When entering new territory, it’s always reassuring to have someone with you that knows the field. For many, taking those first steps into the trading sphere can be a little daunting, but fortunately, it’s now easier than ever to learn directly from the experts.
Thanks to copy trading, new investors are getting a more confident start to their trading journey. As a quick recap, copy trading is just what it sounds like: it allows individuals to copy the trades of other investors.
Unlike mirror trading, copy traders are blind to the actual strategy (i.e. you watch the transactions, and not the layout of the process), but they can still gain experience by watching others trade.
Over time, copy trading has grown from being a trading method to a trending one. Today, more new investors are engaging with copy trading for its various perks, which help to give learners the best possible start.
So what is it about copy trading that has made it so popular?
Learning from the best
For new traders especially, copy trading can be a great way to see what makes good traders successful. With copy trading platforms, you can simply do what the experts do. In some cases, discussions will simultaneously take place on social media, so you can learn the whys and hows of each decision. This can be a really effective way for new traders to learn – and maybe become traders-to-copy themselves!
Of course, you might wonder what’s in it for the experts; usually, platforms will pay traders-to-copy when people mimic their trades.
Avoid rookie mistakes
By following experienced traders, new investors can learn to trade without making common beginner mistakes. There are many valuable lessons to be learned from knowledgeable traders, such as the importance of having a diversified portfolio, as well as how to think with your head and not your heart.
Having said that, you must be mindful that an experienced trader is not a psychic (!), so you can’t be certain that each of their trades will be lucrative or risk- and mistake-free.
Saving time and effort
If time is money, then copy trading is a worthy investment. By bypassing the bulk of the work, copy traders can get started straight away, even with a limited trading knowledge.
For those who are eager to become an expert themselves, this free time could be spent reading up on copy trading blindspots. This includes understanding fundamental and technical analysis or learning to devise your own strategy. The added bonus of having copy trading experience is that you already understand the basic transactional framework of trading, so you can move on and flesh out your knowledge more efficiently.
Copy trading offers new traders a simple and effective way to get into trading, without excessive risk. For inexperienced traders, copy trading provides an option to learn while doing, while also avoiding mistakes that could cost them. What’s more, copy trading offers an easy route into trading that gives new practitioners a chance to do their research without having to halt their inclination to trade.
If you’re looking to get started with copy trading, sign up to a Eurosocial account today!