Ever wanted to start trading online with friends? Take a look at the copy trade | News from the region
Fancy trying something new online with your friends this spring that can not only bring out the good old Aussie competitive spirit, but could, with practice, create new opportunities to earn some extra money? We’re talking about online trading – FOREX, stocks, even crypto – but with a big difference.
Now, before you completely switch off with all that financial stuff that’s normally reserved for those Pitt Street banker types, there’s an easier way to trade online that blends social media and e-commerce with some clever technical stuff. background. This is the idea of copy trading, sometimes called social trading.
Copy trading is a type of trading that allows traders to copy other successful traders. In this way, copy trading takes the guesswork out of online trading for beginners and makes it easier for newbies to start trading. So let’s take a closer look at the copy trade, how it works, the pros and cons and how to get started – safely.
How Does Copy Trading Work?
Copy trading platforms like Avatrade in Australia act as an intermediary between traders and investors. When you sign up for a copy trading platform, you will be able to see other users’ portfolios and trading histories. You can then decide which users you want to follow and copy.
So when you copy another user, all their trades will be automatically executed on your account. So if they make a profit, you make a profit. If they lose money, you lose money. It goes without saying that choosing the users you want to copy is crucial!
Fortunately, most copy trading platforms have built-in filters that allow you to narrow down your choices. For example, you can filter by things like average monthly return, risk level, etc.
The benefits of copy trading
One of the main benefits of copy trading is that it allows traders to tap into the collective wisdom of a much larger trading community. By tracking and copying the trades of other successful traders, copy traders can increase their chances of success, taking some of the guesswork out of decision-making.
Additionally, copy trading can provide traders with insight into the strategies and techniques that other successful traders are using. This can tend to lead to increased profits, as successful traders tend to generate consistent returns over time.
It goes without saying, however, never approach the copy trade blindly. There are always risks, as with any form of trading – so choose your copy partners very carefully.
Overall, copy trading can be a great way for new traders to learn the ropes and better understand how online markets work.
The disadvantages of copy trading
Copy trading is a relatively new phenomenon in the world of trading, and it has already proven to be a bit controversial. One of the concerns is that copy trading can create a herd mentality, where traders blindly follow the lead of others without doing their own research to understand why the trade happened in the first place. This could lead to poor trading decisions and ultimately losses if the market suddenly turns against you.
Even the best traders can lose money under these circumstances. Another concern is that trade copying networks can become fertile ground for fraudsters preying on unsuspecting merchants. So always make sure you are trading with a respected and highly rated platform like Avatrade. Another thing to be wary of is that copy trading can also be very addictive, leading to traders spending hours scrolling through trade feeds trying to find the ideal trades.
While there are certainly risks associated with copy trading, with careful research and a healthy dose of caution, copy trading can be a valuable tool for anyone looking to start trading the markets online.
How to start with copy trading?
First and foremost, you need to make sure that you are signing up with a reputable company that has been around for a while, provides a secure trading platform, and has all the necessary certifications and licenses. Also find out what others have to say about the site by reading their reviews.
Once you’ve decided on a platform, it’s time to create an account and learn the ropes. Before going live, make sure you fully understand the ins and outs of trading.
Then open a demo account. If you have never traded before, a demo account is an indispensable tool to allow you to practice without putting your own money at risk. Before you start trading with real money, this is a great way to familiarize yourself with the platform. This gives you the chance to really understand if trading is for you.
One last tip, once you start trading or copying, trade in small amounts to begin with. If you make mistakes early on, at least they won’t be costly mistakes.
So if you and a few friends want to try something new this spring, online trading presents some interesting ideas and copy trading gives you an easy way to enter the world of those Pitt Street bankers – and who knows with the right copy trading strategies you might even surpass them!.
Please note: Online trading can be high risk. Never trade with funds you cannot afford to lose and if you have any doubts about copy trading, please speak to your financial advisor
- This information is of a general nature only and should not be considered specific to any particular situation. Readers are encouraged to seek appropriate professional advice based on their personal circumstances.