Is copy trading a good idea?

Forex trading sounds like something extremely complicated. But do you know one does not have to be a trader to profit in the currency market? There is a strategy called copy-trading. This strategy simplifies deals on the Forex market by copying successful deals from one account to another. Let’s find out more.

The basic principles

Copy-trading or transactions copying is a form of automatization on stock and currency markets. Thus, it is made by duplication of deals from one trader (a supposedly successful one) to your account. But how can we make it real?  Following that, all the lucky moves will be automatically duplicated on the user’s account.

One can duplicate all actions in full volume, or set some limits, like the number per day or the share of the deposit.

It is not for free. Obviously, a trader wants to have his reward and he gets it in form of a certain interest on profit or a fixed cost of his services per month/annually. The platform itself also has its interest, for example, in form of a subscription. In a nutshell:

Let us assume, as an example, that John is a successful trader, well known for his lucky trades in healthcare assets. He becomes popular and may allow others to copy his trades. Matt likes John’s performance, so he decides to copy his style and automatize this process; now every position opening and closing that John does is also done by Matt.

The advantages

1. Efficient strategy

Efficiency is the most important characteristic. By copying traders’ actions you automate the whole process. Since you trust a professional, you can just sit and watch: one by one, the trades will complete themselves.

2. Learning from others’ success

Apart from saving time, let’s consider the previously unknown market expertise that you gain access to by using a copy trading app in Nigeria. It allows you to take advantage of another trader’s insightful knowledge of particular markets that you haven’t dealt with before.

3. Exploring new markets

With this technique in your investment strategy, you will continually grow and develop.

Namely, you can utilize this advantage to put trading on “autopilot,” or to explore currencies you never dealt with before; both are possible.

Pros and cons

Pros:

• No expertise cap

Profit from deals regardless of your skill level. Let savvy experts do their job and behold the spectacle.

• A big number of options

Choose a trader from hundreds of experienced professionals.

• Free up some time

Stop wasting so much time, let others do that for you.

• Multi-trading

You select several signals, as many as you wish. In this way, one can diversify his risks.

Cons:

• Dependency

Currency exchange is ambiguous and volatile. Despite good indicators and profitable deals, at some point, anyone goes into deficit.

• Loss of skill

Every time someone copies other people’s trade, he loses acumen. One doesn’t observe the market as thoroughly, doesn’t make mistakes, and doesn’t apply comprehensive analysis. Skills are degrading and the brain weakens with no constant work.

Summary

Like other ways of trading, this strategy deserves to exist. Especially relevant this strategy will be for newcomers without much experience. Thus, a beginner will get a chance to practice it while watching real trading geniuses. Even though the method does not give a full guarantee of success, one can obtain valuable experience and earn money at the same time.