes these factors into account will help you survive during times of uncertainty.

FAQs on Crypto Copy Trading Platforms

Whenever the copied trader places a trade, the same trade is automatically replicated in the investor’s account. This allows the investor to mirror the trader’s strategy and benefit from their expertise. Blindly following the wrong trader can result in significant losses. Just because someone has a good track record power in the past doesn’t mean they will continue to perform well in the future. Traders can also make mistakes, experience market volatility, or engage in fraudulent activities. Therefore, assessing a trader’s strategy, risk management practices, and overall performance is essential before deciding to copy their trades.

• EToro is a multi-asset platform that offers both investing in stocks and crypto assets, as well as trading CFDs.
• Copy trading is safe, but if the trader opens a bad trade, your account will replicate that trade, and you might lose your funds.
• Essentially, it enables individuals to copy the trading strategies of successful traders within the crypto market.
• By following successful traders who have consistently achieved positive results, there is a possibility of earning significant returns on investment.

Trading is risky and letting other people do it for you may do more harm than good. A third major risk category is liquidity risk, the risk that you are unable to close a trade at a reasonable price, because of insufficient buying or selling interest. This happens in markets with little interest, or outside of regular trading hours. This risk is often forgotten about when talking about copy trading risks but is still one to keep in the back of your head. Systematic risk is a risk you cannot really protect yourself against; this risk is present in any market. The outbreak of the coronavirus, or the terrorist attacks of Sept. 11, 2001, are good examples of these events, which caused large losses for many traders.

Why Opt for Crypto Copy Trading?

This can be done manually, where you track another entity’s actions on your own, or automatically with the help of a dedicated platform or a bot. It is a strategy that allows investors to copy the trades of experienced and successful forex investors and implement the same trades, in almost real time, in their own accounts. Mirror trading was initially only available to institutional clients but has since been made available to retail investors through various means.

As a result, copying them would theoretically allow you to do the same. To optimize the risk-reward ratio in copy trading, thorough research is necessary. Scrutinize the performance history of traders you are interested in copying, analyzing factors such as their trading strategies, risk management techniques, and overall track record. This analysis will help you gauge whether their approach aligns with your goals and risk appetite, enabling you to make informed decisions.