a month ago 6 min read

Is Copy Trading Actually As Heavenly As You Think? Earn Quick Money

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Table of Contents

Everyone must be excited to learn that, thanks to the expertise of professional traders, your account can expand several times on its own without you having to spend a lot of time studying analytical procedures or continually watching the market. The "Copy Trade" feature was designed with those lovely ideas in mind. Yet you must realize that everything carries some risk, particularly with ventures that are difficult to profit from without experience. Let's investigate the hazards to see if Copy Trade is actually as miraculous as it seemed in the beginning.

How Does Copy Trading Work?

Copy trade can take many different forms, including:

  • Replication automatically: Every action taken on the Master's account will also be taken on your account.
  • Semi-Automatic Copying: You can pick what to copy and will be informed of any actions taken on the Master account based on the selected signals.
  • Manual Copying: Suitable for experienced traders, you determine who to copy and which transactions to imitate.

Participants in the Copy Trading

This involves a connection being made between a copyist and a copy donor as well as an intermediary.

  • Pro trader/master: also called a copy trader or a signal provider. These individuals are responsible for managing orders, placing trades, and demonstrating their whole approach for others to copy. They will be paid a portion of the commission from both the broker and the copier if the trade is successful.
  • Copier: They'll choose the account to copy, determine how much capital to put into an order, and then copy some or all of the master's approach. If the trade is successful, you must subtract a certain percentage of the profit for the pro trader/master from whom you copied the trade.
  • Brokers: Based on the performance of professional traders and masters over time, brokers will offer copy trading platforms and leaderboards of their profiles. Follower and Master will pay transaction fees and account maintenance fees to brokers. They will have to give the Masters a commission if there is a lot of trade.

Advantages of Copy Trade

Copyists only

  • Copiers don't need to follow charts, research the market, or develop a plan of action. Your Lord is responsible for all of this. The only thing you have to do is research the people you imitate, check out their victory percentage over time, and then copy them.
  • No prior experience necessary: Even novices can readily join and make a profit because investors do not need to conduct any additional study.
  • It doesn't take much time: This allows investors to free up a lot of time for other tasks by eliminating the need to constantly examine the market and keep an eye on charts.
  • Investors only pay fee on profitable trades. This means that they do not pay commission on unsuccessful trades. Otherwise, you simply pay the Broker's transaction cost.
  • Benefit from the experience of others: Entering the market without experience is extremely dangerous. The lack of knowledge will make your account fly quickly. But when copying you will benefit from the experience of professionals, pro traders. They will be the one to analyze, strategize and you only need to extract 1 winning part to pay them.
  • Can gain a great deal of knowledge and experience: Investors can increase their understanding by studying the masters' tactics. Every day after that, your sense of worth will grow.

Nevertheless, in order to take advantage of these advantages, the user must possess the necessary information and evaluation skills when using this feature. Without these skills, making an investment decision is completely dependent on luck.

As a Master

Receiving a portion of the fees from the Brokers and a portion of the commission from the Followers (copy investors) is the masters' biggest perk.

For Trades

The trade will give the Followers a platform for duplicating the orders of the Master. Fees for upkeep of the copy platform will be borne by followers. The floor gains this advantage in the copy trade as well.

The Dangers of Mimicking Trades

All three participating parties gain from copy trade, although the copyist is more at risk when the risk is balanced. These are a few dangers you should be aware of while replicating deals.

Hazards Involved in Selecting a Duplicate Account:

  • Hazards associated with selecting a Master account to duplicate trades: The trader will be forced to face a significant risk if they select an unreliable copy account.
  • Losing a lot of money: When replicating trades, investors must also pay copy trade fees to brokers and commission percentages to Masters in addition to the spread, commission, and swap fees. If you are not skilled in managing capital, the profit made after each successful order is minimal.
  • Controlling the account will be challenging if traders totally entrust Pro trader/master with managing their profit and loss.

It is challenging to correctly forecast the direction of the price because the market is continuously shifting, especially when predictions are believed. So, no matter how skilled a trader is, he or she cannot guarantee that all of their predictions will come true. If the market is turbulent while you are copying deals from experienced traders, you still run the danger of losing your entire account.

Inappropriate Capital Allocation Risk

Several investors deplete all of their money because they have such a strong belief in the Masters. If you pick the wrong Master to duplicate, this is quite risky. It is best to adopt capital management strategies and allocate resources effectively.

Investors must constantly be aware of broker risks in all transactions, not only duplicate trades. You run the danger of losing both money and profit if you hire a broker who isn't insured.

Remarks to Help Participants in Copy Trade Reduce Hazards

Choose a Genuine "Pro" Trader.

When you join the Copy trade, one of the most crucial decisions you'll make will affect how successful you are. You can take into account the following criteria:

  • Investing performance over time: For at least a year, you should look at the pro trader whose services you are considering. The more data you have to examine the trading style and outcomes of that professional trader, the longer the trading time.
  • Profit: Seek out professional traders who have regular trading results as opposed to erratic ones. Examining their performance graphs will help you with this. Does it depict a spike or an ascent? This is not a positive signal if it surges quickly and then drops again.
  • Amount of followers: A pro trader may be considered a successful trader if they have a sizable number of followers. Of course, you always get to make the final call in trading.
  • Risk Level: Choose a professional trader who shares your level of risk tolerance. See if they employ stop-loss orders and other risk management techniques, and if their trading style fits with the objectives you have for your investments.
  • Post-Loss Behavior: Successful transactions demonstrate a pro trader's trading approach. Losses are still possible, though. It is crucial to evaluate that trader conduct under varied market conditions, especially when the market goes against their strategy.

See a Variety of Professional Traders at Once

You may then combine this information with the effective pro trader selection techniques I described above to create a list of professional traders you can emulate.

To reduce risks and balance long-term profits, I've found that you should follow three to six professional traders, including one to three scalpers and two to three swing traders.

Allocating Capital While Replicating a Trade

Following a list of expert traders, you should focus on how to allocate capital to maximize returns.

You can use a portion of your capital to test the skill of the professional traders on the following list for a set amount of time. Increase your funds if a professional trader is performing consistently. You should firmly unfollow any pro trader if they perform poorly or suffer excessive losses.

Time is Still Needed for Follow-up

Verify the transaction data for the copy account, such as capital, net profit, and orders, when the master account executes an order. The follower's account is also automatically executed with the entry level, stop loss, and take profit. both opened and shut. From then, if the trading master incurs a loss, the follower can either quit copying or sell his stake.

Thus, if you don't believe your professional trader's plan or notice indicators of significant loss, you can be proactive and continue or stop this function to reduce the risk.


Below are the shares we made regarding the Copy trade function. For traders with minimal experience or those with limited free time to trade but who still wish to make orders and generate passive money, this is generally a relatively safe feature. You shouldn't trust the exchange or the masters with your funds because this is a very unsafe tool. Please give your decision carefully thought before making any investments.

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