As Bitcoin shoots to five-day highs ($20k) while Ethereum bounces above the $1,100 mark, amateur investors are more motivated to participate in the crypto fad, aiming to secure easy profits.
Cryptocurrency trading has also created a social layer, with thousands and thousands of users gathering on Discord and Reddit forums to discuss the prospective market with veteran traders, hoping for some guidance and investment cues. Taking advantage of this trend, some companies are creating copy trading crypto platforms targeted toward novice investors.
Definition: Copy Trading
Copy-trading platforms allow users to mimic or copy the trades of more skilled traders and curtail the steep learning curve while maintaining complete control of their crypto accounts.
For example, if a seasoned trader purchases 100 shares of Tesla stock, you copy them. If they sell coins at a high price, you follow suit. If they buy crypto when the price goes down, you’ll also copy them, believing that the trader anticipates the price will rise in the future.
Cryptocurrency copy trading platforms save new investors years of trial and error, learning how to book profits. You are not required to take classes describing how the cryptocurrency market works in detail. In short, they save you from making losses while learning about the cryptocurrency market.
How to Choose a Crypto Copy Trading Software
Before choosing a copy trading crypto software, consider different criteria to ensure you choose the best one. Here are the most critical aspects to consider before venturing into this industry.
1. Compatible with Your Platform
You can download apps compatible with most operating systems, such as Android and Apple products if you have a smartphone or a laptop computer. You can also sign up with companies through their websites, meaning you don’t need any particular software. Always check whether the company offers other platforms so you can use your device of choice.
2. Number of Trading Opportunities on Offer
The number of different trading opportunities offered by the different copy trading software varies greatly and depends on both the platform and its popularity. Be sure to check what kind of trading opportunities the software offers to you. Usually, there are three different kinds of trading opportunities that you can choose from:
- Copy the trades of a single trader – This is the easiest option because you don’t have to do any research on your own. All you need to do is decide which trader fits your needs and follow their trades.
- Copy trades from several traders – In this case, you can choose which traders to copy and follow their trades. As these traders usually offer different trading options, it will increase your chances for higher returns but increases your risk factor as well; it’s ay to get confused.
- Copy trades of a specific currency – This is the most complicated and requires you to research the kinds of trades different investors make under each currency. You need to choose the one that suits your needs and make sure you can follow their trades.
3. Tech Support
A number of copy trading software offer 24/7 live chat support. This means that whenever you have a problem, you can open a support ticket and get instant help from the team. However, this doesn’t mean that all the platforms are reliable because some are not currently running. Usually, you will find out about the availability of this feature by visiting their websites and checking for any information about their availabilities.
4. Trader Information
Before making your final choice, you should consider the available trading information on offer by carefully checking their features and fees to see which one suits you best.
The price of copy trading software depends on the quality of the platform and the number of potential traders, which are usually determined by the number of already signed up, their experience, and their popularity. This is why you should pay close attention to this element. It would be best to look for copy trading software that offers a reasonable fee, usually around 0.1% per trade.
The security of copy trading software is crucial if you invest a lot of money. You should check carefully about the platforms you will choose on their features and services to see which one suits you best. However, as with other financial products, ensuring that sending your funds to other people should be done with extreme caution and only after reaching an agreement.
As you are probably aware, copy trading software is still a relatively new concept, and it is pretty challenging to find proper copy trading software. However, as more people become aware of the benefits of this type of trading platform, more companies will be offering these services to their clients. If you are planning to invest in cryptocurrency and are interested in copy trading software, we highly recommend that you choose the most highly recommended companies.