Binance Futures has introduced a new feature called Copy Trading. In simple words, copy trading is a method of replicating the trading moves of an expert trader. They may be in the market for the short term or long term, but if users are impressed by their moves and feel that their visions align when it comes to growing the portfolio, then they can automatically deploy those strategies.
Copy trading has been brought to the platform to help novice and experienced traders alike. For beginners, it means that they have a chance to learn from experienced, seasoned traders. Experts can simply let go of the responsibility of covering unnecessary grounds for trading and make well-informed decisions.
The lead trader here has access to revenue sources of commission and profits. It is interesting to note that Copy Trading does not necessarily mean fetching profits. A lead trader incurring losses will also reflect on the books of others who have been replicating their moves. It, therefore, becomes important to choose the right lead trader.
Having said that, there are metrics to consider, but they still don’t guarantee profits every time. These are:
- Discovering lead traders who have been in the market for a long time
- Analyzing and following their portfolio
- Setting up investment parameters like Fixed Amount and Fixed Ratio
- Monitoring & learning, wherein it is the sole responsibility of the trader to make sure that their portfolio does not replicate loss-making strategies.
Advertisement
If it does, then they can revisit the phase of discovering a lead trader. Overall, metrics that traders can consider are trading history, return on investment, and preferred strategies. Investment size must be chosen to make necessary adjustments to profits and losses.
Alternatively, novice traders can start their reading journey with Classic Trading. It closely resembles the advanced version of the platform while offering every feature in a user-friendly manner. It is convenient to operate and has all the crucial information on a single page. More details can be found in the Binance review, which further discusses the advanced trading platform.
The benefits that Copy Trading gives are learning opportunities, the power of expertise, flexibility, diversity in strategies, and liquidity.
One trader could be following multiple lead traders. Thereby, grasping experience from more than a single source. It gives a sense of learning from a teacher in the classroom. Traders only have to sit and watch how the game plays out. Volatility is definitely a factor at play, but situations more or less remain the same. So does the way to react.
Advertisement
Traders who are confident in their skills and/or have made numerous profits with their own strategies can become lead traders. With this, they access a 10% profit share and 10% trading commission rebates. Meaning, they can monetize their trading expertise. For others, it is a way to learn and grow before evolving into a trader now independent of making their trades.
