Many who are interested in cryptocurrency to one degree or another have heard such a definition as copy trading. Today I will try to analyze this topic and tell you what it is and how you can make money on it. Studying the expanses of the cryptocurrency world every day, more than a year ago I got to such an investment plan for myself, which I will tell you about further. Actively broadening the circle of acquaintances in the niche of digital assets, I soon received the first feedback from people who are more actively using the advantages of copy trading in everyday life.
Copy trading - literally means copy trading, is one of the types of investment that involves copying transactions carried out by experienced traders on your trading account. The mechanism of operation is actually simple and it will not be difficult to understand all the subtleties of its work. The advantage of mirroring is that there is no need to transfer your assets to the account of a financial adviser or a third party, as happens in the case of trading through a certain broker, which we will talk about and not miss this moment for reasoning. Every day, the demand associated with the study of cryptocurrencies and the development of this direction is growing exponentially, as a way of investing and will soon be elevated to the status of a "Must-have».
Copy trading on specialized platforms that work with cryptocurrency exchanges, as I believe, is much more interesting than its representation in the classical sense on all kinds of Forex platforms that have a number of disadvantages:
• Input/Output restrictions
• Often low volatility
• Transfer of your assets to a third party
• Big commissions
• Intermediaries in the form of a broker
Based on my personal experience of copy trading on stock markets, cooperating with various brokers, a repulsive factor for me personally, especially for online brokers, is the huge probability of simple deception these days, which is the saddest factor in the end. In addition, regular misunderstandings on the part of brokers of a number of commissions should also be discussed and clarified in advance and in detail, for some reason it is not customary to advertise this in advance on the part of the receiving person, maybe that's how it is, I can't assume. Very low volatility in a certain position and not constant work as in the case of cryptocurrency exchanges. Opening a trading depot account has its own specific limits on input/output, which is not at all clear to me in the current state of affairs. In the case of a financial consultant, the transfer of your funds and the full disposal of your funds by this person is a very repulsive factor for me personally, it is possible to list certain conditions and restrictions for a long time, I suggest everyone to decide on your choice independently, I opted for cryptocurrency copytrading.
The situation is different on cryptocurrency platforms specializing in copywriting, the basic idea, mechanics and principles of operation remain the same, but at the same time have a number of advantages
• Direct communication between a trader and an investor
• No restrictions, complex verifications and limits
• Instant copying of a trader's open position
• Constant trading "24 by 7"
• The ability to track each trading pair
• Saving a huge amount of time
Why is copy trading so popular among novice traders and novice investors who are exploring the cryptocurrency market?
Сopy trading is a kind of educational portal for a novice trader, it is an excellent book for studying and mastering various knowledge, and for an investor it is a good opportunity to invest not in a fictional coin or a scam project, as it often happens, but let's say in something more tangible, of the main I would like to note:
• One of the easiest ways to enter the cryptocurrency market, which today remains one of the most profitable ways to invest
• The absence of unnecessary complicated operations and other repulsive factors, as it happens in other directions
• Full operation without your participation at a certain point in time, exclusively automatic operation
• There are no limits and it is possible to start with any amount acceptable to you
• The interest in partnership, the trader and the investor are directly connected, success is often characterized as the principle of one boat
At first, after viewing a huge amount of text and video material, I tried to learn the basics of crypto trading on my own, but to tell the truth, after a while I began to see my mistakes more clearly and transparently. Based on my experience, I can notice quite common mistakes for many novice traders:
• Most of the deposit was sent to one asset, ignoring diversification. Diversification means that when trading cryptocurrency, it is necessary to divide your portfolio.
• Excessive self-confidence, closing several trading pairs into profit, the next unprofitable position that overlapped the plus ones and pulled into the minus in total, here it would be necessary to simply close the trading pair, but here another mistake comes into play due to lack of experience, namely, an attempt to close a losing pair ignoring common sense and humility with loss, as a result led to even greater losses.
• Regular ignoring of the market depth. Not paying attention to the market depth of orders is another mistake in the list of novice traders and very expensive.
• The simplest thing as it may seem, but in fact one of the most important and fundamental mistakes is the lack of a fully thought-out trading plan, as well as an exit strategy.
• I think many people are characterized by the fact that watching your asset, the psychological component takes over when the price falls in front of your eyes and has a panicky effect on the emotional background as a whole, and from here emotional decisions follow, and not cold reason.
Unfortunately, you can continue this list for quite a long time, but it seems to me that it was just part of the way in learning and mastering a particular direction.
That's about this path and became the starting point for the development and testing of cryptocurrency copytrading at some point.
It is quite difficult to single out one of the platforms for cryptocurrency trading, at the moment the number of platforms has long ceased to be in a single instance, each has certain advantages, but in general, it seems to me that the basic functionality for simple copying is more than enough these days.
I will tell you by my example how I got acquainted with copy trading and share my experience, using the example of a platform that I found randomly, and to tell the truth, I was bribed by the fact that at the moment of use and up to the writing of the article, it remained free.
In general, at the moment I have quite positive impressions of using the platform, especially against the background of recent months and a good drawdown in principle of a large part of my portfolio, I still made an interesting strategy and a mini discovery for myself, but more on that later.
Cunino.io - object of our attention.
The initial page of the platform is presented with basic data and a description of the advantages for both the trader and the investor, but we will not focus on this, by the way, I will narrate on behalf of the investor, since I am not ready to return to the ranks of traders at the moment.
After registering on the platform, an alert with login details is sent to the mail, two-factor authentication can be set in the account settings, never neglect security measures, this is a mandatory security measure in the world of digital assets.
Getting to the main page, a list of available traders with various strategies opens in front of us, an amazing fact for me and a discovery was that you can make money on the fall of the main cryptocurrency, namely bitcoin, one of the examples was a trader on the platform, fortunately, you could simply contact the person representing the strategy via messenger, in my case, I was able to find communication with a trader and ask my questions.
The first "partner" cryptocurrency exchange on the platform is represented, I think, by the well-known KuCoin.
Such a giant as Binance is planned to be added in the upcoming releases, as I was told in the technical support of the service. Since due to the limitations associated with verification for my region of residence on the Binance exchange, I simply cannot pass it, in my case it was already the main working cryptocurrency exchange. With the addition of the "Sub-Account" section, which you can easily create on your account, there is no longer a need to create separate accounts for copy trading, which in our case naturally makes life easier and saves a lot of time and eliminates unnecessary entries. All that remains is to transfer to our "Sub-account" the amount that we are ready to allocate for copy trading in the ranges of the working deposit acceptable to us.
You can create a "Sub-Account" and API keys (which we'll talk about later) yourself in the settings on the KuCoin cryptocurrency exchange in our case, if you have various digital assets and you want them not to be used, I certainly recommend doing so.
Let's analyze an equally important point, what is the API & Secret Key and why we need it, looking ahead I will say that these are the necessary conditions for copy trading and without them there will simply be no copying, in other words, copy trading is not possible. Connecting your account via API keys is absolutely secure, which is the point when creating it will mark only the "General" and "Trade" fields
Note: Do not set the permission in the "Transfer" and "Withdrawal" fields for your security purposes, thereby limiting the possibility of withdrawing your personal funds through API keys.
The abbreviation API stands for "Application Programming Interface" (application programming interface, application programming interface). Most large companies at some stage develop APIs for customers or for internal use. API application: the goal is that the site server should directly contact the user with a request to create an event with the specified details, in our case, copying trading orders after processing it and transmitting the relevant information in the opposite direction.
The speed of copying trading operations is at a fairly high level, on average it is 0.2 seconds.
The instructions for the word can be found on the platform in the FAQ section, or just on the Internet.
And so, it remains to perform the last action before the start of the connection, fill in our fields after creating API keys and our account is ready to work!
How to choose a trader
• Trading history. The longer a trader has been trading profitably, the more stable the trade, and the better for us. It should also be taken into account the fact that some strategies implement themselves over longer distances.
• Risk diversification. It is necessary to check whether the trader does not exceed the maximum allowable risk for you on positions and does not open positions on instruments with a high correlation coefficient at the same time. Evaluate the trader's strategy, how many deals does he conclude per day? If he's a scalper, isn't his strategy too risky?
• Drawdown level. The lower it is, the better. If whale traders who manage large amounts can afford to go into negative before getting a profit, for those who copy signals and operate with a small portfolio, such a minus can put an end to a trading career. The maximum drawdown is individual
• ROI is the ratio of profit and loss on this account in relation to the amount of capital invested after a certain period.
After our choice is made in favor of one of the traders suitable for us, going to the trader's personal page, you just need to click the "Subscribe" button
The funny fact is that if a trader already has open trading pairs, the system will automatically copy the trader's trading portfolio and the so-called "Equalized" will work and all open positions will automatically be on our account.
With a strong desire, in the "Copy History" tab there is an opportunity to close a trading pair on my own, but I have never had any reasoned motives personally.
Each trader's open position, if your deposit is less than the recommended amount indicated by the trader in his strategy, will be directly proportional to the percentage of the trader's portfolio.
Let's simulate an approximate situation, if a trader opened a 10% transaction with a working deposit of 1000 USDT (which is 100 USDT in his case), and our deposit is only 100 USDT, my transaction will open at 10USDT (which is 10% of my portfolio), the solution as in my opinion is quite simple and working, because some strategies indicate a working deposit is quite large and it is not suitable for everyone, but this solution makes it as compatible as possible with any conditions.
Do not forget to install additional security measures wherever possible, ranging from complex passwords and two-factor authentication, in the world of digital assets, this is absolutely not superfluous.
Summing up, as promised, I will share the result, my balance for a period of about 45-50 days, with an initial deposit amount of 1380 USDT, is currently 1871 USDT.
Develop friends in the field of investments, digital assets, let this passive income one day become the main and more profitable, well, do not forget about acceptable and reasonable investments for you.
As it has been said many times:
"Investing in cryptocurrencies or related investments involves high risks, invest only free funds"
CUNION.IO
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