The financial market can be very confusing and daunting for beginners, especially. However, copy trading promises to be a solution – a way new traders can make money in the financial market without knowing anything about different trading strategies. But can you make money copy trading?
You can make money with copy trading, even if you have no previous trading experience. The best way to ensure success is by using a reputable trading platform, choosing a successful trader to copy, and investing at least $2000. With a 20% return on $2,000, you can make $400 in just one year.
Today, we’ll prove that not only can you make money copy trading, but we’ll also show you how. Let’s get into it!
IMPORTANT SIDENOTE: I surveyed 1500+ traders to understand how social trading impacted their trading outcomes. The results shocked my belief system! Read my latest article: ‘Exploring Social Trading: Community, Profit, and Collaboration’ for my in-depth findings through the data collected from this survey!
Table of Contents
Is Copy Trading Hard To Do?
Copy trading is not at all hard to do and, in fact, is incredibly simple. Unlike regular trading, you don’t have to monitor the market 24/7 or guess which stocks are on the rise. With copy trading, you can automatically make money in the forex market by simply copying the trades of a skilled trader. If you have money to invest, you’re already ready for copy trading!
Does Copy Trading Take a Lot of Time?
No, the answer is again no. You don’t need to spend a lot of time on copy trading to ensure success. On the contrary, copy trading is perhaps one of the best ways for busy people to make money in the market.
That’s because you don’t have to do any trading yourself. Once you have your copy trading account set up, it will do everything else for you automatically.
Copy trading lets you earn passive income, which essentially means making money without doing anything (sleeping, eating, the whole nine yards). The only exception is if you’re trading traditional stocks, in which case, you’re subject to the stock market’s opening hours.
The forex and crypto trading markets have no closing hours, so as long as the trader you are copying is making logical trades and earning a profit, you can follow in their footsteps.
If you’re wondering who copy trading is good for, here’s a look:
- Students who have no time to trade because they are studying for an exam
- Businessmen, working professionals and CEOs who want to make money in the stock, crypto or forex market by trading but do not have the time to trade
- Parents who are busy taking care of their kids and want to make money on the side
- Freelancers who are busy doing work for clients but who want to earn passive income
As you can see, ordinary people who live busy lives can benefit from copy trading. You don’t even have to check your trading account regularly. Just put money in your account and let your trader do the dirty work for you!
Why Would the Trader Care?
Traders on platforms like eToro’s copy trading platform get paid for letting people copy them. But remember: these traders also have their own money in the market and are looking to profit. That means they have a vested interest in ensuring that both you and them are in the green.
How To Make Money With Copy Trading?
To make money with copy trading, you need to do three things:
- Invest a decent sum of money.
- Choose the right trading platform.
- Choose the right trader.
Let’s explain how to do each.
Invest Enough Money
You need to invest a decent amount of money if you want to earn even more with copy trading. If you only have $200 to invest, that is okay. You won’t make as much money as you would if you would invest $2,000, but anything is better than nothing!
You can also use the money you earn to reinvest in copy trading so that you keep growing your account, even if you started with just $200. In other words, a few years down the road, you will have a lot more than $200 in your account.
However, I would suggest investing more than $200 if you are serious about copy trading. But don’t invest all of your savings, as it is essential to diversify your income.
Save some money in an emergency savings account, for instance. You might also want to diversify your copy trading investments. For example, invest some money in forex and a little in crypto too.
Choose the Right Trading Platform
It is essential to choose a good trading platform. After all, some copy trading platforms will charge you double or even triple the normal transaction fees, and they will do something similar when it comes to spreads. A good copy trading platform will have transaction fees and spreads similar to regular trading platforms.
Choose the Right Trader
Finally, you need to copy the right trader. Your trader’s success is your success. So if they don’t know what they’re doing and land in the red, you’ll follow them right down. The opposite is true too, which is why it’s crucial to choose a trader successful in forex or crypto for years.
Consider each trader’s portfolio before you decide to copy them. If they have too much of their portfolio in crypto assets, for example, you might worry that they have a high-risk profile, and that worry would not be unfounded. If they are taking a lot of risks in their trading strategy, it might not be best to copy them.
On the other hand, a trader who is not taking any risks will likely not earn as much money, though it might be a safer investment. It is good to aim for a middle ground – a trader who has a low to moderate risk profile but is also earning a nice return year after year.
How Much Can You Make With Copy Trading?
That isn’t too hard to calculate!
Consider how much you plan to invest and then multiply it by the return percentage the trader has been earning, on average, for the past 3-10 years. If the trader has been earning a return of 20 percent and you invest $2,000, you should earn a return of $400 in the first year. That is unless you continue investing more every month, in which case you will pull in even more.
So, after the first year, you will have $2,400 in your account. At that rate, you will earn $480 in the second year. And so it will continue, year after year. That is known as compound interest, and it is why you can start with a small investment and end up with a lot more after many years.
Will Copy Trading Make You Rich Quick?
While you can earn money with copy trading right away, it is not a get rich quick scheme. As I mentioned in the previous section, as your account grows, you will start earning more money, year after year. That is why you need to be patient and let your account grow. Don’t withdraw your earnings right away, or else you will not earn as much money from compound interest. That is a common mistake beginners make all the time, so I want you to know about it.
Author’s Recommendations: Top Trading and Investment Resources To Consider
Before concluding this article, I wanted to share few trading and investment resources that I have vetted, with the help of 50+ consistently profitable traders, for you. I am confident that you will greatly benefit in your trading journey by considering one or more of these resources.
- Roadmap to Becoming a Consistently Profitable Trader: I surveyed 5000+ traders (and interviewed 50+ profitable traders) to create the best possible step by step trading guide for you. Read my article: ‘7 Proven Steps To Profitable Trading’ to learn about my findings from surveying 5000+ traders, and to learn how these learnings can be leveraged to your advantage.
- Best Broker For Trading Success: I reviewed 15+ brokers and discussed my findings with 50+ consistently profitable traders. Post all that assessment, the best all round broker that our collective minds picked was M1 Finance. If you are looking to open a brokerage account, choose M1 Finance. You just cannot go wrong with it! Click Here To Sign Up for M1 Finance Today!
- Best Trading Courses You Can Take For Free (or at extremely low cost): I reviewed 30+ trading courses to recommend you the best resource, and found Trading Strategies in Emerging Markets Specialization on Coursera to beat every other course on the market. Plus, if you complete this course within 7 days, it will cost you nothing and will be absolutely free! Click Here To Sign Up Today! (If you don’t find this course valuable, you can cancel anytime within the 7 days trial period and pay nothing.)
- Best Passive Investment Platform For Exponential (Potentially) Returns: By enabling passive investments into a Bitcoin ETF, Acorns gives you the best opportunity to make exponential returns on your passive investments. Plus, Acorns is currently offering a $15 bonus for simply singing up to their platform – so that is one opportunity you don’t want to miss! (assuming you are interested in this platform). Click Here To Get $15 Bonus By Signing Up For Acorns Today! (It will take you less than 5 mins to sign up, and it is totally worth it.)
Conclusion
As you can see, copy trading can be very profitable, even if you do not have a lot of money to invest upfront. The more you invest, the more you will earn. But you can still earn a lot of money with even a small investment, as long as you have the patience to wait until the effects of compound interest kick in.
BEFORE YOU GO: Don’t forget to check out my latest article – ‘Exploring Social Trading: Community, Profit, and Collaboration’. I surveyed 1500+ traders to identify the impact social trading can have on your trading performance, and shared all my findings in this article. No matter where you are in your trading journey today, I am confident that you will find this article helpful!
Affiliate Disclosure: We participate in several affiliate programs and may be compensated if you make a purchase using our referral link, at no additional cost to you. You can, however, trust the integrity of our recommendation. Affiliate programs exist even for products that we are not recommending. We only choose to recommend you the products that we actually believe in.
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