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Crypto social trading, mirror, or copy trading is a novel way of trading the markets, where traders play against the market rather than against each other. According to Yaniv Altshuler, an MIT researcher, and computer scientist, copy trading delivers better trading results than individual trading.
Mirror trading could therefore give you a much-needed upper hand in the ultra-volatile, ultra-risky crypto social trading market. Do you know that 95% of all individual traders lose their trading capital as they try to gain ground in the sector?
Social trading can lessen the rates of failure by helping you trade within a safer defined system. It is a process that allows newbies to trade within established rules for better returns.
How would you like to make your crypto gains by simply watching and monitoring other trader’s trading activities? How about mirroring the professional moves of the best in the market when making your trading decisions? This is the heart of copy trading: copying the trades of expert traders.
Social trading or copy trading allows traders to conduct gainful trades without years of trading knowledge, experience, and extensive research. Instead, they can instantly and constantly access information and data generated by other experienced traders and apply the same in their crypto trading strategies.
Simply lift and apply the trading strategies used by successful traders to your trades. Make investment decisions on trades that are based on data and analysis done by other traders. Consult and seek advice from more experienced traders by leveraging the “social” bit of the copy trading element.
This action will shorten your learning curve as you interact with like-minded traders for mutual benefit. Using our crypto social trading feature on Bingbon, you will access low-cost, complex strategies and map out your trading landscape.
Below are key advantages of crypto social trading.
Traders can see how other traders make decisions based on varying market conditions, which offers extremely profitable insight on asset types, prices, and market dynamics. This information, if implemented correctly, can give you a competitive advantage and increase total returns.
Sentiments and opinions in the market drive asset prices on many trading platforms. Social trading allows traders to access market sentiments and get a general perspective on the general market. Traders can therefore see what assets are buying and selling most, rising and falling, and even project future market prices.
Cryptocurrency trading is not only a new concept but is also a bit difficult to understand. Therefore, social trading is a perfect way to access information and gain knowledge on cryptocurrency trading and various investment strategies from experienced traders.
Social trading is mainly powered by experienced traders who share trading information and strategies with other traders. Many of them work towards establishing themselves as leading voices in the industry. In addition, they occasionally post about their approaches and point out great educational tools.
In the world of trading, research plays a major role in making investment decisions. As a result, there is a ton of data gathering and analysis and the study of past trade experiences and future trends.
Social trading ensures that you can depend on experienced and reliable traders who can conduct complex mathematics and analysis. This way, you only access a condensed and refined outcome plus the benefits of automated and timely trades.
There are two types of crypto social traders; those who put in the time to conduct their research, monitor trends, and build their skills and trading strategies, and those who rely on successful strategies from other traders.
In the first option, a comprehensive automated platform will open access to official copying and the application of other users’ trading strategies and behaviors. Use the platform’s mirror or copy trading feature to link your entire portfolio to that of a professional trader. You can then copy all open trades from their accounts.
To start, you will need to subscribe to your favorite trader’s channel just like you would on social media. This action will link you to their live feed broadcast, where there is a copy deal option. Should you choose to mirror their trade, the pro trader will execute Trade A. Then, the automated platform will similarly execute your trade to Trade A.
Of note is that the pro trader is not simply driven by altruism when sharing their trading experience borne out of years of research. Instead, experienced traders receive status and money as incentives for holding the hands of other traders.
Popular pro traders with winning strategies will earn a top spot on leaderboards and have more followers. For example, on our trading platform, we have a profit-sharing mechanism where users remit part of their earnings when they hit their trading target goals to reward experienced traders.
Crypto social traders can choose to increase or reduce their mirror trading investment in their pro trader of choice as per the profitability of their strategy.
An alternative social trading strategy is to adopt a few copy trading elements from experienced traders. For example, leverage minimal social trading principles for market sentiment confirmation analysis but keep a tight rein over your trades via indicators and trading signals.
Crypto social trading introduces risks to trades, many of them arising from the original trader’s strategy. So, while you stand to gain from any successful trade and move the original trader makes, you also stand to lose from any wrong investment strategy they make as well.
For this reason, follow your mentors and other users on social media to gain more trading insight. Secondly, diversify your trading portfolio. It pays to spread the risk by coping strategies from different pro traders. This action will keep you winning when your favorite copy trader is having a bad day.
Always perform A/B tests by copying a few traders and singling out the one with the best ROI or profits. Set aside a small budget for your research needs. To keep safe, copy traders’ strategies that mirror your interests and your risk appetite as well.
If you are mirroring the trading moves of a particular trader and sense that their strategy is not working out well for you, pull the plug on the trade and re-evaluate your copy trading moves. Follow these safe trading strategies, reinvest your gains, and grow your crypto social trading portfolio.
With the cryptocurrency space still growing, crypto social trading will gain more ground. Copy trading is a god-send in a nascent sector where traders require a significant level of knowledge to make investment decisions that prevent a string of loss-making trades.