How healthy is copy trade?

[DPHOR]

I had a friend who discovered a channel on social media and since he has been on.my neck to check it out how it works, thus, I am not that a fan of copy trade or even trade above spots trading talk less of copy trading someone's trade.
From experience and with post I have came across on this forum that copy trade could be bad or even using tools to start trading there could be errors or being liquidated.
Now I want to know, must you also used the same amount from whom you are copy trade from? Reason being that there are people who could funds about $1m in their account to trade while there are people who may likely funds 100$ to their account while trading, and if using same lot size as their copier don't you think that person could get liquidated?

[Charles-Tim]

Now I want to know, must you also used the same amount from whom you are copy trade from? Reason being that there are people who could funds about $1m in their account to trade while there are people who may likely funds 100$ to their account while trading, and if using same lot size as their copier don't you think that person could get liquidated?

What that is important in copy trading is to get the direction of the person that you are copying right, so copying him will make your position to be automatically follow the position of the person. You can decide to use any amount of money that you want and also use the leverage of your choice.

[Rruchi man]

Now I want to know, must you also used the same amount from whom you are copy trade from? Reason being that there are people who could funds about $1m in their account to trade while there are people who may likely funds 100$ to their account while trading, and if using same lot size as their copier don't you think that person could get liquidated?

It is necessary to manage your risk even when copy trading; many times you can't have the same account size as the trader you intend to copy, so it will be foolishness to try to use the same lot size/leverage as they do. That will mean taking the same risk as they are taking, a risk that you do not have the capacity to manage.

In forex, I have seen some traders use lot sizes up to 50 to even trade very liquid pairs like XAUUSD. Imagine copying the trade of such a person and using the 50 lot size on your $100 account. You are going to be liquidated in seconds.

The same thing goes if you are in a signal group, which is not advisable, but you don't have to use the same lot size/leverage as the person sending the signal; manage your risk.

[sokani]

I had a friend who discovered a channel on social media and since he has been on.my neck to check it out how it works, thus, I am not that a fan of copy trade or even trade above spots trading talk less of copy trading someone's trade.

Why doesn't he learn how to trade himself? I think it's better to at least try and if he's not good at it, then he can copy trade.

Now I want to know, must you also used the same amount from whom you are copy trade from? Reason being that there are people who could funds about $1m in their account to trade while there are people who may likely funds 100$ to their account while trading, and if using same lot size as their copier don't you think that person could get liquidated?

No. It's not a must to trade with the same amount as the trader whom you are copying from. But most of them would want you to trade with something reasonable so you could get some profit and also be able to afford the subscription.

[rat03gopoh]

Almost entirely unhealthy, lots of manipulation, misleading statistics, potential pump-dump, conflict of interest between platforms and trading leaders.
Simply put, if someone really has a trading strategy that consistently makes big money, they don't need hundreds of people copying their positions because they can compound their profits from previous profits.

Now I want to know, must you also used the same amount from whom you are copy trade from?

No, but there is usually a minimum capital requirement to copy other people's trades.

Reason being that there are people who could funds about $1m in their account to trade while there are people who may likely funds 100$ to their account while trading, and if using same lot size as their copier don't you think that person could get liquidated?

Yes, but for pump and dump schemes, that amount is not significant for trading leaders. They open other (reversed) orders outside of copy trading which are larger and the liquidity comes from all the copier funds that join.

[Itz-prisigold]

I have never liked copy trading and from what I've seen it looks overly risky for me. One element people always overlook is the account size. If you are trying to copy someone trading with a $1m account and you are trading with $100, that is going to end up in a disaster. You can get liquidated quite easily.

Copy trading can be bad, but is also not going to kill you if you are careful. The biggest thing is to understand the risks involved, scale everything out and don't follow someone just because they are making profits. I think copy trading can actually be a good way in learning the strategies, but it should never replaced personal understanding of trading and risk management. If it's me, I will rather start with small amount of money, try to adjust and observe how things are going rather than just copying someone else's trades.

[Beparanf]

It’s good if you will copy a professional trader will good over PnL for a long time not only a high PnL on short term trade.

I don’t use this feature because I preferred using my own bot and setup but I do like this feature especially for those that doesn’t want to setup their own trade but they want to earn via trading since some professional trader is indeed worthy to follow.

Exchange like bonus mostly highlight only profitable trader for copy trading.

[Charles-Tim]

It’s good if you will copy a professional trader will good over PnL for a long time not only a high PnL on short term trade.

Copy trading is not as easy as many people think. Let me explain it better.

Example is someone that people are copying. Assuming it has opened the trade for days and he has PnL of 529% already. Anyone can still copy the person. But what if the market change direction if someone just copy him at 529% but the PnL goes down to $437%? The person is still in profitabilityi but the person that copied him is in loss.

The best is to learn how to trade.

[Maslate]

Copy trading may not be highly encouraged in this forum but if we look at it in a logical way, we can say that copy trading leads us to learn from experts and adopt their working strategies and techniques, it save us time, it reduce emotional trading, and it can lead us into potential returns.

However, if it means copying the trading capital as well, that is another story to tell. You might only increase the risk of losing especially if you are still learning the process. Just trade on what you can afford to lose and trade at your own risk.

Furthermore, one should realized that copy trading every time you trade may be unhealthy in the long run. You are not learning on your own since you only become more reliable from other traders which is very wrong when trading.

[Strongkored]

I once did copy trading in forex, but unfortunately, it went badly, perhaps because I didn't really understand how to choose traders with a good win rate, which resulted in losses.
However, since it is not done with many trades, it is possible that my assessment is wrong, but for me, I don't want to do copy trades because trading with your own analysis will be better because we will try to improve our skills to be better from day to day.

[Frankolala]

You don't need to use the same amount of money to open a position with the person that you're copying his trade because you are to trade with the amount of money that you can afford to lose. You don't know if the amount the person used to trade is what he can afford to lose. However, when doing copy trading, small amount is good because you don't know if the person knows how to trade or not.

[EarnOnVictor]

-Snip-
Now I want to know, must you also used the same amount from whom you are copy trade from? Reason being that there are people who could funds about $1m in their account to trade while there are people who may likely funds 100$ to their account while trading, and if using same lot size as their copier don't you think that person could get liquidated?

I'm surprised that despite the reply garnered by this thread so far, none has actually answered your question.

The answer is no, provided you didn't choose copying ratio of 1:1. No broker will even allow you to do a thing like that. I don't know how it's happening in the crypto exchange world, however, since I saw "lot size," I knew its the traditional broker system, which might be different from the crypto exchange system. In broker copying system, there are many safety features you can choose from, and some brokers have limited them for you to automatically subscribed to the safest. There is a feature called "proportion" (though automatic in selection with many brokers), will automatically adjust the risk in proportion to the master account. So, if the signal provider account has $1,000, for example, and the follower account has $100, the lot size received by the follower account will be 1/10 of the master account. The same goes for the two if it's the other way around. If the master account is $100 and the follower account is $1,000, the lot size received by the follower account is 10x of the master account.

[dunfida]

I had a friend who discovered a channel on social media and since he has been on.my neck to check it out how it works, thus, I am not that a fan of copy trade or even trade above spots trading talk less of copy trading someone's trade.
From experience and with post I have came across on this forum that copy trade could be bad or even using tools to start trading there could be errors or being liquidated.
Now I want to know, must you also used the same amount from whom you are copy trade from? Reason being that there are people who could funds about $1m in their account to trade while there are people who may likely funds 100$ to their account while trading, and if using same lot size as their copier don't you think that person could get liquidated?

I wont never ever consider copy trading on which it is something that wont be that making me confident about into the results. I would rather prefer on losing with my own manual traders rather than on putting up some funds on a trading account and let it run with others bot or trading methods on which it would be that leading out with that kind of regret at the time that your trading account is liquidated or being blown out. So it would be just that depending into someone on how they would be that handling themselves in regarding about trading whether they would be that contented when it comes to trading bot and copy system or they would be going for manual on which this would be the best approach. So it will be that up to your preference on which way you would prefer since its your money then you do have the control on what to do.

In any way then i dont really like on copy trading or any sorts of automation because i dont want to lose money on just following someone and this isnt something i dont really like because it do leave out that regret. I have experienced it on the past and i have learnt out.

[Dewi Aries]

Copytrading can be very helpful and make it easier for us to achieve profit targets, but it's not as simple as you think. It doesn't mean you just deposit a certain amount of money, follow someone else's strategy, and let it run its course. You still have to review and correct the strategy from various angles before making a decision. This means that at least some knowledge is required. This is also what I do when I try to follow other people's predictions. If I'm not sure about the prediction, I won't follow it.

[Mrbluntzy]

It's partially healthy, I don't want to say it's so unhealthy because some people claims that they have made profits from copy trading but speaking from someone's experience, they got their account blown just on the first day they decided to copy a trade from a live trader on YouTube. The real story was that he has been following the guy's live sessions on YouTube and just by seeing the success rate of this guy, he took one trade and his account went down because of  that trade. I won't advise copy trading due to this person's experience, it could happen to anyone.

[Alphakilo]

Copy trading unlike bots, aim to make trading easier with at least the assurance of some profit, but in reality just as it is risky copying from a neighbor during an examination sitting, copy trading could be a psychological and financial trap for you who is trying to earn some passive income with the little you have.
If a trader knows and have studied the basic principles and approach to trading, they would understand that copying others trade might just be too bogus to understand and comprehend because of the kind of positions that is opened and am sure the leverage position is what you could on a normal day avoid because of the high risk on liquidity that is a possibility.

[Bitcoin_Arena]

Have you ever wondered why copy trading isn't popular? Have you wondered why exchanges even carry out copy trading promotions? Of course they need those trading fees from you, but in general copy trading isn't as awesome or easy as it looks. Everyone has a trading strategy that works for them and a risk management strategy that is suitable for them.

I would recommend your friend first learn how to trade by himself. He can start with a demo or small account and get to know the different aspects of trading before he starts thinking about copy trading.