For traders or traders, the term copy trading is certainly not foreign. Because many of them have started doing these activities. But if you are a beginner and don't know what that means, be sure to watch the following explanation:
Introducing Copy Trading
According to its name. This activity is generally done by imitating the actions of other traders. This can be done using a social trader platform and taking advantage of the network of traders in it.
In own copy trading activities. You can also select some specific actions. In other words, although this one activity works in an automatic way. However you as a user can choose some actions that you think are much more profitable.
By utilizing this one trading system. Of course, even novice traders benefit. Because they can get higher profit opportunities, even without having to do any analysis.
Advantages of Using a Copy Trading System
In addition to the convenience as mentioned in the section above. Using this one system can also give you many other advantages. As well as some of the following advantages:
1. Low risk
Because this one activity is a reflection of the trading strategies carried out by top traders. Of course, even beginners can reduce the risks that must be faced more easily. In fact, he can also rely on the knowledge of people who are experienced in it.
2. Learn to trade easily
Basically the process of learning to trade is quite difficult. It may even take a long time for you to understand it properly. With the media in the form of a trading platform and also the best copy trading system, of course, investment activities can be learned easily.
3. Expand Adoption
By reducing the risk as previously mentioned. It is certain that the expansion of adoption will run more easily. It also helps in building trust in the trading field itself.
4. Expert Traders Can Earn Commissions
Other advantages are also obtained by previous traders or professionals. Because they can get a commission from every action imitated by other traders. This is clearly profitable, mainly because it can increase income from daily activities that it can do.
Disadvantages of Copy Trading System
Besides being known by several forms of advantages at the top earlier. This trading system also has several weaknesses. As well as :
1. There is a time lag when placing an order
The first weakness that arises from this one system is related to the trading market conditions that move very quickly. Even changes can be made quickly too.
2. Using the same platform
The next part that is also stated as a weakness is the use of the same platform. Because to use this copying service or system, you also have to use the same platform as the trader of your choice.
Meanwhile, many traders are lazy to switch to certain platforms. Because generally they are comfortable with the use of the social trading platform they use.
From the brief explanation above, you can see that the copy trading system is able to bring many advantages. Especially for novice traders. But you also have to be careful, because it also comes with some drawbacks