The boom in social trading in recent years has been an important testament to the usefulness of this tool for novice investors. Providing a unique opportunity to start earning without significant experience in finance, copy trade has become an excellent chance for those who:
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- want to start trading seriously and search for experienced mentors
- still don’t really understand if they want to devote a lot of time to trading, and therefore prefer to try with someone’s reliable guidance
- do not want to invest much time in trading at all, but consider it as a form of passive income
Whatever the reasons that led you to try social trading, the results will surely inspire you to keep doing it.
How Social Trading Works
The essence of social trading is very simple — you are joining the network of traders, which includes:
- experienced professionals
- regular traders who dedicate their time to the detailed study of this science and art at the same time
- enthusiasts-beginners, ready to try different strategies and develop their skills
There is continuous communication between all these traders, thanks to which knowledge is transferred and accumulated. But this is the theoretical part of training new traders. And there is also a practical one, thanks to which you can start earning immediately.
Copy Trading as a Practical Component of Social Trading
Remember how you learned to drive a car. Surely there was an attentive mentor next to you, who saved you from all possible mistakes in time. The essence of copy trading is the same:
- You choose a successful trader from a list of experienced professionals whose results you admire. Carefully study the statistics of all traders that the trading platform offers for copying. If you see steady growth in income and good performance, earnings are guaranteed to you as well!
- When you find the trader of your dreams, turn on the auto-copy feature. And then every time this trader opens and closes orders, they will be opened and closed for you.
- This is enough to start receiving passive income. But it’s better not to stop there. Study the strategies used by the trader, ask him and other traders questions. And then soon you will realize that you do not need anyone to start trading yourself.
What Is Important to Pay Attention to When Starting Copy Trading
- Trading is always associated with risks. Therefore, until you have learned how to properly manage them, it is better not to risk large sums of money. This is also reminiscent of the situation when you just got a driver’s license: over time, you will learn to fully control the car even at high speed, but it is better to start driving independently at low speeds. Therefore, invest in your initial social trading activities the amount of money that you will not regret if you lose.
- By choosing an experienced trader and starting to automatically copy all his trades, you will soon realize that even experienced traders are not always successful. Therefore, if a trader has a streak of bad luck, stop copying and analyze possible errors. And also carefully watch how he will turn his conditional “steering wheel” back onto the lucky streak. This will help you a lot later on when you start trading on your own.
An important advantage of social trading is that you have someone to lean on and ask all the questions that will bring you closer to independent practice. If over time you see that another trader’s statistics are more impressive, feel free to change the trader whose strategy you are copying. And always analyze what works and what doesn’t. This is how true masters become.