There are several social trading platforms which offer you the opportunity to replicate the trades of others. As its name suggests, copy trading allows you to mimic the trades of more experienced traders. You can link your profiles with that of others. By copying the trades you can mimic all their positions in the market. If they open a new trade then your trade will also be opened, if they close it your trade will also be closed. Each and every move of the trader will be copied. If they win you will win and if they lose you will lose. However, it does not really mean that you won’t really have any control over your trade. There are several platforms which allow you to monitor your trades after you have established a connection on these platforms.
What is Copy Trading?
Copy trading has emerged as a popular phenomenon owing to the fact that it enables even novice traders to make a foray in the world of trading. Gone are the days when you had to research thoroughly on the world of Forex trading, study charts and analyze market conditions in a bid to place your trades. You can track the trading records of the leaders of the trade and choose whose trading moves you want to copy. Needless to mention, traders with better trading performances have greater chances of gaining more followers on this platform. The platforms with copy trading facilities allow you to replicate trades automatically. It means once you have linked your portfolio with that of the leaders their moves will automatically be copied to your account- even when you are not present in front of the screen. Please visit mocaz.com in order to find out more about copy trading.
Should you practice copy trading without educating yourself about the market?
Though it seems extremely easy to churn out profits with the help of copy trading, experts still suggest that traders conduct some research on ways in which things work in the trading world. Invest time in educating yourself about the following aspects of trading:
- Basic techniques of forex trading
- Market structure
- The role of money management in influencing the implementation of technical strategy
The more you educate yourself about the functionality of platforms like these, the easier it becomes for you to gauge the credentials of traders whom you want to follow. When it comes to normal trading, you will be required to study and analyze the market graphs before placing your moves. You need to carry out similar kind of research when it comes studying the background of traders or leaders. In copy trading you can invest a part of your portfolio in a certain leader. Most of the platforms out there do not really allow you to invest more than 20% of your portfolio in a single trader. This is to ensure that you get as the maximum possible opportunity to diversify. At times, the records of traders might just as well overwhelm you thereby making it difficult for you to consider that these utterly successful traders might end up hitting a rough patch at some time or the other as well. So, it is important to spread your investments equally among several successful traders.