What are the advantages of copy trading?

The rise of social networks soon led to a new way to invest called social or copy trading. As the idea grew and saw increasing improvements more people are enjoying the benefits of using copy trading as a part of their investment strategy. Below are five advantages of using a copy trading strategy:
  1. Traders with little experience can gain confidence from copy trading. Those just getting started with trading are wise to go slowly as they learn their best trading strategies. And that’s fine because it protects capital, but it also slows the growth of their trading account. By using copy trading these new traders can benefit from the years of experience that the signal providers have. It’s just like having a seasoned professional as your mentor.
  2. Copy trading can save you hours and hours of time each week. The reason investing in the markets is so time-consuming is primarily down to research and analysis. The act of placing orders takes just minutes, but the fundamental and technical analysis leading up to pulling the trigger on a trade can take hours a day. By copying the trades of others you can take back all (or most) of that analysis time.
  3. Profits are likely to be far greater when you use a copy trading strategy. Not only do you get the benefit of following the trades of a seasoned trader, but you can also open and close far more trades, with profits, when you get to forego all the time-consuming research and analysis. You can use just the copy trading strategy, or you can add it to your existing trading activity. Either way copy trading should add to your bottom-line profits.
  4. While copy trading helps inexperienced traders most, even experienced traders can see benefits from copy trading. The reason lies in the two advantages highlighted above; time savings and additional profits. These are huge advantages for anyone who uses copy trading as part of their strategy. An added advantage for experienced traders is they may learn of new strategies to use in their own trading by watching others. After all, there’s always something new to learn as an investor.
  5. When you choose copy trading as a strategy you have an almost unlimited choice in who to follow. As the copy trading ecosystem continues to grow, there are an increasing number of platforms and traders to choose from, giving you the opportunity to select only the best traders to copy.
  While learning to trade on your own is always a goal to strive for, copying experienced traders has its advantages. Use every tool possible to increase your knowledge and profits, and that includes copy trading.