Copy trading is available in the functionality of some cryptocurrency exchanges. Copy trading is a trading strategy based on repeating the trades of experienced traders. On some platforms, process automation is available, so copy trading is considered as a way of passive income. You can take a closer look at it, for example, if the option to convert USDT to TRX and stake the Tron is not acceptable or available to you.
This strategy is applicable in any financial markets, both in traditional and in the crypto industry. The principle of the strategy remains the same, regardless of the type of asset you work with.
The user can independently choose a trader for whom he will repeat transactions. The owner of the cryptocurrency also determines the amount of digital assets that he is ready to allocate for copy trading.
When choosing a trader to emulate his strategy, the easiest way is to focus on the rating system. By studying the ratings of other users, information about the completed transactions of market participants and their strategies, you can choose the right trader to repeat transactions.
Advantages and disadvantages of copy trading
Advantages:
- Copy trading saves time because the user does not analyze the market on his own. This is done by the trader who makes decisions about transactions. In addition, transactions are opened automatically.
- You can start earning without training. To connect to copy trading, you do not need special knowledge and skills.
- By copying and analyzing trades of experienced traders, the user can learn how to trade.
- There are many traders on the market who are ready to lead other market participants. The user has a large choice and a suitable option is sure to be found.
Flaws:
- There is always a risk of losing money in trading and copy trading is no exception. It is necessary to carefully study the trader and his strategy in order to reduce the risks.
- For the use of copy trading, you need to pay a commission to the trader whose trades you repeat.
- There is no 100% guarantee of successful completion of the transaction. Every trader has failures, even catastrophic ones.
3 best copy trading platforms
Copy trading is not available on all sites and we have selected some of the most famous and reputable ones.
Bybit
At the time of writing, Bybit is one of the most fully featured and fastest growing digital asset platforms on the market. The platform has a simple interface and a rich selection of coins for trading. It’s true that it’s impossible to directly exchange DAI to ETH here, but it’s quite possible to perform two consecutive swaps
Pros:
- Strict selection of traders whose signals can be copied by copytraders
- Optional KYC verification.
- There is an insurance fund.
Minuses:
- There are geographic restrictions and does not work with US citizens.
OKX
OKX was founded in 2017. And now it is one of the most respected exchanges on the market. At the time of writing this review, OKX provides a wide range of tools for its clients, including trade copying services. The platform has a simple interface and low fees. In addition, OKX is deservedly considered one of the most stable cryptocurrency exchanges on the market.
It is worth noting that registration on the exchange takes only a few minutes, and there is also a fully functional mobile application. The exchange is also suitable for novice users.
Pros:
- The platform has high liquidity.
- It offers a wide range of repeat traders.
- Developers pay special attention to platform security.
Minuses:
- Geographic restrictions: the platform does not work with citizens of the United States and in a number of other countries.
Owners of native platform tokens can receive discounts on commissions depending on the amount of coins in the account. The withdrawal limit depends on the status of the user, which is determined by the system based on a number of indicators, including trading volume and the number of native tokens on the balance.
BingX
The BingX platform was founded in 2018 in Singapore. It provides users with a wide range of tools to work with more than 150 digital assets. Here’s what to look out for:
The platform supports working with fiat currencies through third-party protocols.
Platform users have access to some of the most advanced copy trading tools on the market.
Pros:
- Low commissions.
- A wide range of digital assets.
- It is not necessary to pass KYC verification.
The customer service supports 10 languages.
Minuses:
- Restrictions on transactions with digital assets: only cryptocurrency/stablecoin trading pairs are available on the platform.
- There are no additional income programs.
Commissions and limits on BingX:
- There are no fees for making a deposit.
- The platform offers some of the lowest trading fees on the market.
- The commission for converting cryptocurrencies is 0.20%.