Investing is a very interesting topic, and thanks to recent
technological advances, we have more choices now than ever before when we
decide to start investing. One of the newest ways to make money in the market
is the process called copy
trading. Essentially, this is the process of copying other
investors' trades in an attempt to make money in the market off of their
insights. However, this new form of investing brings up a big question... Is it
really a good idea to copy other investors' trades? The answer really depends
on you. Today, we'll talk about when it is, and when it's not a good idea to
copy the trades that others make.
As with anything else in life, there's always good and bad. Here are a couple of instances in which it would be a bad idea to copy other investors' trades...
Copy trading is an incredible opportunity for many, and while in most cases, it's a good idea to copy the moves of others, in some cases it may be a bad idea. Ultimately, the decision is up to you. Overall, copy trading can be very profitable, but only if done properly.
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.
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When It's A Good Idea To Copy Other Investors' Trades
There are a few instances in which it might be a good idea to
copy other investors' trades. Here they are...
- When You're A New Trader – If you're new to
the market and don't have the time to learn about technical and fundamental analysis, copying others may be a
good way to go. After all, when you find profitable traders, and copy
them, you really don't need to know much about the market to make a
profit.
- When You Don't Have A Ton Of Time – As a
trader myself, I have to admit that it does take some time. Most of the
time is devoted to researching the market to find good trades and decide
how to trade them. However, if you don't have the time to properly analyze
the market before the trades, it may be a good idea to copy trades made by
other investors.
- When You Have A Strong Opportunity – Some copy
trading platforms like Copyop offers a sophisticated way of trading and copy other traders.
For example, they will give you the ability to see successful trade
percentages. If you find a trader with a very high successful trade
percentage, it may be a good idea to follow that trader regardless of the
circumstances. After all, if he is making money, you can make money
copying him!
As with anything else in life, there's always good and bad. Here are a couple of instances in which it would be a bad idea to copy other investors' trades...
- Blind Copying – If you don't have the time to
look into the investors you have the opportunity to copy, it's a bad idea
to copy their trades. After all, if you're blindly copying anyone, you
could be copying someone that loses a lot of money, and by copying them,
you would lose as well.
- When You Demand Control – There are several
investors out there that feel more comfortable when they have control over
their trades. The reality is that it's hard to put your money in the hands
of someone else. If you don't feel comfortable letting others do the
research and putting your destiny in their hands, it's probably not a good
idea for you to us copy trading services. It would simply be too
stressful!
Copy trading is an incredible opportunity for many, and while in most cases, it's a good idea to copy the moves of others, in some cases it may be a bad idea. Ultimately, the decision is up to you. Overall, copy trading can be very profitable, but only if done properly.
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.
© EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle