Why copy trading is a perfect start for beginners

If you are hoping to enter the world of financial markets but don’t have the required skills and experience, copy trading can be the best option for you. 

What is copy trading, you may ask!

Copy trading as the name suggests is copying the positions taken by another professional trader so you can achieve their level of return rate. Put simply, you decide the amount you want to invest and then link your account to the account of an experienced trader. As a result, everything they do while making a trade will be automatically copied on your account, including their profits and loss.

How copy trading is useful for new traders

1. Provided that you will be using expert knowledge of another trader, you can potentially make money without requiring advanced knowledge of financial markets.

2. Copy trading is an excellent way to explore the market and closely watch the strategies of top traders. This will give you an opportunity to upskill your own trading knowledge.

3. Since copy trading can be applied easily to a number of financial markets, such as, forex, commodities and stocks, this means you can allocate your portfolio to different assets. It will not only give you exposure to a diversified portfolio but you will also be able to offset losses if one market or a trader performs poorly.

4. Learning the ropes in any financial market takes time and a lot of research. By copying from another trader you can reduce your learning curve, save yourself from the hassle of analysing and monitoring the market and can rely on the expertise of another trader who may have years of experience in the field

How to start copy trading

1. Select one of the copy trading platforms you want to use. The most popular one is ZuluTrade with millions of active users. Then the next step would be to decide on a broker that is also supported by your chosen trading platform.

Here’s a short list of highly reliable and solid brokers supported on Zulutrade:

AAAFx

ThinkMarkets

GWG

Fxview

Global Prime

FxChoice

Tickmill

Amana Capital

Urunex

2. Choose a trader based on the factors that are important to you. Zulutrade naturally filters the top traders so you can even go with their recommendation but make sure that your goals align with the trader in question.

3. Decide your investment amount and keep monitoring your financial results. If at any point you don’t feel like going ahead, you can stop or even reduce your exposure to one trader. 

To sum up, copy trading is suitable for novice traders who want to take their first steps in the financial markets and also for traders who just want to diversify their portfolio. However, copy trading doesn’t mean that you don’t look at your trades ever. It’s important to monitor your trades from time to time for best results.

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