Copy Trading Explained: How to Replicate the Success of Expert Traders

Copy trading is a method whereby traders can replicate the trades shared by professional traders.

It provides a way for less experienced traders to benefit from the knowledge and experience of the professionals, among many other benefits.

This includes exposing the trader to different trading strategies for coins/projects, which can save them time.

As a result, beginners can maximize their prospects of profiting while enhancing their trading skills by learning from the best.

Also known as social trading, copy trading is commonly offered by trading terminals and automated trading platforms. While the implementation varies, the basic concept remains the same. 

Getting Started with Copy Trading

The first step to getting started with copy trading is to identify a reputable platform, which can be done with little research. Customer reviews, pricing, platform tools, and features are all great performance indicators of what may be a promising platform.

Once you have the platform chosen, it’s time to choose the right traders to copy. 

Pro traders provide information on the positions they are entering and how. This information is known as the ‘signal,’ and copy trading platforms allow you to follow specific trading channels that post signals. Select a trader or group whose signals align with the trading strategy you’re seeking. The copy trading platform will allow you to mirror – or copy – these trades by sending the orders to an exchange you’ve connected to by API.

Learn From the Best

The beauty of copy trading is its plethora of benefits and, of course, the direct access to crypto experts. 

Traders aren’t infallible and will not call the market right every time. But with the ability to view the PnL of signals providers, auto trading platforms make it easy to identify the best traders and tap into the rich well of knowledge they provide.

The benefits to the novice or intermediate trader don’t just extend to generating greater returns: copy trading platforms also provide convenience by automating the entire process, from receiving the trading signal to executing the corresponding trade. You can trade via an automated trading terminal or even through Telegram.

There’s More Than One Way to Trade

There are many ways to trade crypto, from spot to futures and CEX to DEX. Different traders pursue strategies that align with their skill set and area of interest. With copy trading platforms offering dozens of signal channels to follow, it allows traders of all backgrounds and skill level an opportunity to identify opportunities and trading styles they best resonate with.

While professional groups provide the signals, the trader copying them retains the ability to configure how these are implemented. For example, the order type, size, and trading frequency can all be adjusted. That way, you can benefit from the alpha provided by pros who know the market without needing to match their size. It’s a good idea to start small when experimenting with automated trading. That way, you can experiment with different signal groups before settling on the channel whose trading style works best for you.