Back in 2016/2017, when crypto prices first started reaching astronomical prices, there was a massive amount of new traders and investors who started entering the industry. With the prices skyrocketing once more in 2020/2021, the same happened again. Bitcoin recently surpassed $ 64k, and that alone attracted the attention of people around the world.
Not to mention countless other coins and tokens that also hit new all-time highs, all of which contributed to the growth of the industry. Ethereum-based decentralized finance (DeFi) sector offered users to invest into coins and earn simply by keeping them locked up, so even more people came because of that. After all, who would want to miss a chance to earn money by having money?
Of course, trading is still the fastest way to earn the fastest amount, and so a lot of new arrivals turned to it. However, there is one problem — they don’t know a thing about cryptocurrencies or crypto trading. This is not something that you can learn over a weekend and hope for the best. You are risking your hard earned money, and that is especially risky when it comes to cryptos, which are more volatile than any other asset.
The Problem of Copy Trading
So, what did these new traders do? They turned to copy trading, where they basically find successful traders who are earning a lot of money, and they started copying them.
Of course, copy trading itself is not perfect. In fact, it has quite a few serious problems. For example, you can never know which traders are truly capable and know what they are doing, and which only got lucky a few times, and it is only a matter of time before they make the wrong call and lose all of their own money, as well as all of the money of those following them.
Most platforms don’t have any kind of checks that would confirm that a trader has a history of success which would make them a good person to copy. Even those that do have such mechanisms usually don’t offer nearly enough for the trader to be certain of who they should or shouldn’t follow.
How to Solve the Problem?
However, there are projects that recognized this issue and are working towards solving it by offering a more detailed and in-depth way of checking top traders.
One example is Decoin, which aims to solve the issue through a number of ways. The website lists the top traders’ latest profits, so users get to see the recordings of trader sessions, and decide whether or not to follow and copy the trader based on that. There is also an auto-trade feature, which allows for easy copying of other traders. It is all automatic. If users opt to use Decoin’s DTrade Pro, there will be no time limit during which they can automatically copy others. Instead, if they truly trust the trader they follow, they can copy them indefinitely.
Copy trading is very popular today, simply because there are so many newcomers who have yet to intimately learn the ways of crypto. Fortunately for them, they don’t have to miss the opportunities that will emerge while they are educating themselves, as features like copy trading can be extremely useful if done right, and provided that you can find the right person to follow.
It all needs to be as transparent as possible, with the system based on reputation and association, which makes it easy to separate good traders from the bad ones who got lucky.
Copy trading is a good way for new and inexperienced crypto users to start earning the profits from crypto trade as soon as they join the industry, even though they don’t yet understand it. It is a method of giving them the ability to earn as they learn, with minimum risk, or at least, reducing the risk as much as possible under the circumstances, by copying the actions of someone who has reduced the risk through learning and experience. It has its problems, but there are projects that work on resolving them. Some have had more success than others, but overall, with each new breakthrough, the entire crypto industry gets to benefit.