Why Copy Trading is a Passive Income To Consider?
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What exactly is Copy Trading?
Copy trading is an automated trading system allowing individuals to trade in the financial markets by following signals. This system need a “leader”, someone (human or robot /AI) who will plays the trades. By buying or selling (long or short) the leader account will automatically send signals to the copy traders, to order them to do so. This allows copy traders to trade without knowledge, without doing anything.
How do we earn money?
By trading ! You don’t have to know about trading, and you’ll not have to trade by yourself (even if you could)! Your account, available on a broker or on an exchange, and on which you’ve made a deposit, will follows trading orders. This is it. Depending on the trade orders, you’ll have a win or a loss.
Here is the result of a bot I use, doing daily copy trading on the Forex Market. Its ROI is approximately 15% per month (more or less) and since nearly 2 years now it keeps its promises.
How does the Leader earn money?
The Leader earn money through the copy trading system. It can be with the payed subscriptions (that enable the copy trading) or fees directly taken from the trade (or both).
This system benefits both the signal leader, allowing him to earn more through trading, and also the copy trader, earning by following his strategy.
Because it’s trading, there is no 100% win. Even better traders & bots have sometimes bad trades. Bad trades are also copied, this is why it’s important to copy trade a strategy you like and that works. Try to find a bot or trader with interesting and stable results and some background and experience. You don’t want copy trade to ruin you, right? It can also be a good strategy to diversify your investments in this domain too. In order to have a more stable average ROI.
Copy Trade, which type of Leader: Bot, Human or Both?
As I said, multiple type of leaders are available. I personally tend to prefer bots mainly because they have no feeling, no fomo, they analysis facts, rules, passed datas and try to predict the next move with pure logic and statistics. By being a developer, I know how powerful a program or an AI can be. Imagine that the first trading bots were already available more than 30 years ago? Trading bots are also used by a big majority of banks and big companies since many years.
Because bots are stable and predictable don’t mean that humans can’t be good leaders. In fact, some traders make way more than trading bots. It’s just a matter of taste.
Now, what about trading bots monitored by experienced traders? This is a very explosive combo here! Some trading programs / bots work this way: A trading bot is monitored by a trading expert, enabling a human to correct or validate the possible detected trades .
My thought? I think monitored trading bots could replace manual trading (this is more and more the case) but 100% trading bots have the advantage of doing their things, no matter what, and I like the fact that they follow an algorithm and sets of rules. The trading bot I’ve used for now make ~15% per month, and I’m pretty satisfied with it. I’ll invest in many more trading bots but also in human copy trading soon (diversifying you know).
Crypto, Forex, Stocks?
It all depends on your tastes, your knowledges and objectives. In my case, I have better understanding of cryptocurrencies and I also like the forex stability. So I have multiple options in both: Trading on Crypto allows 7/7 trading with a big volatility instead of trading on Forex only 5/7 with a better stability.
I can’t tell more about Stocks as I have not find any interesting copy trading programs for now. Let us know if you have some informations about Stock trading and stock copy trading!
Brokers & Exchanges
If you want to use copy trading with Forex & Stock, you’ll need an account on the corresponding broker. The main problem is that a big majority of brokers are not regulated and it can be a disaster if you encounter some problems with the unregulated brokers. You have only two possibilities: take the risk with unregulated brokers (this is similary to HYIPs, you have to make some research about the brokers to know more about them), or you can find only regulated ones.
One of the most famous regulated broker with copy trading is eToro. I currently have an account but no deposit on it as I’ve not found any interesting copy strategies that match what I’m looking for (10% minimum per month).
About unregulated broker, it can be confusing as some brokers are regulated in some countries but not in others.
You can also find copy trading programs that run on exchanges. This means that they trade directly with your account and this means that no one can steal money of your account. This is really interesting but it as a counter part: there is not much programs around exchanges (as far as I know) and it will conflicts with your trades if you have some and/or your others programs trades. In general, you must avoid having multiple programs accessing one account to do similar things.
Conclusion
I’ve been in smooth details to let you understand what is copy trading. By understanding it, you know can see that it’s a very intersting opportunity. This is an investment that can become a pure passive income as you juste have to let bots or traders do their things. The only action you have to do is upgrade / buy the program (if it requires a license or need some credits to work) and withdraw your benefits (if you have some :D).
Let me know if you want more informations about copy trading programs or trading bots, or if I’ve wrote bad informations or mistakes. I deeply hope you’ve find this article helpful. To be honest, I’m enjoying sharing these informations with you, as you are part of this beautiful medium community!
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This is the website I’m currently building with associates to share our investments programs, the tests currently in progress and scams we have discovered. The objectives is to find stable and safe programs that earn at least 10% per month and share them with you. We also provide referral links and support, to help us at no additional cost for you, but allowing us to do referrals giveaways, scam rescue giveaways and more tests.
“The More You know, The More You Earn”
JOR
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