What are the advantages of Copy trade?
A successful and profitable Trader has to do a lot of things such as tracking trades, managing orders, managing emotions, managing psychology, capital management and risk management, ... these are all What is not learned is possible.
To Trader, you must regularly exchange knowledge about trading, learn experience from failure, from the previous ones, create trading methods suitable to the deep style to bring maximum efficiency and learn. how to manage capital, control psychology, manage risk, ...
Copy trade does not need those things, your job is only to find an investor with stable profits and good risk management.
But when you copy trade you will not have to do anything, you just need to choose a good trader, fit your style and Follow them. Then you can play games, read books, work, clean the house, take care of the children, and so on, and your profits will increase just like an experienced investor.
A full-time trader takes a lot of time, effort, and effort to try out new methods, and it takes time to see the effect.
Copy trade, you can easily invest in many different Pro traders to compare yields and test time is also very short. Help bring you a good portfolio and bring stable, secure income despite the fact that you spend very little time and you do not necessarily need to have knowledge or experience about Trading.
Compared to stock investment
The advantage of investing in securities is that you benefit from the basic profit sharing per share each year, but the high profit-sharing stocks have a heavenly price.
Even if the stock price does not fluctuate that year, the return on the stock may not equal the "bank savings interest."
Everyone understands the rigors of the stock market, and if you've ever invested in the stock market back in 2007, you probably know what the pain is.
One more lesson I also want to mention is that people initially participate in the stock market often with the idea of long-term investment, basic investment.
But after a while most of the time become traders, vicious circles of knowledge, experience, time will come back and most of us bake the initial investment.
So compared to stock investment, Copy trade has a much better comparative advantage, because you overcome common problems in stock investment, you do not need the knowledge, experience, time still. to make a profit with Copy trade , which you will rarely see in stock investment.
Compared to bank savings
In the current period, interest rates of bank savings are very high in Vietnam at only about 7% / year. In fact, those who do not know how to use money to use new bank channels to save money.
People without knowledge of finance and cash flow often think that when they have a large amount of money they will deposit their bank and take interest to cover their lives, the reality is very different from what they think. , for example, if there is a hyperinflation such as Venezuela or Zimbabue, their money will be swept away no matter how big it is.
I confirm this because the interest rate on bank deposits is 7% / year, but minus the annual consumer price increase, the actual interest you receive is only 3%. Too low, right ???
So do not think saving bank is a safe channel.
Compared to bank deposits at a low interest rate, you invest specifically using copy traders, I find that you earn 15% / year is extremely easy if you know how to allocate capital to investors.
15% compared to 7% plus the power of the 8th wonder "compound interest" will be a tremendous amount of money when calculated over a long period of time. Therefore, compared to bank savings, copy trade is more advantageous.
Compared to real estate investment
In the real estate era, you can make a lot of money from real estate. Maybe 20, 30, 50 or even 100% of your money.
Real estate investment is one of the safe investment channels and is almost a compulsory option in the portfolio of an experienced investor.
However, the disadvantage of real estate is its low liquidity and large amount of investment. You are also at risk of losing money when real estate freezes, your assets not only increase but also decrease.
Copy trade may not be comparable to the real estate portfolio in its prosperity, but it overcomes the disadvantages of real estate quite well thanks to low investment capital, quick liquidity and reduced risk. The capital for this portfolio is relatively small.
Therefore, you should consider Copy trade to be a perfect addition to your overall portfolio, including real estate.
What is the profit potential of Copy trade?
With people who copy the orders of others like you, you can easily earn copy profits without spending much time, effort, knowledge and extensive experience about the market.
- In the current period, the bank interest rate is only about 7% / year. And with a rapid growth rate of annual consumer prices, the actual profit is only 3% / year.
- And bank deposits are not as secure as you think! For example, if Vietnam has a hyperinflation such as Venezuela or Zimbabue, your money will not fly, no matter how big it is.
- Compared to the bank deposit of 7% / year, the profit when you copy the trade may be up to 15% / year or more. And it is very easy and safe if you know how to choose and allocate capital for copy investors.
For traders (whom you make copies of), in addition to making a profit from trades made on their own, they are paid by the exchange and may also receive a small fee (from the delivery fee). translation of their followers). If the number of followers is large, the amount of money making copy is much, the monthly amount they earn is not small.
Exchanges: They have more members participating in the exchange, the trading orders will be made more, they will charge fees from arising transactions plus withdrawals or account management. As stated above, a portion of the transaction fee will be redistributed to traders to encourage them to share their experience and trading methods.
Why is Copy trade free?
You can easily get profit when copying transactions without spending time researching markets or methods, strategies, capital management, psychological management, ... and many other things.
As for Pro traders, what do they get? In addition to making a profit from the trades they make, they will also receive 20% of your profits and their followers. If the number of Followers is large, then the amount of money they will collect will be very large.
The principle of win - win between 3 parties
For traders (whom you copy), in addition to making a profit from trades made on their own, they are paid by the exchange and may also receive a small fee (from delivery fees). translation of their followers). If the number of followers is large, the amount of money making copy is much, the monthly amount they earn is not small.
With people who copy the orders of others like you, you can easily earn copy profits without spending much time, effort, knowledge and extensive experience about the market.
Exchanges: They have more members participating in the exchange, the trading orders will be made more, they will charge fees from arising transactions plus withdrawals or account management. As stated above, a portion of the transaction fee will be redistributed to traders to encourage them to share their experience and trading methods.
The exchange pays salaries for successful investors
For example, at eToro , you can view the trading levels and the commission received for an investor.
An investor of Elite level will receive a fixed monthly amount of up to USD 1,000 plus 2% of the transaction fee incurred by followers in that month.
This means that the more beautiful an investor with porfolio and the more followers or manage the bigger the follower's funds, the more money.
This is also the motivation for social trading traders to improve their knowledge, experience and strict capital management in order to bring the highest profit and stimulate followers to follow them.
Conclude
The purpose of copying trading and investing social networks is to help beginners learn more about trading strategies of other traders.
This is an extremely good means of learning to help you gain more luggage in this fierce battle. Copying transactions will allow them to interact with many other traders.
If you really want to learn more in trading yourself, you should use copy trading, which is a new revolution of technology today. But if you think copy trading is a get rich quick model then this is a wrong idea.
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