Many people enter the Financial Markets by copying traders. They thrive in the fact that the hard work is taken care of by someone else. However, in fact, there are many important principles to learn before copying traders. That’s why we from Tradeo have created this guide specifically for this purpose.
The principles of copying traders
Social Trading has multiplied the opportunities for many new traders to profit like pros. At the fore of this revolution stands Tradeo with its innovative and user-friendly system. With a few clicks, traders can perform the exact same operations as market leaders. One can do this by going to Tradeo site, checking for profiles with best performance and pressing the copy button. Then, all a person needs to do is set the amount of money to be used in copying and when to liquidate the position.
However, merely copying traders who seem to be performing well is not enough to ensure profits in the long run. This is why Tradeo suggests its traders to take into consideration many important elements before doing that. This will ensure you get the most out of Tradeo’s pioneering Social Trading system and maximize your gains.
Without further ado, here are the 6 most important elements to lookout for when copying other traders (and profiting from it!):
1. Check the prospect trader’s gains
Tradeo’s database ranks traders according to their performance and makes it available for everyone to see. Registered Traders who earn a lot have their historical results displayed in their profile page on Tradeo’s site. Therefore, before copying traders, you should always check the prospect trader’s gains first thing right off the bat. While this is a good starting point, it’s certainly not enough to make a sound decision on who to copy, which brings us to our next metric…
2. Has he been lucky or does he have real skills?
Stimulated by greed right in the beginning of their trading careers, many traders will run very high risks… and profit a lot! However, in the long run, it’s possible to see who’s been lucky and who has real skills as luck eventually fades out. Beware of this before copying traders! The starting date of each person is shown for everyone in their profile page. Therefore, don’t be impressed by traders with a very short career and instead chose those who have been in the market for more than six months. If someone has been doing well for so long and with consistent gains, this might be an indicator he’s good to copy.
3. Are you comfortable with the risk he’s running?
Risk is a very subjective variable. By definition, few traders are willing to run high risks. Yet, others can be brave enough to make larger bets in products they believe in. Nevertheless, this decision often a result of a trader’s strategy, which is unique to each one. Before copying traders, see if you are willing to run the risk he’s running. This is also available to see on his profile page and remember: even top traders who keep a high risk strategy can lose a lot in a single trade.
4. Can you diversify and pick other traders?
Diversification naturally diminishes risk. So, as the saying goes: Don’t put all your eggs in one basket! Rather, look out for other traders to see if they fit your strategy. Traders that are more in line with your goals provide additional trust and safety. Besides reducing the stress and emotional wear you might feel from the ups and downs, this way you will have better chances of profiting in the long run by sticking with him. Copying traders can often be more profitable when maintained for longer times.
5. Remember to always set up your closing limit
Before copying traders, the system will ask how much loss you are willing to sustain. Create a proper strategy and specify after how much loss is the system supposed to sell your position. While this can give some relief, remember that it can also limit potential gains when the market goes back up. Therefore, it’s always best to try to contact the copied trader and check out his plan. Many traders like to announce what they expect will happen in the market, so make sure to profit from that as well!
6. And finally: Keep trying new traders to copy!
Investing is a dynamic process and no trader only invests in one product. If copying other traders is similar, then there’s no point in copying only one! Remember the market goes up and down, so even though you have someone more experienced doing most of the brain work, that doesn’t mean you can just abandon everything to him/her. Be sure to accompany the copied traders’ decisions and know when to change them. That way, your chances of profiting increase even more!
In conclusion, Tradeo has been making the job of investing a lot easier and much more profitable, but that doesn’t mean traders can just sit back and relax. With time, traders learn to make wiser decisions, operate better and can even be copied by others. The road to trading is long, but with knowledge and persistence, everyone can profit and be successful!
Click here to see a nice infographic summarizing everything!
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