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When you’re thinking about beginning your trading journey, there’s likely to be one key question on your lips: is copy trading profitable? In this article, I’ll explain the basics of profitable copy trading, helping you to decide whether copy trading is right for you.
There’s no hiding that trading can be a risky business. That’s why many people look to copy trading as a safer alternative, using the experience of more established traders to try and earn a profit.
But How Profitable Can Copy Trading Really Be?
Many people swear by copy trading as a way to make money without leaving their homes. By copying the actions of established traders, you can limit your risks and simplify your trading.
But is there really money to be made in copy trading, or is copy trading a fad that will soon fizzle out? Read on to discover whether you could make an income from copy trading.
What Is Copy Trading?
Copy trading allows you to mimic the actions of an established trader, using their knowledge and experience to try and earn a profit. It can be done either automatically using an automated trade bot, using a signal service or through a service that manages investments and returns.
This type of trading is popular with new traders who are looking to build up experience in trading without having to spend hours learning the ropes. Copy trading is also favoured by traders who don’t have the time to commit to traditional trading. That’s because with copy trading, you can benefit from trading without needing to study graphs and watch screens all day.
Is It Easy To Make A Profit From Copy Trading?
Copy trading can be an effective way to make money. It allows you, as the investor, to mimic the actions of experienced traders. This means that you can begin to make profits without needing any prior experience or knowledge of markets or trading.
With copy trading, you can venture into markets that you’d otherwise avoid, knowing that you’ve got the backing of an expert. You can choose from forex, crypto or stocks trading, without having any prior experience in the industry.
When you begin copy trading, you’re basically investing in the strategy of the trader that you’re following. By mimicking another trader, you’re choosing to replicate both their successes and their failures. The key to successful copy trading is to choose the right copy trading services, but this can involve a lot of research and testing.
Copy trading can be extremely profitable, but only if you do it right and are fully aware of the risks that you are taking.
Can You Lose Money With Copy Trading?
Copy trading can help you to lower your risks, as you are following the actions of an experienced trader. However, it’s important to remember that even if you are following everything that an experienced trader does, your capital is still at risk and you could still lose money with copy trading.
There are a lot of people out there who call themselves experts yet are consistently losing money. If you choose to follow these people, you will replicate their failures for yourself. That’s why it’s so important to know the best copy trading services to use in order to minimise your risk and maximise your returns.
How Much Money Can You Make From Copy Trading?
The amount you’ll make from copy trading will depend on the amount that you invest and the service that you choose to use. Like any trading, profits are not guaranteed and you may make a loss.
However, choose the right platform and you’ll have a good chance of making profits each month. For example, crypto currency service Yieldnodes offers an average return rate of 10% each month. With compounding, a £1,000 investment could turn into £3,138 after a year.
Remember though, this is just an illustration based on past performance – your actual returns will be different due to fluctuating rates, meaning that there is no guarantee of future performance.
How Does Copy Trading Work?
Copy trading is broken down into signal services, automated trading bots and platforms which manage your investments and returns. How copy trading works will depend on the type of service that you’re using.
For example, signal services will send you signals from an experienced trader based on predefined parameters, whilst other platforms will allow you to copy multiple traders through one account. There are also some completely automated platforms, where you deposit your funds and leave the rest up to the platform.
Each type of copy trading works slightly differently, but they all have one thing in common: you don’t need to have any prior knowledge of trading to be able to get involved.
What Percentage Of Traders Are Profitable?
Not many traders are actually profitable. In fact, some research suggests that only 1.6% of traders actually make a profit. The main reason that traders are unsuccessful is that they invest in the wrong services.
The best way to make a profit trading is by following the example of an experienced trader. Although there will always be an element of risk in trading, you can minimise this risk and maximise your chance of being profitable by making sure that you invest in the right services and by following the experts.
Discover The Best Copy Trading Services
If you’re ready to give copy trading a try, I’ve got you covered. I’ve tried, tested and reviewed over 100 products and services in the forex, crypto and stocks industries over the past decade, making the mistakes so that you don’t have to.
I’ve put together a list of my top three services to help you to avoid the scams and get started with copy trading. Here are my top three services that I’d recommend to anyone looking to try copy trading for the first time.