Crypto copy trading is a new way of making money for passive investors by investing funds in already profitable day traders through a crypto copy trading platform. It might sound too simple for most readers but all that is needed of you is capital, then you are free to pick among hundreds of talented traders to manage your money through their daily trading activities.
This is way more effective than you trying it out for yourself, especially if you are a beginner. You will save time as well. If you don’t have the time or patience to stay glued in front of the screen reading crypto charts for 12 hours per day you can let someone do it for you.
It is a great way to generate a passive income as an investor and the best thing is that you don’t have to lock up your money. You can change trader or strategy any time you want until you have found what works for you.
Now, you probably have a lot of questions about how this really works, what it means to copy other crypto traders, and how much money you need to get started. In this article, we will cover the ins and outs of crypto copy trading, how to do it, and what you need to think about before getting started.
- How it works
- How to copy other traders
- Best traders to copy
- How much money do you need to start?
- Is it a good idea?
- How much money you can make
- Does it really work?
- Is it a viable long-term strategy?
- Final works
How crypto copy trading works
The way crypto copy trading works is by combining two parties, the trader and the investor. The day trader is the brain that knows how to speculate the markets profitably through thought-out strategies and proven track records.
The investor has the money that will fund the trader and whenever the trader makes a profit, they both share the winnings.
It’s a close agreement that is binding through the crypto copy exchange or trading platform where both traders and investors meet and agree upon pre-defined rules.
The trader has to show a good track record in order to attract investors and the investor is free to choose among several different day traders with different trading approaches and strategies.
Everything is transparent, from daily drawdowns, the most profitable strategy, and longest holding times, to overall profitability during the last month, week, or day.
The better the track record is for a trader the most funding he will receive from passive investors. However, the track record is of course subject to change, and should a trader perform poorly during a couple of weeks he might lose funding due to investors withdrawing their funds.
As you can see, this is a natural selection where only the best survive and the weakest lose. Most of the time there are a few traders who receive the majority of the funds from passive investors.
How to copy other crypto traders
When it comes to copying other traders there are some important factors that you need to consider such as the platform you choose, how much you want to invest, and of course the copy trader you select. Most day trading crypto platforms will have an easy guide to follow.
My recommendations are that you test a few of them out until your find one that fits your own style of trading. It can vary a lot since some traders are prone to taking on more risk and have bigger drawdowns before they hit a big winner.
Others take small profits very frequently without letting the risk get out of control. However, the statistics are usually very transparent depending on the copy exchange you choose.
Here is a step-by-step guide on how to copy other crypto traders in 2023:
- Choose a crypto copy trading platform.
- Create an account.
- Make an initial deposit with crypto or fiat.
- Go to the marketplace.
- Browse copy traders.
- Select a copy trader that fits your profile.
- Choose how much of your account you want to invest.
- Click copy!
That’s it. There is not much more to the process of copying other traders. From here you need to supervise the performance of the trader and should he or she underperform you can always withdraw your funds from that trader and pick another one.
Some of the best crypto traders to copy
Finding the best crypto copy traders is key to ensuring long-term success in this investment strategy. After all, your plan should be to keep investing with the same traders as long as he or she shows a profitable result.
It’s a little bit like finding a good investment opportunity in the stock market, only here you can decide how much risk you want to take on and how aggressive the trader should be.
Now, we have a couple of good crypto copy websites to choose from and there are plenty of talented traders on all of them. For me, it’s mostly a matter of which interface I like better.
Personally, I prefer BitYard simply because it is very user-friendly and it’s dead simple to filter among the traders with metrics such as:
- 30-day return on investment
- 30-day win rate
- Cumulative followers
- Cumulative return on investment
- Trading style (Low frequency, High frequency, High risk, Steady, Long term, Short term)
- Number of trading days
This can help you a lot while you are making the choice of which trader you choose. For example, if you have a small amount of money and are looking for quick gains, you can adjust the filter for Short term and High risk.
Keep in mind that this kind of approach is prone to higher risk.
Should you be more of a patient investor that doesn’t need the money next week you can choose a Long term and Steady with a Low frequency of trades.
This will assure that you find a trader who is focusing more on a swing trading approach. It will also ensure that your drawdowns are smaller and that the overall risk is lower.
Some of the top crypto copy traders on BitYard right now are:
All of these traders have incredible 30-day track records with a high win rate that most beginner traders can not emulate. Go to the site to check them out but remember to see other traders too as the list keeps updating all the time, there might be a couple of new faces on the platform when you check.
Are you looking to become a skilled crypto trader?
Check out our detailed crypto trading guides in our educational center.
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How much money do you need to start?
The amount of capital you need to start with when copying other crypto traders should be at least around €200-€500 if you are focusing on a long-term approach. If you are looking for a short-term copy trader then I suggest that you make a larger deposit since the daily percentage will be lower and you need more capital to earn money.
This also comes down to what trader you choose and how they execute their traders each month. It is perfectly fine to start with only €50 if you are on a tight budget, however, keep in mind that it will take longer to build up a portfolio this way.
Below is a general idea of how much you need to start crypto copy trading with consideration of how much capital and the time horizon you are aiming for.
|Low risk||Medium risk||High risk|
These are just some general guidelines and it’s going to depend on each investor how much money you want to put down as your first investment.
This table shows how you should distribute your risk over a certain time frame. For example, if you are a long-term investor with a low risk you don’t have to put down that much money since your approach will be very passive.
However, if you are a low-risk investor and want to copy a trader for a shorter time, let’s say 3 months, then you need to add more capital to see results.
Compare this to a high-risk investor that wants to invest for a month only, his risk will be lower due to the shorter time frame so he can afford to risk more capital.
So, a good amount of money to start copying other crypto traders with is between €1000 – €10.000 depending on how much risk you want to take on and the time frame you are looking at.
Is it a good idea?
Crypto copy trading is a great idea for many reasons, first of all, it is a good source of income because it can really generate a passive stream of cash flow to your account if you choose the right trader.
Secondly, if you don’t have the time to learn the crafts of day trading cryptocurrency and bitcoin but you still want to be involved with the markets, then it’s a fantastic opportunity to join a community of traders who all fight for the same thing, to beat the markets.
Thirdly, as a passive investor, you have a couple of choices where you can put your hard-earned money. Either you put them in an index fund and let the grow there for a couple of years until your find a better investment opportunity.
You can also buy other investment products such as ETFs or other derivatives of popular markets. However, if you are bored of the old-school products that traditional stock exchanges have to offer and you want to be a part of a more modern movement, then crypto should be your number one choice.
By copying other crypto traders you can earn a passive income that is paid in cryptocurrencies in your wallet every week.
So, if you still ask yourself if crypto copy trading is a good idea I think you don’t need to think twice about it. The only question you should ask yourself is which platform should you choose?
How much money can you make?
This is a great question and most crypto investors have no idea how much money you can make with crypto copy trading. After all, it is a pretty new product and I understand that you haven’t had much time to explore the results yet.
Copy traders can average up to +150% per month if they work hard and have what it takes to beat the market. Some of them even make up +500% during the good months with the use of leverage.
A more likely result is to make somewhere between +20% and +50% per month. This is a great result considering that most stable long-term investments average around 8-10% per year.
However, it is all about finding the right copy trader, and sometimes you need to know when to switch.
I would recommend signing up on several platforms to see how the traders perform and follow them closely. There are usually a couple of them with more followers and these are the traders that you want to keep an eye on.
They have followers for one good reason, they know how to trade. If a trader has a bad month or even a bad week they will lose followers since none wants to give their profits away.
So, each crypto copy trader will do what it takes to keep the return on investment high and the drawdowns low.
But, a reasonable amount of money you can make from copying other traders is around 10-30% per month. Then you just need to calculate your own stake and how much you can afford to invest.
Does crypto copy trading really work?
This product is an amazing combination of traders and investors coming together on regulated cryptocurrency exchanges to create a perfect synchronization.
The investors fund the traders and the traders work their magic to produce returns for them both.
But does it really work? Can you earn money by copying other crypto traders?
Yes, you can. As long as there are profitable traders there will be profitable investors who put their money in the hands of these traders.
In fact, you can make a decent living if you are well-funded as a copy investor. Imagine investing €10.000 on a couple of highly skilled traders that each generate between 20% and 50% per month. That’s not a bad salary for that kind of investment.
However, it is worth saying that copying other traders is not going to be a walk on roses where you simply dump your money in the lap of a trader and wait for the money to start pouring in.
You need to do your homework on each trader and the strategy they employ. Some traders can go days and weeks without profits until they hit it big and make +100% in a few trading days.
Traders might also lose their edge in some market situations so it’s worth eyeing several traders on your platform or on several exchanges.
So, yes, copy trading works very well and you can make money with crypto doing only that. It’s just a matter of finding the right platform and matching your expectations with the right trader.
Also, if you re-invest your winnings you can see it as a crypto dollar cost average strategy where you compound your gains to make more money.
Is it a good long-term strategy?
Copy trading as a long-term strategy can definitely work if you are willing to put in some hours of research and update your portfolio of traders at least once per week.
Most traders fall in and out of good performance so it takes some work from the investors themselves to stay on top of the list of available professionals.
If you are dedicated and have a system that is built for allocating your capital and portfolio in a way so that you can rotate between the top performers you could make a lot of money over the course of a couple of months and even years.
Since most people see it as a quick money grab you should think differently and create a proper system for yourself. But for that to work you need to invest some time.
I would recommend trying things out and seeing how much money you can make in a month and then repeating the process if it was successful. If you need to change a few variables, do so, and then keep track of what works and what doesn’t
Long-term copy trading in cryptocurrency requires finesse and an eye for detail when it comes to selecting the perfect trader to follow. You should also spread out your risk among several of the top professionals on different exchanges to maximize your distribution of risk and potential.
You will also save a lot of time since you don’t have to stay glued to the screen and learn how to read crypto charts or follow the latest news every day.
Related: How to invest in cryptocurrency
Copy trading is very straight forward and it’s just as it sounds. You copy other traders automatically and whenever they make a trade you make the same trade on your interface. Once the trade is closed out, your trade gets closed out as well.
Yes, it is 100% legal. As long as you choose a regulated platform like BitYard nothing can go wrong.
First, you need to sign up on a platform that offers this service. From here, enter the interface and click the button “become a copy trader”. Now, write down your credentials and your preferred strategies. Your profile will now show up in the marketplace of traders. As soon as you get a new follower, your trades will be mirrored in their accounts.
The process of setting up your copy account is the same thing as joining any cryptocurrency exchange. Sign up with your email, send in your KYC documents, and make your first deposit with either cryptocurrency or fiat currency.
You only have to pay the transaction fee that the exchange has and the percentage of capital that the trader you follow earns. Other than this there are no hidden fees or commissions.
This guide explains the ins and outs of cryptocurrency copy trading and after reading this article you will have a good understanding of the basics. The main takeaway for new investors is that this strategy can be very lucrative as long as you are willing to put in some work in the beginning to find the right platform and the right person to follow.
Both short-term and long-term investors can benefit from copying other profitable day traders that work hard to keep up the monthly return on investment.
This style of investing your money might not be for everyone but it can sure make you good money if you are comfortable putting your capital in the hands of others. To succeed you should first explore the different kinds of strategies used by the professionals and match them to your expectations. Good luck!