Navigating the murky waters of cryptocurrency is proving more difficult as the days come by. Increased volatility, unstable economic conditions, the collapse of crypto firms and other issues in the sector have made the art of trading more complicated than ever.
However, a panacea most enthusiasts are not paying much attention to is crypto copy trading.
In this precarious time, buying and selling crypto successfully requires a lot of research, analysis and practice, which very few experts possess. Fortunately, because you can’t put in the work and sacrifice does not mean you will miss out. This is where crypto copy trading comes in.
In this explainer, we will dissect crypto copy trading, how it works, and how you can get started.
What is crypto copy trading?
Crypto copy trading is a concept that allows anyone to copy the actual trades of proven cryptocurrency investors on autopilot, fully automating the entire crypto trading process.
Remember that with conventional crypto trading, you need to study the markets, look at charts, analyse and research to support your trading decisions. Additionally, after placing a buy or sell trade, it’s up to you to manage the transaction and exit at the right time.
However, crypto copy trading offers something different from this. It gives newbies and passive investors a way to profit from the market without necessarily going through the stress of research.
How crypto copy trading works
When you decide to go for crypto copy trading, the first step is identifying the right trader. The efficiency of copy trading is determined by the skill level of the trader you are following.
You should research the available traders and analyse their skill levels considering parameters like profitability of trades, the total amount of funds they manage, risk level and the number of followers.
Secondly, selecting the right software is as essential as choosing the right cryptocurrency trader. There is a list of prominent software to choose from later in this post. The process is automated, so the entire trade is smooth. The software could be set up to invest the same amount or the percentage as the trader being emulated.
Also, a trader using copy trading features can switch to another lead trader at any time. They can pause any trade the software makes or decide on their own about closing a position without waiting for the action of the lead trader. They can also choose more than one lead trader to diversify their portfolio. However, one must determine the amount of capital one wants to allocate to each lead manager.
Crypto copy trading platforms to choose from
To copy trade, choose a trader you’d like to copy from one of the crypto copy trading platforms, sync your brokerage account, and let technology handle the rest. There are more than enough crypto copy trading platforms and different strategies.
While finding a profitable trader to copy is still up to you, we’ve saved you the hassle of looking for platforms to get started.
Crypto copy trading makes anyone, regardless of experience or skill, profit from investing in crypto markets without investing their time. It, however, has its downsides.
The efficiency of the trading process depends on the skill of the lead trader. A wrong move could dampen the whole exercise, so it is crucial to do adequate research when selecting a trader and platform.
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