At present, copy trading is a good earning source for many people. It is pretty popular because of good profit, even at the beginning stage. It is a process of finding proficient traders and following them to copy their activities to earn money on particular platforms.
Though it seems effortless, the risk remains while investing. So, it is a common query of beginners if they should start copy trading. In this article, we will clarify if you could make a living from copy trading.
What is copy trading?
Copy trading is the same thing as it sounds. It is a form of social trading that can be both automatic and manual. Here you have to follow an expert trader and copy all his activities in trading. For instance, if the trader buys 10 shares of a specific stock, you have to do the same.
The process sounds very easy, but it requires your analysis as well. Besides, your capital remains at risk in spite of following an experienced trader. Copy trading is mostly short-term trading. So, it is a good option for those who lack time to follow the market. Copy trading is becoming popular each day since it allows to make money for beginners as well.
How copy trading works
The process of copy trading is not complex at all. First, you have to select a copy trading platform like eToro and register on it. There are two parties called the trader and the copier on copy trading platforms. In general, traders are experienced persons and copiers follow them. If you are a copier with an auto-copy strategy, you will receive a notification each time the trader opens a new position. So, a copier needs to follow a trader with a proven track record. Besides, you have to decide the amount for investing wisely.
Can you make a living from it?
Many people invest in copy trading and fail due to poor investment strategies. So, it can be confusing for beginners if copy trading is a good passive income source. To be honest, copy trading is still profitable and you can make a living from it. The trader you follow is the thing behind your success or failure.
This is why someone is making 60% profit per year, and someone is struggling with 20% loss at the same time. It is extremely crucial to follow the right trader who has a good trading history. Finding a good trader may take months, but it’s worth doing.
Moreover, you are at risk like other online businesses. The business is not designed for idle people to make money lazily. Hence, you should never expect to be rich overnight. Copy trading is awesome for earning as well as learning social trading. You need to have precise strategies for a better outcome.