A lot of new traders struggle with finding a successful trading strategy and being profitable. However, copy trading promises to fix that. But is copy trading worth it, and does it work?
Copy trading is worth it, and it really works. Newbies all over the world are making money with copy trading. Copy trading is an excellent long-term trading strategy that is profitable regardless of your level of experience. If you pick the right trader to copy, you can make a nice profit.
In today’s article, you will learn whether copy trading is worth it and whether it works or not. There is a lot of confusion about copy trading, so we hope this article helps you. 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
Does Copy Trading Really Work?
Yes, copy trading really works. However, to understand why it works, it is essential to first understand what copy trading is all about and why you might want to get started with copy trading.
Copy trading is a trading strategy that involves copying the trades of a successful trader in real-time. For example, if the trader buys X shares of Y stock, you will do the same. If they sell a cryptocurrency when the price is high, you will do the same. If they buy a cryptocurrency when the price is low, during the dip, you will do the same, trusting that the trader expects the price to go up in the future.
It works because you don’t have to have any experience to do it. You don’t have to go through years of trial and error to learn what works and what doesn’t. You don’t have to take courses or read books that explain how the stock market works. You don’t need to learn various forex and stock trading strategies or how to use indicators. You don’t need to lose money while learning how the market works.
Copy trading works for everyone, not only beginners. However, it is often beginners who can benefit the most from copy trading, as they are the ones who are most likely to lose money if they were to trade themselves, without copying the trading of a successful trader.
Also, copy trading is great for busy people who want to make money in the stock market but do not have the time to trade themselves. Day trading, and even regular trading, can be very anxiety-inducing. You are always checking your stocks to see whether they have gone up or down and whether you should buy or sell stock quickly before it is too late.
With copy trading, you don’t have to worry about any of that, as you can trust the trader to make the right choices.
Is Copy Trading Worth It?
The answer to this is generally yes, but it depends on who you copy and how much money you put in. You need to put in enough money to make a nice profit, but you also don’t want to put in too much, depending on the risk profile of the trader you are copying. If the trader you are copying has a low-risk profile, you can safely put in more money without worrying too much about losing your investment.
On the other hand, if the trader you are copying is making very nice profit margins but has a high-risk profile, you might want to consider investing less money. You might want to do this, especially if you are trading forex, CFDs, or crypto instead of stocks. Those types of trading carry the most risk.
For the most part, however, copy trading is very worth it if you choose the right trader. If you do your research right, you can avoid traders who make copy trading not worth it. Avoid traders, for example, that do not have a very long track record of success. Also, avoid traders with a very high-risk profile, even if it seems that they are making a lot of money. It is just not worth it to take that risk upon yourself.
What Are the Risks of Copy Trading?
As with any type of investing, copy trading is not without its risks. However, the main risk comes when choosing to copy the wrong trader. If you make a mistake and choose a trader just because it looks like they are doing well now, but it turns out that they don’t have a long-term strategy, you can lose money.
Another risk is that the stock market might go into recession. If you are trading in forex, unpredicted political incidents can change the course of a currency pair. Still, a good and experienced forex trader will always be updated on these kinds of news updates and buy or sell currency pairs accordingly. A sudden bear market can occur in the crypto market, but again, a good crypto trader will predict this, as it usually happens after a bull run.
Another risk is when you invest in a copy trading platform that has high transaction fees. These fees can eat into your profit. The same goes for copy trading platforms with bad spread rates. You should always be on the lookout for hidden fees and bad spread rates when copy trading.
Even the best forex traders can experience losses. However, if you do your homework and look for a trader that has had experience, year after year, for many years, you will most likely earn money in the long run. That trader knows what they are doing and how to react to sudden market changes.
Are Newbies Earning Money With Copy Trading?
The answer to these questions is a resounding yes! Newbies from all walks of life, including those who have no experience trading and those who have no time to trade themselves, earn profits every year from copy trading. It’s hard to say exactly how many traders are making money with copy trading, but one thing is clear: copy trading is one of the best and most effective ways to earn money as a newbie or busy person.
How Much Can You Earn With Copy Trading?
That depends on you. If you find a good trader to copy and invest a nice sum of money, you can earn more. For example, if you find a trader who has been earning a 20 percent return in the forex market year after year, and you invest just $2,500, you can earn $500. That’s just starting. As your account grows year after year, you will earn more money. For example, by the second year, you will have $3,000. Twenty percent of that is $600.
Can You Do Copy Trading Long Term?
If the trader you are copying uses strategies that work long-term, you can use copy trading as a long-term strategy to make money in the stock market or forex market. Copy trading is just like regular trading, except that you are not the one deciding what to buy and sell and when to do it. You can be successful in trading long term, so there’s no reason you can’t be successful with copy trading long term.
Watch this video to learn more about making a full-time living long-term with copy trading:
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
Coy trading works, and it is worth it. You can even use it to make money in the market in the long run without knowing any trading strategies yourself or having time to trade yourself.
Newbies are making money with copy trading without any prior experience. Make sure to pick the right trader and invest the right sum of money. Stick with it in the long run, as that is how you will make the most money.
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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