What is Copy Trading?
In theory, the concept is simple: to automatically replicate the operations of an experienced trader. Platforms like Binance and thousands of articles offer precise technical explanations. However, the distance between understanding the theory and successfully applying it to your real capital is considerable.
Practice reveals that, without proper management, you can harm not only your own performance but even affect the metrics of the trader you are copying. This often occurs when ignoring two critical parameters that every serious operator specifies:
1. Minimum Investment Amount: This is not an arbitrary figure. A capital is suggested that, ideally, should not be less than 25-30% of the amount managed by the copied trader. Why? So that changes in the size of their positions (size) are replicated in your account proportionally and effectively, maintaining the same risk management. A very low capital distorts the strategy and can generate negative results at the first market fluctuation.
2. Time Horizon: Copy Trading is not a tool for seeking quick profits in hours or days. Its true effectiveness is demonstrated by maintaining the copy over extended periods (weeks or months), allowing the trader's strategy to display its statistical edge. Patience and emotional control must be exercised!
In summary, #CopyTrading is a powerful tool and a notable advantage for investors. It works like an "automatic pilot" that can generate passive income or, at least, provide practical exposure to the market, while freeing up time for you to learn, analyze, and develop your own trading skills. Its success, however, entirely depends on your discipline to select the right trader and scrupulously respect their operational parameters.
Note: if I am trading Futures and I continuously make trades with one or two tokens, imagine a person with 60 or 100 Cryptos simultaneously. Without a doubt, I prefer this Option. And I hope to activate with @NómadaCripto soon.