Copy Trading Risks, Benefits And Strategies Every Beginner Should Know

Copy trading is no longer a new thing in the world of investment. If you love high-risk high-return investment options and lack enough experience, copy trading is ideal for you.  Visit

Before you dive into the turbulent ocean of volatile market investment, learn to stay afloat. Here is a brief account of the risks, benefits and strategies associated with copy trading every newbie should be aware of.

Strategies Of Copy Trading

Social trade is undoubtedly an excellent choice for people interested in high-risk high-return opportunities. Even though you follow a certain trading method of a master investor for copy trading, the following strategies can be extremely useful for earning more profits.

  • Know when to get into the copy partnership and when to exit. Time always remains critical for effective investment.
  • Even when you earn enough profit by following the trade moves of a particular trader, realize the time when you need to let go. Replicating the moves for eternity is never a wise decision.
  • Keep your investment portfolio diverse to avoid heavy losses. Copy trading is technically different from traditional trading. But a few foundation stones of investment remain unaltered throughout the investment maze.

Risk Of Copy Trading

Regardless of the method of volatile market investment, the risk component never becomes zero. Even when you follow the trade moves executed by the experts who have earned their fortune using those strategies, you cannot nullify the risk factor entirely. Here are a few risk factors you may face for volatile market investments.

Be its foreign exchange, cryptocurrency, or shares, a little fluctuation in the existing socio-political situation can change the entire scenario. The value of volatile market assets does not depend on economic factors alone.

Social, environmental, and political factors also impact the speculations widely and alter the prices of the assets substantially. Since most of these factors remain uncontrollable and unpredictable, the market can experience an upside-down at any time.

The best trade moves of yesterday can become the most inappropriate ones within a matter of a few days. Even copy trading cannot rule out the possibility of such a random switch.

Besides market risks, an investor might also experience liquidity risks and systematic risks while following copy trading method. All these risks are random in nature and appear unannounced just when the investors are not ready for them. Therefore, the outcome often turns out to be quite taxing.

In short, investing in a volatile market is never without risk. Know the market well and always keep a backup plan ready to save your money from going down the drain.

Benefits Of Copy Trading

Copy trading comes with several benefits for both – the investors and the master investor. The followings are only a few of the advantages, copy trading comes with.


Copy trading is time-saving at any point in time. If you intend to invest in shares, forex, or anything related to the volatile market, you need enough time for thorough research.

Many people shy away from this investment due to a lack of time. With a busy schedule, you cannot invest enough time to learn the ways of the volatile market to invest effectively.

The risk levels and the profit potentials are both high in this domain of investment. Therefore, you need to know the trade by heart to gain over time. 

Copy trading can help you invest without knowing much about the trade-related intricacies. You can simply follow an investor you find reasonably experienced and expert and replicate the trade moves to reach a similar position.

Ideal For New Investors

Besides saving time, for newcomers, copy trading can be an excellent choice at any time. No matter how many trade journals you read or how keenly you follow the regular market updates, you need hands-on experience to become an expert investor.

This is where copy trading comes as a rescuer. With your basic knowledge of volatile market trades, you can choose a few expert traders and follow their footprints to invest safely. Many people suffer massive losses during their initial years in the share or forex market.

When you follow the tried and tested investment methods of veteran traders your investment risk lowers and your profit margin rises.  Therefore, for every newbie, following the footprints of expert traders remains a smart choice.

Helps Learn New Tricks

When you follow the trade moves of experienced investors during the process of copy trading, you learn several moves and strategies you never knew existed. Sometimes the master investors take unusual moves to cover up a loss from an earlier investment through a current trade.

You will learn about several things from these moves like how the market responds to certain changes, which shares are the best for high returns, which investments offer long-term profits and more.

In short, the expert traders will help you learn all about the market gradually through their extraordinary investment moves.

Effective Risk Management

Who can deny the amount of risk every volatile market investment comes with? While some investments result in losses, some also yield substantial profit every investor balances the profit and losses to get some positive figure in the end.

If the risk management is effective, your loss figures will never exceed your profit levels. With Copy trading, you get the support and expertise of expert investors. Therefore, you never make trade moves that can throw you into a lossditch.

Experts plan their investments intelligently and keep all the factors of the market in mind. Therefore, their trade moves often turn out to be shock absorbent. In simple words, even when the market parameters change, the trade moves of the experts adjust to the altering situation and minimize the chance of loss.

Helpful For Signal Providers

Copy trading does not only serve the ones who copy the moves of the master investors. It also helps expert investors in many ways. Especially the signal providers can earn substantially through copy trading.

While many offer their moves for free, some also charge for revealing their track record and the associated moves. If you wish to make a fortune by becoming a signal provider, copy trading offers you an excellent opportunity.

You can design the payment in a layered manner. For example, you can charge the people who wish to copy your trade moves through a subscription fee and keep an option for a performance-oriented fee along with it. This will help you earn more as a signal provider.

Check the best copy trading platforms to know more about social trading to manage your investment intelligently.