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Frequently Asked Questions
What should be considered when copy trading?
Your success depends on the expert you are copying. No trader is perfect when it comes to knowing how the market will move, or when to buy or sell, or what altcoins are a good investment. Always maintain enough funds to copy the trades. One of the most common mistakes made is to trade with funds insufficient enough to generate a profit after exchange trade fees and subscription fees are considered. A 10% gain on a $5,000 investment vs. a $500 investment. The former would pay for the monthly subscription fee with one trade; whereas it would take considerable more trades to cover fees with the latter.
So determining your goals and having realistic expectations is important. Is your goal to withdraw profits realized? If yes, then better to start with a larger balance. Is your goal to accumulate and build your portfolio for future gains? If yes, then each gain will serve to increase the base amount trading with the result being a larger balance over time which hopefully also increases in value as the price rises.
Is it profitable to trade crypto?
Traders all over the world engage with cryptocurrencies on a daily basis and generate significant profits from a number of strategies that range from being relatively basic and easy to execute – to the very complicated and resource-heavy. If your goal is to make yourself truly self-sufficient and consistently profitable; be prepared to immerse yourself in video lessons, real-time trading videos, trading courses, chart pattern libraries, and more. While being able to generate profit in the cryptocurrency market is something that almost anyone is able to do, being able to use a range of different strategies to maximize the profit which is generated is something that takes in-depth learning and knowledge of cryptocurrency trading.
Losing money trading crypto is easy. Too easy, without an understanding of the variables that affect price movements outside of technical analysis or fundamentals. There are a number of reasons why cryptocurrency keeps its value and over the long term increases in value, often quite significantly – or doesn’t. Cryptocurrencies are significantly more volatile than traditional assets such as stocks and forex, and that factor can lead to higher risk, as well as higher profits.
The most basic way to generate income is to develop strategies that reliably and regularly lead to profit. The most basic approach is to learn to identify points at which the price is going to go up, then buy or open long positions or identify points at which the price will go down and either sell or open short positions. Crypto traders may create positions that last anywhere from a few milliseconds to a few hours, days, or weeks. The market changes at warp speed and traders must be in a position to move quickly in order to take advantage. Ultimately, this means you should have a large amount of free time, which most of us don’t.
Is it easy to trade crypto?
The basics of crypto trading can be understood by anyone, but the risks and nuances of trading take months, if not years, for most to fully understand and make trading profitable. Although crypto traders that have been trading for years may be generating profit today, most will tell you that was not always the case. Every trader experiences losses on the path to developing winning strategies.
Cryptocurrency trading is a highly-stressful activity and this stress is best managed through knowledge. While trading can generate high profits, and levels of income substantially higher than an average day job – many only manage to lose money in the crypto market. Make no mistake, it is not easy to generate unprecedented levels of wealth without assessing the ways to generate profit in the crypto market properly.
What is copy trading?
Copy trading is when one trader’s positions are copied by another trader’s exchange account when trades are opened or closed. The trader being copied is unaware of the copier’s account balance and unmindful of anything but their own profitable strategies. The copier is merely copying everything the trader does, and when there is a win, the copier gains – when there is a loss, the copier loses. Hence it is important that the trader your copy is a professional with proven strategies and proper risk management skills. Otherwise, both the copied and copier lose money.
There are two methods used to copy a trader, manual or automated. Manual copying is when the trader broadcasts there positions, and other traders copy these signals in their own accounts. Automated copying handles the trade execution for the copier using software and API Key connection to the copier’s account. In either case, the trader being copied is unaware of the copier’s account balance and has no access to funds.
Copy trading is popular for Forex or Crypto trading and can be a good strategy for beginners looking to gain exposure to what trades the experts are making, and when. An expert trader can help diversity your portfolio in markets that you are unfamiliar with, but seek exposure to without doing the research initially yourself. Researching the coins traded by the expert can give insight into what markets are profitable.
What does copy trading allocation mean?
Allocation settings allow the copier to control how much of their balance can be used to copy trades. Expert traders do not use 100% of their portfolio when making trades – they will execute each trade using a small percentage of their overall balance. Additionally, copiers can set a specific amount of their own account that is used to copy an expert trader. For example, if an expert trader uses 5% of his USDT (Tether) in a trade; and the copier has set account allocation to 50% of his balance; then only 2.5% of the copier’s USDT balance would be used to copy the trade executed by the expert. The only caveat is to ensure you have enough funds in your account to copy the expert’s trades, and the funds the trader uses as his base currency which is typically BTC, USDT, or ETH. Should your funds be insufficient, your account simply would miss the trade – as nothing would be copied.
Leveraging an expert trader’s investment knowledge and experience is the goal. As time goes by and you assess the expert’s ability, you can adjust the allocation to use more, or less, of your total account balance.