What is Copy Trading Strategy? Let’s start with simple. Copying in exams can be unethical, but copying in trading is totally fine. Yes! You heard it right. You can’t just take benefits to cheat on exams; it also has high potential in the trading arena. And do you know what the plus point is? You won’t have to feel ashamed or scared to get terminated, but the trader will invite you to copy his strategies.
I am sure you’re getting curious with every passing moment. So, without further fuss, let’s dig deeper into what copying trading is!
What Does It Mean By Copy Trading?
It’s not copying trading or traders, but Copy trading is a type of trading that allows you to take the position of an experienced trader in real-time. To be more precise, it is a type of trading in which a trader, also known as the “follower,” copies the trades of another trader, also known as the “leader,” in real-time. The follower’s account is automatically updated with the leader’s trades, which are executed based on the follower’s performance. Online brokerages typically offer copy trading and are often associated with social trading and mirror trading.
If we compare this trading type with other tradings, Copy trading seems much more beneficial. It allows traders to benefit from the knowledge and expertise of successful traders without spending time and effort to research and analyze the markets themselves. It can also provide insight into different trading strategies and techniques for new traders by allowing them to interact with more experienced traders. Additionally, copy trading allows traders to diversify their portfolios and increase their profits by following a range of successful traders.
The Main Strategies Of Copy Trading
Copy trading can’t work with random techniques or strategies of successful traders, but it has its own proper principles. While doing this, you have to follow the rules of traders but also have to obey how to copy trading works itself. Potentially, all your trading strategies will be wasted if you do not do this.
Hence, there are two main principles that copy trading works on;
- Automated Copy Trading
- Manual Copy Trading
Automated Copy Trading
It’s as simple as copying someone’s homework; what he wrote, you write. In trading terms, what he trade, you trade. Let’s not make it more complex, as automated copy trading is all about trading that automatically allows you to replicate other traders’ trades on a platform. When a trader opts to use automated copy trading, their trading platform (like ZuluTrade, eToro, Etrade, etc) will automatically execute trades on their behalf based on the signals generated by the trader or algorithm they are copying.
This can be a valuable tool for traders who are new to the market and are looking for guidance, or for traders who want to diversify their portfolio by following multiple veteran traders. However, it is essential to note that automated copy trading carries its own set of risks, and it is not suitable for all investors. It is necessary for traders to thoroughly research and carefully select the traders whose trades they want to copy and to carefully monitor their copy trading activity to ensure that it is consistent with their own risk tolerance and investment goals.
Manual Copy Trading
This principle of Copy trading works on whether you want to follow the trader or not in real-time. It’s also not as risky as automated trading since you’re not copying the trader blindly, but if you do this, it’s likely possible that your trading investment will be in vain. However, to be on the safe side while trading manually, don’t fall for every trader who proclaims himself an “expert”. Make sure to check his trading history or recommendation section thoroughly; this will help you save your hard-earned money from social media scams.
Traders To Copy For Copy Trading
To copy the trader, you must first choose a platform (broker), and for your comfort, we have already chosen eToro with a thorough analysis of its algorithm and performance. eToro is widely recognized as the premier platform for copy trading, and its traders are among the most competent and experienced copy traders. So, let’s look at the top four traders you can copy on eToro;
1. Jeppe Kirk Bonde
This is one of the most veteran traders with a strong background in finance as a Strategy Consultant. With the trading profile, it’s concluded that this trader correctly analyses the markets, politics, tech, and social trends to decide what should be an investment to create a diversified and robust trading portfolio. As a cost-saving strategy, they also appear to overlook leverage, short positions, and high-fee instruments.
Furthermore, due to the hedged trading portfolio, many of the biggest tech companies have been advised by them. The biggest holdings currently included in their portfolio are Amazon((3.78%), Auribis(3.94%), BarrickGold(3.71%), etc. If you want to open a copy with this trader, you must invest at least $600, which is the same every time.
2. Christian Kongsted (CPHequities)
He’s a former chess player and a veteran Danish scrabble champion with more than 15 years of experience in investing. Christian focuses on Tech and Growth stocks while trying to keep his risk score low which is five; his professional background helps him invest in a broad range of categories. Right now, as per the profile, they spread investments and risks across a range of assets, including stocks, commodities, forex, and cryptocurrency.
The biggest holding in their portfolio includes Alphabet (9.04%), Microsoft (8.42%), Apple (7.96%), etc, which indicates how much they are credible to copy. Copying their trades costs $600 and requires a minimum of three years, but they understand the investment risks.
3. Heloise Greeff
She trades under the name “rubymza” and has a most sought-after trading profile. She has an MBA from the University of Oxford in the UK, specializing in machine learning. Heloise used her educational background and mixed it with fundamental analysis, which helped her focus on global equities with the potential for future growth. Her performance over the last two years has been so rocky as she got a return of 20.98%, which makes her so credible to mimic for trading.
Despite this, the trader suggests having at least $1000 to open a copy trading account with her.
4. Richard Stroud
Despite being a relatively new investor on eTrodo, this trader already has an impressive profile. Richard invests in equities, choosing firms that he believes are inexpensive or have the potential for future development. They mainly trade with buy and hold strategy and keep diversifying their portfolio per the market’s financial condition. The robust portfolio has top-notch holdings, including Citigroup (4.73%), Target (3.52%), Legal & General (3.24%), etc. You should hold your copy for at least one year, according to this trader by investing as little as $500.
That’s all about the traders to copy for copy trading. Indeed, it’s beneficial to make maximum returns by mimicking another veteran trader, but it also requires adequate research on your part. Happy Trading!