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Introduction to copy trading

As the name suggests, copy trading is a special type of trading style where traders directly copy the positions taken by another professional trader. Here, the copier decides the amount they wish to invest and automatically copies everything their chosen professional traders (providers) do in real-time. For instance, when a provider trades, the copier account executes the same trade order. There is no need for any input in the trades as the same returns are offered on each trade as the chosen provider. 

In this article, we will discuss a few advanced strategies to maximize profit through copy trading, the most common mistakes copy traders make, and how to find a reliable copy trading platform.

Advanced strategies for maximizing profit in copy trading

Copy trading is an easy way of using other professional traders’ expert knowledge without losing control over the outcome. Copy traders can still open or close their trades whenever they want. Hence, by copying trades made by professional traders, people can make money based on their skills. There is no need for advanced knowledge to participate in the financial market. This type of trading has become increasingly popular because it allows novice traders to make money without any knowledge or experience of the financial markets. Several traders create trader-based portfolios as they do not perform the trades themselves. 

To maximize profits through copy trading, traders must regularly monitor the activities and performance of their chosen professional traders. They can study the effectiveness of the trading strategies by comparing them with others. If a professional trader is more successful, it is wise to follow them instead. Additionally, proper risk management is also essential. Traders must diversify their trading portfolio competently and stick to practical decisions to respond rationally to any unexpected fluctuation in the market.

Common mistakes to avoid in copy trading

Here are some common mistakes to avoid while copying professional traders:-

• Get rich quick goal – The hype around crypto trading makes novice traders believe they can earn hundreds and thousands of dollars without learning about the financial markets. Trading in crypto requires extensive research and tremendous patience. The only way to use the Get-Rich-Quick method is through copy trading! But a word of caution here: even professional traders sometimes land heavy losses instead of gains.  
• Lack of risk management – Risk management is the most important aspect of trading, especially for beginners. However, only a few traders know how to apply risk management techniques. One of the ways to manage risk is by using stop-loss orders that help traders stop a certain trade from continuing its execution, assuming that it will perform poorly in the market. Many trading platforms offer risk management, which is left to the traders to learn when and how to use.  
• Lack of a risk-reward ratio – A risk-reward ratio shows the number of losses a trade can risk to make profits. This ratio needs to be calculated before making trades. One should calculate the risk-reward ratio to know how much capital needs to be put into the crypto market through copy trading and how much the expected loss or profit will be.

Finding a reliable copy trading platform

There are several new platforms offering copy trading. However, it is advisable to stick to highly reputable and reliable platforms with an enormous user base and years of experience in the industry. BYDFi is a platform offering copy trading features for frequent traders and investors. It holds a Money Service Business (MSB) license from the United States and Canada, making it a licensed crypto exchange benefiting both copiers and providers with its copy trading function. 

Conclusion – Why choose BYDFi? 

In conclusion, copy trading is an excellent feature for replicating the trades of experienced traders. BYDFI is a popular exchange that features the copy trading function where users can maximize their profits by automatically synchronizing the trading behaviors of their provider’s trading accounts. BYDFI copy trading does not require traders to manually open or close their trade positions and reduces the threshold for the user’s contract trading. 

BYDFI has a high profit-sharing rate in the cryptocurrency industry compared to other exchanges. Providers can get up to 8% of their followers’ profits by sharing orders. Professional traders who are being copied on BYDFi get to enjoy multiple benefits. They can make profits without fear on the safe and reliable exchange platform as BYDFI audits every trader trading on the BYDFi marketplace. The level of transparency allows providers to know every copier’s information and strategies before placing their trades. 

Another notable feature of BYDFi’s copy trading function is that copiers can follow the trades of multiple professional traders and sit back as their profits get maximized. Lastly, all of this can be done in real-time on the go with BYDFi mobile app that supports copy trading, which is best suited for beginners willing to learn about various trading strategies without risking any real money.