A lot of trading platforms offer copy trading. With copy trading, you follow one or more ”masters” and their trades (the acts of opening och closing positions) are copied in your investment portfolio. You can spend time with your dog while the copy trading makes money for you.
Exactly how rigid the copy process is vary, depending on which broker, platform and services you select. It is important to know what you want, otherwise the process of selecting broker/platform/services can become quite overwhelming.
- Some followers wants the software to automatically copy the master´s trades, instantly and without any adjustments.
- Some followers want the software to automatically copy the master´s trades instantly, but they also want to be able to set certain parameters when they start following someone, e.g. to limit how large the trades can be or exclude certain asset types.
- Some followers are willing to accept delayed execution of trades, if it allows them to be more hands-on and both check and (if necessary) adjust a trade before it is carried out. If you belong to this group, you should also check out the concept ”trading singnals” since it might be more to your liking than strict copy trading.
Make sure you follow masters who have the same risk willingness as yourself, or create a mixed portfolio by following masters with various risk levels to get the overall risk level on par with your own preference.
What assets are available?
A wide range of asset types are available for copy trading online, such as:
- Company shares
- Exchange traded funds
- Foreign currency
It is very easy to start following a myriad of masters, and this can tempt a novice trader to open positions for a wide range of asset types simultaneously. It is better to start slow and expand gradually, as you progressively learn more about various assets, markets, etcetera. Even when we follow masters, it is a good idea to know about the fields we are in. After all, you are still in charge of selecting the masters and you need to be able to evaluate.
Is cryptocurrency copy trading possible?
Yes, some platforms offer cryptocurrency copy trading. Both crypto-crypto pairs and crypto-fiat pairs are available for copy trading. Examples of available cryptocurrencies are Bitcoin, Litecoin, Ripple and Ethereum.
If you are interested in cryptocurrency copy trading, you can for instance check out eToro, Coinmatics or 3Commas. Coinmatics and 3Commas are more specialized in cryptocurrency, while eToro is more of a broader broker/platform with a strong emphasis on various forms of social trading.
Important: Some platforms do not offer cryptocurrency trading outright, but you will be able to use Contracts for Difference (CFDs) copy trading to gain exposure to cryptocurrencies.
Can I do copy trading on my mobile phone?
Yes, copy trading is possible on smartphones and tablets. Click the link to find UK Copy trading broker that feature mobile trading. Make sure you select a broker/platform with a high quality interface for mobile trading. Apps are available for both iOS and Android.
Many brokers that offer copy trading also offer leverage. When using leverage, you borrow money from the broker to complete your trade.
Example: You want to copy a purchase of 30 shares, but you only have enough money in your account to purchase 10 shares. By using leverage, you can borrow the rest of the money from the broker and go through with the 30 share purchase.
Leverage is of course very risky, since you are risking borrowed money. You can end up losing more money that you ever had in your account.
Also keep in mind that many brokers who offer leverage will put automatic stop-loss orders on your assets if you use the offered leverage.