Copytrade is one of the popular methods used in trading, especially for those who are new to trading or don't have time to focus on trading due to being busy with work or other constraints.
Copytrade is an interesting approach because you as a trader can copy the trades of other trader accounts and make profits automatically.
With certain settings, your trading account will be matched with any other 'manager' account that is selected to copy their every trading position.
Without you monitoring your account at all times, if the 'manager' account is profitable, you will also profit. If he loses, you will also lose the same.
Actually, the copytrade system in trading has its own advantages and disadvantages. Let's examine one by one.
Advantages of Copytrade
Trade Becomes Easier
For traders who are new to the world of trading, they may find it difficult to start learning and studying price and market movements.
However, with the copytrade system, it will be easier for traders to just copy any other trader account that has better performance.
Save Time
A trader needs to spend a lot of time monitoring and studying before making the right trading decisions.
Therefore, copytrade will simplify the process and save time.
Learning Opportunities
By imitating other accounts' trades, you can also learn strategies and techniques used by more professional trader accounts.
This can also help you increase your trading knowledge and build an understanding of the market faster.
Disadvantages of Copytrade
Relying on Others
For starters, it may still be okay. But if you use the copytrade system for too long, traders may feel lazy to focus on trading, instead only thinking about relying on others.
This will also lead to other negative effects such as weaknesses in analyzing and understanding the market.
No Control
With an automated system, you have no control over your account. If the copied account fails to control risk well, you can't do anything but bear the same losses.
This may not be popular for those who want to take good care of trading risks even through copytrade.
No Profit Guarantee
You can choose any 'manager' account to copytrade by evaluating their account performance history.
However, that does not guarantee that you will generate profits when copying that account.
A trading strategy that worked in the past is not necessarily effective in the future due to changing market conditions.
In conclusion, copytrade can be a powerful 'tool' for traders, but it should be noted that it still has its own risks.
Do a thorough research before you are convinced to use the copytrade system and choose the best platform.
Saracen Markets also provides copytrade services for those who do not have time to trade. To register, CLICK HERE.
Traders need to be smart about planning and organizing the best strategy to make copytrade a 'money machine'.
But if you make a mistake, you can end up paying for it. Be a smart trader!
