More and more people are starting to turn to copy trading. This method is praised by many traders because it helps them earn passive income. People use special platforms in order to perform copy trading, and they also make use of special features. Even newcomers can earn a lot of money by copying experienced traders, which is what makes the method so popular.
You may have read an MTrading review and became interested in using it for your copy trading strategy. Or maybe you’ve just learned about how much passive income you can make using this method. Copy trading makes it very affordable to enter the market, so it will not be difficult for you to start your own trading journey.
Before you get started, though, you must have a clear understanding of copy trading and know what you must do in order to earn money. This is what we’ll discuss in this article so let’s get started!
Copy Trading – How Is It Different from Conventional Trading?
If you’re just getting started with trading in general, perhaps you do not know what sets copy trading apart from conventional trading.
When it comes to trading, people have to be active with trade performance. That being said, people who perform trades choose the assets to trade, open positions, make analyses, and many other things.
Some traders get into professional trading. This helps them earn money from the asset price change. Furthermore, they spend all their working time making trades, dealing with all the benefits and risks it involves.
Copy trading involves copying a professional trader’s trades, using a certain platform’s features to aid with this process. This type of investment was first created more than 10 years ago.
People can copy the trades of successful traders and earn a lot of money as a result. Of course, professional traders are not perfect either, so if they make a bad move and lose money, so will the copy trader.
Copy Trading Pros and Cons
When you first get into copy trading, it is easy to see all the benefits it can provide. You do not need to be experienced with trading or have any trading skills, so it’s an easy way to make some money. Moreover, you get to learn from the best, which can help you later on, when you want to start doing your own trades.
However, copy trading is not perfect. It also has some drawbacks, and it is essential to know them before you get started.
- Pros
- Low entry threshold
- It makes it easy to earn money
- Possibility to make high amounts of money
- The Platforms are easy to use and functional
- You can learn trading strategies from professionals
- Cons
- If the professional makes a bad trade and loses money, you can lose money too
- Just because managers are profitable at the moment, it doesn’t mean they will stay profitable forever
How to Make Money with Copy Trading
How can you start earning money with copy trading, though? You may be one of the new investors who want to make some profit using copy trading, but you must know some tips and tricks before getting started. Here are a few ways to make money with this trading method:
- Open Your Trading Account
First things first, you must open your trading account. It must be done on a proper platform, especially if you do not want to lose more money than you make.
How can you pick a suitable platform, though? Well, if you’re just getting started with trading, you should look for something with low fees and a simple interface. Also, opt for a platform that offers a demo account option.
With the demo account, you can check the performance of the platform and see how risky it is. You should look at whether any money and risk management tools are offered.
If you’re a beginner, you must learn more about trading, so you should also find a company that offers a lot of resources. Last, but not least, the ideal trading platform must have several professional investors that you can copy.
Some good options include MTrading and eToro.
- Start Small
Investing larger amounts of money doesn’t guarantee that you will win your trades. Instead, you should start with smaller amounts, such as $100. Now, sure, this will not bring instant success either, but it is best to start your copy trading experience like this. You will be able to invest more once you gain some experience.
- Follow Good Traders
Copy trading involves copying someone else’s trades – therefore, you must find someone suitable to copy. You cannot copy just anyone’s trades. Ideally, you should look at the traders who have incredible performance, especially those who had a stable performance for an extended period.
Some platforms, such as eToro, have filtering systems that show you the best performances. You should not instantly follow them, but rather use them to do your own research and then take action based on your discoveries.
Some traders may suddenly experience a downfall – so, following someone just because they had a good performance last year doesn’t make things safe.
You can choose your traders by looking at their profit from closed trades. If that individual has plenty of realized profit, they are certainly a good trader.
Also, you should not follow a trader who only does the same things, because it limits your moves. Look for someone who has a more diversified strategy.
The Bottom Line
Copy trading is an amazing method, especially for beginner traders. It allows people to make passive income in forex so that they can enter the market quite easily. Even though results may not appear right away, there is very good potential for this trading method, especially if you are dedicated enough and determined to earn money.
Follow the tips in this post, do your research, be careful and you will be able to make money with copy trading.
