Is It A Good Idea To Copy Other Investors’ Trades?
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.
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 sophisticated ways to trade 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!
When It’s A Bad Idea To Copy Other Investors’ Trades
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!
Final Thoughts
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.
Category: Trading Penny Stocks
