Learning trading is a long and tedious process that requires years of practice. However, others simply don’t have the time to monitor their screens all day or analyze market movements. This is why many beginners—and even experienced traders—choose to delegate the tasks of analysis and position-taking to other traders through copy trading.
What Is Copy Trading?
As the name suggests, copy trading allows you to directly copy the positions of another trader or investor. Essentially, it involves allocating part or all of your portfolio to a trader to benefit from their trades, recording the same gains and losses.
By connecting your profile to another trader’s, you can copy all their current market positions as well as future ones. If they open a new position, yours opens too; if they close a position, yours closes as well.
However, regarding portfolio performance, remember that if the trader you copy wins, you win—and unfortunately, if they lose, you lose too. That said, this doesn’t mean you have no control over the outcome. Most platforms allow you to close trades, open new ones, and more.
Copy trading is a form of community trading where one trader’s open and closed positions are copied by another trader’s account. It can be automated, semi-automated, or done manually. As it helps new traders earn money in the market, this trading option is becoming increasingly popular.
History of Copy Trading
A few years ago, copying other traders seemed unrealistic, but today, it’s simple. Thanks to technological advancements and the efforts of companies to democratize trading and investing, copy trading has never been easier.
The history of copy trading dates back to the early 2000s. Back then, those who wanted to copy trades received trading signals and instructions via email. They’d then log into their computers and manually enter orders.
However, by the time someone opened the email and placed the order, significant time had passed—a problem for short-term and day traders. Today, it’s entirely possible to copy trade effortlessly and automatically.
How Copy Trading Works
Copy trading links your account to another trader’s, automatically copying all their open trades and potential activities to your account. A trader might follow a long-term investor in the stock market for portfolio diversification.
Followers (those who copy) decide how much to invest and can adjust funding based on the tracked trader’s progress (called a "Popular Investor"). You can review their past trades and performance.
Thus, you can choose to copy traders with strong past results and low-risk strategies. However, copy trading carries risks. Traders should always conduct their own research and gain a deep understanding before investing.
The terms “social trading” and “copy trading” can be confusing. Social trading is a way for beginners to learn trading and invest by interacting with experienced traders via social platforms. It involves sharing strategies or technical analyses.
Copy trading focuses on replicating trades and profiting without trading yourself. Platforms like MEXC combine both features, contributing to their success.
👉 Discover the best copy trading platforms
Copy Trading does not constitute investment advice. Your capital is at risk.
Pros and Cons
Like all trading methods, copy trading has its advantages and disadvantages. Let’s explore them.
Advantages of Copy Trading
Whether for diversification or leveraging expert traders’ experience, copy trading offers numerous benefits:
A Great Way to Start Trading
Copy trading is fantastic for beginners. You don’t need to be an expert—someone else does the work for you, reducing risks. Ideal for those without time for day trading.
Diversification
Copy trading expands your investment portfolio. You can copy multiple traders, resulting in hundreds of monthly trades. Diversifying across traders and assets offsets losses from poor performance.
Access to Global Markets
No one masters all financial markets. With copy trading, you can tap into worldwide markets by following specialists in commodities, forex, etc.
Improve Your Trading Knowledge
Copying seasoned traders helps you learn. Observe their strategies while developing your own.
Accessibility
Copy trading is simple and free, making markets more accessible, especially for beginners. It suits all levels, regardless of capital.
Time-Saving
Forget ads claiming trading takes minutes a day. Truthfully, it requires hours of research. Copy trading lets you trade passively—like investing in an ETF.
Disadvantages
Trading is inherently high-risk. Copy trading doesn’t eliminate these risks:
Market Risk
You risk losing money if the copied trader’s assets underperform. Only invest what you’re willing to lose.
Choosing Trusted Traders
Finding reliable long-term traders is challenging. Research thoroughly and accept that even experts make mistakes.
Liquidity Risk
Illiquid assets may prevent exiting positions as planned. Understand each instrument’s liquidity (e.g., EUR/USD vs. emerging pairs).
Dependency
Relying solely on another trader’s actions risks stagnation. You might learn nothing by just following.
Copy Trading does not constitute investment advice. Your capital is at risk.
Step-by-Step Guide to Copy Trading
Follow these steps to start copy trading:
- Choose a broker (we recommend MEXC).
- Open a trading account.
- Deposit funds.
- Begin copy trading.
Selecting a Broker
Reputation matters. MEXC is our top pick for its advanced tools, statistics, and API integration.
Opening a MEXC Account
Visit MEXC’s official site, click "Sign Up," and fill in your details.
Depositing Funds
MEXC supports crypto purchases via third-party services like MoonPay. Minimum deposits vary (e.g., 50 USD for USDT).
Starting Copy Trading
Link your account to a pro trader, set parameters (assets, trade amount, margin mode), and let MEXC replicate their trades.
Copy Trading does not constitute investment advice. Your capital is at risk.
Tips for Beginners
Pick Traders Carefully
Examine traders’ follower trust and past performance. Avoid those with few copiers or erratic results.
Aim for Reasonable Performance
High annual returns may signal luck or high risk. Look for steady progress.
Trade Volume Matters
More trades (100–200/year) indicate expertise. Day traders naturally have higher volumes.
Monitor Risk Levels
A consistent Risk Score (e.g., 0–10 on MEXC) reflects discipline. Opt for low-risk, high-performance traders.
Prioritize Experience
Consistency is key. Copy traders with 12+ months of activity and mostly profitable months.
Copy Trading does not constitute investment advice.
Top Copy Trading Platforms
| Platform | Key Features | Leverage | Fees |
|---|---|---|---|
| MEXC | Leader in copy trading, 3,000+ cryptos | Up to 125x | 0% maker, 0.1% taker |
| Binance | Global exchange, 350+ cryptos | Up to 125x | 0.02% maker, 0.04% taker |
| OKX | "Steady Trader" feature | Up to 10x | 10% profit share |
Why MEXC?
- Ideal for beginners.
- Low futures fees.
- Wide selection of elite traders.
Crypto assets are a risky investment.
Conclusion: Should You Use Copy Trading?
Copy trading is an excellent way for beginners to start trading without technical know-how. It’s also useful for diversification or saving time. Our top recommendation is MEXC.
FAQ
Which markets support copy trading?
Forex, stocks, commodities, and cryptocurrencies.
What’s the best copy trading platform?
MEXC for its tools and user-friendly interface.
How does copy trading work?
You replicate a pro trader’s trades automatically.
Copy Trading does not constitute investment advice. Your capital is at risk.