COPY TRADING – A WAY TO SUCCEED IN FINANCIAL MARKETS

We all know what the holy grail of financial markets – a perfect strategy that brings consistent returns, day after day, month after month. Some of the traders search for it for years, without much success. Can copying a trade be a solution to it?

WHAT IT MEANS TO COPY A TRADE, AND WHAT ARE THE BENEFITS OF IT?

Copy trading is the process of mirroring the actions of a given trader or a system. Initially only available to institutional clients, due to popularity it quickly became available also for retail investors. Mirror trading is based on risk tolerance, on which you decide while setting up the system. If you are interested in such a product, you will have to pick a trader, based on their overall gains, monthly performance, and strategy. Once settled, the process becomes fully automated, mirroring every trade of a given person or system, every loss, and every gain.

REDUCED EMOTIONS

Emotion-based trading is the by far leading cause of traders losing money and the reason for making risky, unnecessary trading decisions. By mirroring trades, you can mitigate the emotional part of every trade and day-to-day fluctuations. You will be able to login into your account after a given period, asses the performance and results, and decide if you want to continue with the strategy.

VERIFIED RESULTS

Every strategy, trader, or system you will pick from, comes with a clearly defined and verified past results. Because of that, you know what to expect of the system, it’s benefits and limitations. What is more, systems are tested for extended periods, no less than 12 months. Such a transparent performance will surely ensure that you make sound, informed decisions.

LIMITATIONS OF COPY TRADING

Like any system or strategy, this one also has not only pros but also cons. First, it’s risk management. Maintaining discipline and proper risk is hard. In mirror trading, it’s tough to determine what risk was taken to achieve given results. Although not a big issue for high risk, high reward traders, it might be not suitable for more traditional players.

Secondly, a strategy is only a strategy, and it works only in certain market conditions. Once the conditions change or the overall trend shifts, given strategy becomes obsolete. This limitation can be mitigated by testing a system in different markets, to ensure it is robust and performing well.

To sum up, mirror trading is a compelling and exciting offer both for new players, as well as more experienced traders. Every experience you get is valuable, and mirror trading can deliver not only that, but also some time off and relaxation from demanding day-trading.

– – – – –

This article is a sponsored content.