What is Copy Trading?

What is Copy Trading?

Copy trading is an investment strategy that allows inexperienced traders to execute trades made by more experienced and successful market specialists. The main idea is that investors can copy the best traders, utilizing the experience and knowledge of professionals to minimize their risks and increase potential profits. This method is especially popular among beginners in financial markets, as it does not require deep knowledge or active participation in the trading process.

How Does Copy Trading Work?

The principle of copy trading is quite simple:

  • Investor selects a specialized platform. These platforms feature top traders available for copying with open profiles that display their trading history, profitability, and strategies.
  • Investor analyzes profiles. They choose those whose results seem most attractive and align with their goals, investments, and acceptable risk level.
  • After selecting a trader to copy, the investor subscribes to their signals. This means every trade made by the chosen specialist will be automatically copied to the novice’s account.
  • The system automatically replicates all trades, including asset purchases and sales, in a proportionate amount relative to the investor’s account balance.

The investor can stop copying, change settings, or choose another trader to follow at any time.

Types of Copy Trading Technology

There are several types of copy trading:

  • Direct Copying – Exact replication of all trades made by the selected trader.
  • Managed Copying – Copying with the ability to adjust parameters such as maximum trade size or risk level.
  • Social Method – A broader concept that includes the exchange of ideas and strategies among platform participants.

These strategies have become widely popular among cryptocurrency market participants – crypto copy trading.

Automated Platforms for Crypto Copy Trading and Their Advantages

There are many platforms for this tool, offering a wide selection of traders and settings, with detailed analytics and professional trader ratings. These services are integrated with multiple or single cryptocurrency exchanges.

This method offers significant advantages.

Here are the main ones:

  • Simplicity and Accessibility: Automated platforms simplify the investment process to the maximum, making it accessible even for beginners.
  • Time-Saving: Investors save their time and intellectual resources by relying on the expertise of professionals, avoiding the need for independent market analysis.
  • Utilizing Strategies and Knowledge of Successful Traders: Only the best are copied, increasing the chances of success.
  • Investors Can Copy Multiple Portfolios Simultaneously: This reduces risks and diversifies their investments.

Platforms offer detailed statistics and performance analysis, allowing investors to evaluate the effectiveness of traders.

Risks and Drawbacks

Despite its advantages, this type of investing can come with risks:

  • Loss of Capital: No service or platform guarantees 100% profit. If the chosen trader makes unsuccessful trades, the investor will incur losses.
  • Complete Dependence on the Chosen Specialist: The investor fully relies on the decisions of the selected trader and has no influence over their actions.
  • Platform Fees: Platforms charge fees for using copy trading services or for successful trades.

Remember that copy trading, like any form of investing, carries risks. It is important to thoroughly research the system and the chosen traders, and to invest only the funds that you can afford to lose.

Copy Trading: How to Start?

Let’s look at how to start profiting from your investments, using the example of working on the website tradelink.pro. The choice was made due to the service’s good reputation, numerous positive reviews, personal experience, and some interesting tools it offers. It not only allows you to copy professional traders but also creates so-called “indexes.” These are combinations of several strategies to achieve the best results.

How to Trade Indices: Tradelink tracks the crypto portfolios of exchange leaders, with automatic verification using the independent monitoring service TradeLink Passport. The data for the crypto portfolios is collected directly from exchanges and cannot be falsified. Strategies are selected based on 35 criteria, and a personal interview is conducted with the trader (manager). The trader provides an investment declaration, and Tradelink monitors compliance with its conditions.

In other words, the service relies not on a subjective rating of traders but on real results, with no more than 0.3% of strategies out of 4000+ passing the filter and being included in the platform’s indexes.

The indexes are transparent; you can view their performance (profitability), age, what they consist of (included strategies), and their weight in the set. You can create your own index from several strategies and copy successful trades at your discretion.

To start working, you need to:

  • Open a futures account on Binance with a verified account.
  • Register on Tradelink.
  • Connect the account to the TradeLink Marketplace platform.
  • Choose an index and click the “Invest” button.

The money remains in your Binance account; Tradelink only charges a small fee on the actual profit and cannot withdraw money for you. You can stop working and withdraw money from the exchange (not from Tradelink, as the money, as mentioned, remains on your Binance account) at any time. Note that to accurately copy the best strategy sets, you need to consider its minimum deposit. After registration, there is no commission for 30 days, meaning you can copy trades of successful traders for free in the first month.

As you can see, starting to copy professional traders is actually quite simple. Register on tradelink.pro and replicate the trades of the best traders!