Copying Trading Strategies is a very attractive opportunity for people who want to earn a passive income and some people can get very rich doing it.
Although clever new trading websites let you mimic the trading strategies and patterns of other successful traders, is it a route to earning a decent income? This is known as copy trading and there are many opinions on the matter.
Trading is a very attractive opportunity for people who want to earn some passive income and, for some people, they get very rich doing it. However, all these promises of earning a fortune from the comfort of your own home aren’t always as true as they may seem. That being said, it is possible to earn a living by copy trading if you learn about it and put enough effort in.
#1: Copy Trading Requires Caution
Anybody can sign up to sites such as eToro and ZuluTrade. These websites are full of people known as “popular investors” who have convinced many people to copy their trading strategies. Whilst these people are successful on the platform, it is not entirely down to the trades they have been doing.
These popular investors earn a commission for each person who copies one of their trades. This is where people can easily fall because they view these popular investors as successful traders. Whilst they are all successful, it was largely due to their commissions and not trades.
#2: Success Mimics Success
Whilst you need to watch out for these so-called popular investors, there are plenty of people on the platform who trade successfully without trying to capitalize on their skills by building an audience.
By doing your research, watching what the underdog is doing and learning from it, the copy trades you participate in as a result can net you a living, especially if you copy trade full-time.
#3: Successful Traders Are Rare, Though
They are very few and far between. It is entirely possible to make a living if you only copy traders who are genuinely successful and don’t just appear to be successful. Unfortunately, these online trading platforms are not always the places where you will find the most successful traders living lifestyles you and I can only dream of.
Whilst online trading platforms do provide new and wannabe traders with a place to get started and earn a decent living, if you want to get rich then it’s better to head to the major markets with your newfound knowledge and skills.
Although copying trading strategies is not the best trading opportunity in the world, that’s not to say that copy trading is something to avoid, however. If you take your time to learn about it and build organic knowledge, you can quite easily make a living on the best copy trading platforms. Copy trading does work for many people and you can join the ranks of such people if you are willing to put in the effort.
Don’t expect to dive into these platforms and instantly be earning megabucks, though. That’s not how it works – trading is difficult, and it is a hard craft to master.