Is copy trading an easy shortcut for everyone?

So, we all know what copy trading is all about, right? Find an expert, follow his signals, and be ready to reap some awesome profits. The end. Sounds like a fantastic idea, right? Absolutely flawless. But is copy trading really the one-stop solution for everyone? With copy trading, does it mean that we no longer need to put in any effort to do anything, since we have found the ultimate shortcut to reaping profits easily? Well, here’s my take. There is no shortcut for trading and investments! There are still a bunch of factors you need to consider before and while you are copy trading.

Finding the right signal provider

When you were younger, did you ever copy someone else’s homework because you didn’t have the time or the knowledge to do it yourself? Well, copy trading is similar, but you won’t be able to easily spot the best trader, unlike how the smartest kid in class stands out. While the whole aim of copy trading is to profit from other people’s good decisions, the fundamental difficulty often resides in finding the right signal provider. And copying the wrong signal provider could lead to losses you can hardly imagine. So, your first task is to find the right signal provider! Omada offers a slew of professional signal providers showcasing their trading statistics for you to consider, and that could be helpful in your decision-making process.

Risk Settings

What if the signal provider you are following is willing to take far greater risks than you’d ever dream of? You may end up losing far more money than you can afford! Omada allows for followers to customise their own risk settings. So, the next task you need to manage is to really understand your risk appetite and accurately allocate the right amount of money reserved for copy trading. You also need to know the risk settings available on the platform you are using. One basic risk setting that Omada offers is fixed lot copying. Once you have allocated a certain amount of funds for copy trading, that will be your equity. Based on your own equity, you can choose a suitable lot size for all the trades that a particular signal provider executes. This is important because it tells you how much risk you are taking per trade. As such, you certainly shouldn’t blindly copy a signal provider without at least being aware of risk settings!

The Learning Process

Copy trading isn’t the shortcut for traders out there looking to gain a fruitful learning experience from their trading journeys. In order to progress as a trader, you need to understand the things that went wrong, be it your own mistakes or even that of the signal provider’s. Following any trader blindly will only lead to a massive waste of time as you would have achieved nothing meaningful for yourself! Self-learning, even from a master trader, is an effortful process. In a nutshell, copy trading can be a very ideal solution for traders out there looking to gain more experience with the help of professionals, but it is definitely not a shortcut for you to piggyback off someone else’s success. Effort and tenacity are required even in copy trading if you want to gain something valuable from the process.