As the complexities of modern life continue to pile on, copy trading has emerged as a game-changer for individuals. This innovative strategy allows traders of all levels to mirror the moves of experienced investors, combining the art of learning with the potential for earning.
Whether you're a novice in the financial markets or a seasoned investor seeking time-efficient strategies, copy trading offers a unique blend of simplicity, learning, and opportunity.
Discover the world of copy trading and its benefits.
What is copy trading?
Copy trading is a trading strategy that allows individuals to automatically copy positions opened and managed by another trader, called a signal provider. This method enables inexperienced traders and those pressed for time to replicate the trades of others, thereby gaining the opportunity to learn from experts and potentially profit from their experience and knowledge.
When a trader whom you choose to copy opens a position, the same position is automatically opened in your account, with the volume adjusted based on your chosen settings. In essence, copy trading makes the financial markets more accessible for newcomers who lack the time, expertise, or resources to analyse the markets.
Copy trading vs. CFD trading
Copy trading and manual CFD trading are popular strategies for traders, despite catering to different needs and experience levels. Copy trading is the act of replicating another investor's trades, offering a more passive investment approach. It's particularly appealing for those who prefer a hands-off strategy or are still learning the ropes of trading.
In contrast, manual CFD trading involves more active management of trades, requiring a comprehensive understanding of the markets, as it allows individuals to speculate on the rising or falling prices of fast-moving global financial markets. CFD trading provides flexibility and control, but it demands more time, knowledge, and risk management skills compared to copy trading.
Benefits of copy trading
Copy trading offers a suite of benefits that align with the needs of the modern traders. Here are some of the advantages when you copy trade:
Simplified decision making
The primary appeal of copy trading lies in its ability to simplify trading decisions. Instead of navigating the complex world of trading alone, traders can rely on the expertise of seasoned others. This approach is especially advantageous for those who may find the abundance of market data and analysis required for trading overwhelming.
Learning opportunity
Copy trading platform fosters a conducive environment for learning. It opens a window into the strategic thinking of experienced traders, offering insights into their decision-making processes. This provides novice traders with a practical education in market analysis and risk management, allowing them to build their own trading strategies.
Risk diversification
Copy traders are able to diversify their portfolios without the need to extensively study multiple markets. By copying the trades of different signal providers, copy traders can spread their risk across various instruments and trading styles. This diversification can help mitigate potential losses, particularly in volatile markets, such as forex and cryptocurrency.
Passive trading approach
In the 21st century, time has become a valuable commodity, if not overall a luxury that not everyone can afford to have. Copy trading caters to individuals who do not have the time, mental energy or resilience to dedicate to traditional CFD trading. It offers a more passive investment approach while still offering the potential for active market participation and profit.
Who is copy trading for?
Copy trading's versatile nature makes it suitable for a wide range of traders, each with their unique goals and lifestyles. If you relate to any of these profiles, then copy trading may be for you.
Novice traders
The journey into the world of trading can be a daunting experience for beginners. Copy trading serves as an ideal starting point, offering a hands-on learning experience without the pressure of making independent trading decisions. It's an opportunity to learn by observation, reducing the initial hurdles of market entry.
Busy professionals
Professionals engrossed in their 9-to-5 careers or managing their own businesses can have a challenging time maintaining a successful trading portfolio. Copy trading provides a solution that allows them to engage in the markets without the need to constantly monitor market fluctuations or spend hours developing and refining trading strategies.
Risk-averse traders
Copy trading carries a reduced amount of risk compared to trading by yourself. By choosing a signal provider with years of experience and a successful portfolio, you further decrease the risk you undertake. Copy trading presents a balanced approach for risk-averse traders as it enables them to leverage the expertise of traders who have a proven track record, thereby adding a layer of confidence to their decisions.
Emotional traders
One of the biggest mistakes to make when trading is to let their emotions run free, following market hype without logical grounds. By copying the trades of experienced traders, emotional traders can rely on the strategic decisions of others, reducing the chances of making impulsive or fear-based trades.
What is ThinkCopy?
Do you feel like copy trading is a great fit for you? We introduce you to ThinkCopy!
ThinkCopy is our specialised copy trading mobile app designed to seamlessly connect novice traders with experienced signal providers. Built with an intuitive, user-friendly interface, ThinkCopy simplifies the process of finding, following, and earning with successful traders.
With a low minimum deposit of $100, users can easily browse through a curated list of experienced traders, view their performance metrics, and start copying their trades.
How to choose the right signal provider
Choosing the right signal provider on ThinkCopy is a crucial step for potential success in copy trading. You want to choose someone who can reliably make successful trades. Here are the factors to consider when evaluating potential signal providers:
Performance history
Look for signal providers with a consistent track record of profitability. While past performance isn't a guarantee of future results, it can provide insight into the trader's expertise.
Risk management profile
Assess the risk level of the signal provider. Ensure their approach to risk aligns with your own risk tolerance and trading goals. For example, look at their average trade size and discern whether you’re comfortable with the amount of risk you will be exposed to.
Trading style compatibility
Consider the trading style and strategy of the provider. Whether you prefer long-term investments or short-term trades, make sure their approach matches your preferences.
Market diversity
To diversify your portfolio and decrease risk exposure, consider following multiple signal providers who engage in various markets and employ different strategies.
How to use ThinkCopy
Using ThinkCopy is a straightforward process. Simply create an account on ThinkPortal and download ThinkCopy on your mobile device of choice. Once your account is set up, watch our ultimate guide on how to use ThinkCopy here.
How to find a Signal Provider
- Click the ‘Discover’ tab.
- Type the username of the signal on the search bar.
- Alternatively, scroll through the ‘Discover’ tab to see a list of signal providers.
Assess signal providers based on performance, strategy, and risk level. Consider factors like historical returns, trading style, and number of followers to find a Signal Provider that aligns with your risk profile.
How to copy a Signal Provider
- Find a Signal Provider from the ‘Discover’ tab.
- Choose the 'Copy' option.
- Select your trade size:
- Fixed size: Allocate a specific trade size regardless of the provider’s position size
- Mirror master size: Copy the provider’s trade size exactly
- Proportional by equity: Copy trades in proportion to the ratio of your equity to the provider’s
- Adjust your risk:
- Set warning level to get alerts at a certain drawdown percentage
- Determine Soft stop level for pausing copy trading when a specified drawdown is reached
- Establish Hard stop level to automatically stop copying if the drawdown exceeds a certain threshold
- (Optional) Click copy existing trades to duplicate a signal’s existing positions
- Select Agree and copy
How to manually open a position
- Click the ‘Trade’ tab
- Choose your instrument
- Select chart timescale
- Confirm Sell or Buy order
- Define order type, position size, stop loss, and take profit levels
- Click Trade
How to manually close a position
- Click the ‘Positions’ tab
- Select Close
- Assess order details
- Click Close again to confirm
How to edit a trade
- Click the ‘Positions tab’
- Select Edit
- Edit your stop loss or take profit levels
- Click Edit again to confirm
Take advantage of seasoned traders’ expertise and start copy trading today!
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