Advantages of CopyTrading

If you are new to trading, copying the trades of experienced traders can help you learn about the market and improve your results. A beginner trader can have several copytrading advantages, such as access to the strategies and knowledge of experienced traders, increased confidence, and time savings. This article will briefly explain what copy trading is and the potential benefits it brings.

What is copy trading?

Simply put, copy trading allows you to copy trades made by other traders. The basic goal is to find another proven investor and start copying their trades. Your may get success and good results, but when it does not always go in your favor, which means it will also copy losses which may happen as trading is uncertain. Remember to constantly monitor and update the trading performance of the signal provider you are copying.

There are briefly three parties involved in copy trading:

Provider – In this case, trades are being copied from traders which also referred as a “master trader or signal provider”.

Follower - This is a person who copies the provider's trades in their own trading account.

Brokers – Brokers like Inveslo provide access to copy trading platforms (such as MetaTrader 4) that allow providers and followers to connect.

A worth choice for beginner traders

To note, Copytrading is useful for beginners who do not have time to create their own trading strategy and follow the market. At the same time, copy trading is attractive to experienced traders as well who want to diversify their trading.

Here are some of the key advantages of copytrading

1. Good for beginners

It enables traders to familiarize themselves with the financial markets for the first time and feel confident in their trading. Most copy trading platforms have a user-friendly and simple interface, which makes them suitable for beginners, otherwise the number of options and different order types in mainstream trading can be overwhelming for new traders.

2. Access to trade with limited knowledge

Copy trading offers investment opportunities for traders with limited knowledge, such as beginners or those who have little time to trade on their own. While it is beneficial to follow and imitate the strategies of experienced traders, it cannot completely eliminate the need to research and understand the market along with implementing a sound risk management strategy.

3. Saves time

Copy trading has an automatic mode that saves a lot of time. This ensures that transactions are carried out as quickly and efficiently as possible. The essence of copy trading is the fact that much of the process can be automated. Once you select a signal provider or trader to replicate, copy trading platforms usually facilitate the rest based on specific parameters set by the investor. This saves you more time than manually entering transactions.

4. Perfect learning platform

Copytrading gives you a platform to learn from traders with years of experience.

Some master traders remain anonymous, while others prefer to build communities around their services. This way you can learn from experienced traders and exchange ideas with other fellow traders.

5. Diversified portfolio

Portfolio diversification is an important aspect of risk management. This kind of diversification is easily possible in copy trading. Investors can choose from a variety of traders who trade different assets, on different timeframes and with different strategic approaches. All of these can be combined to provide balance and diversity within your portfolio.

6. Customizable trades

Most of the best copy trading platforms such as Inveslo not only allow users to directly copy the signal provider's trades and strategies, but also allow them to adjust certain parameters of the copying method. This means that investors can choose to copy trades, but in smaller volumes or only certain parts of trades. What and how much you copy from your signal provider is often flexible. This allows the copied trades to be tailored to different risk profiles and account levels.

7. Controlled risk

You can limit your losses with copy trading. If the provider does not meet expectations and the investment is not profitable, the customer can choose another trader to work with. Plus, copytrading gives you access to statistics - an important data that enables risk management. Users can view statistics and analyze trader's work characteristics before choosing him.

8. Profitable for experienced traders

Copy trading is not only useful for traders who do not have time to trade on their own, but it is also useful for pro traders. An experienced trader may choose to copy someone as a diversification tool to his trading activity. For example, a trader may be most comfortable using a swing trading strategy but may imitate someone who has had success with scalping. If opportunities are lacking, copy trading can make up for some of it.

Originally Published on Blogspot

Source: https://inveslo.blogspot.com/2022/09/advantages-of-copytrading.html