What forms of copy trading are there?

There are basically two approaches to copy trading:
1. issuing a certificate

Certificates are derivative financial products. A trader creates a model portfolio and investors buy associated certificates via their online broker. This replicates this model portfolio 1:1.
2. networking with other traders

The second possibility does not refer to a specific product, but to the trades of a single trader or a few traders. Depending on the size of one's portfolio, the buy and sell orders are transferred to one's own portfolio in the same percentage.

How does Copy Trading work?

Social traders connect with popular investors via copy trading platforms. This is usually subject to a fee. For the search for suitable top traders, a number of filters are available with which one can select the choice on the basis of various criteria (such as high return, risk level, certain markets, etc.).

As soon as an initial network has been established, other social traders can be copied using the Copy Trader function of the corresponding provider. With a single click, all trades of a social trader are copied. All trades after taking https://exness-vietnam.asia/trader-app/ are then automatically adjusted to the size of one's own portfolio.

The degree of automation can also be adjusted on most trading platforms. Trades can be set fully automatically, semi-automatically or completely manually. In the latter case, the trader only receives the signals of the top trader and must decide for himself.

All positions and the progress of trades can be followed live. Reputable platforms for copy trading are also transparent with regard to their signal providers and disclose various information from performance to individual trades. Most top traders also disclose their decision-making principles and answer questions from the community.

This allows you to diversify your own portfolio very quickly. Just copying a few carefully selected Popular Investors makes your own portfolio very broad. With just a few clicks, several assets from different markets and with different risk levels can be added to one's own portfolio.

How do you recognise good Top Traders?

Top traders are so-called signal generators. All their actions ultimately determine the trades of many investors. The aim of copy trading is to pick out the few successful traders from the huge pool and transfer their success to one's own portfolio.

Laypersons in particular can have difficulties recognising suitable top traders. Most of the time, they do not have enough knowledge to be able to understand and evaluate the investment actions. And a simple comparison between the respective top traders only offers insights into the current, but not the future performance.

It is therefore particularly important to find the right Popular Investors for yourself. For this, one can use several clues to make a decision:

I. Past portfolio performance

This is no guarantee of future profits, however, as past successes are not necessarily transferable to future market performance. However, they do demonstrate the ability to adapt flexibly to changing market conditions, provided the Popular Investor can demonstrate predominantly profits.

II. Vita

The experience a top trader has gained during his professional career is a good indicator of his expertise.

III. community

The pure number of followers is not a suitable criterion, as one must assume that most followers themselves only trust the number and hardly bother about the concrete performance. Only success stories and positive discussions about a trader should be used as information.