As the world of cryptocurrencies continues to grow and evolve, so does the concept of social trading. This is a process that allows experienced users to invest in others. It’s like investing in mutual funds or other derivatives through a stockbroker. It’s not just for regular stocks, though. People can also use it for crypto assets like Bitcoin and Ethereum.
Cryptocurrency social trading platforms make it easy to learn how to trade by seeing a ‘master’. This platform allows you to copy other cryptocurrency traders who are more knowledgeable than you and gain profits from their experience.
In this post, you’ll learn more about social trading and how it works.
What Is Social Trading?
Social trading is a way to copy the trades of others. The idea is that you can learn from the experience of other traders and copy their trading strategies and techniques to make money. Somehow, you get to access the thoughts that go into each trade they place, and you can key into this too.
Meanwhile, trading can be challenging, even for people who have a good understanding of how markets work. That’s why it’s often beneficial to follow experienced traders who are more knowledgeable than you. You can do this through legitimate bots like Shrimpy or trusted social trading platforms.
How Does Crypto Social Trading Work?
Crypto social trading differs from regular cryptocurrency trading because it involves copying other people’s trades. It doesn’t necessarily involve buying or selling cryptocurrencies on your own. Instead, it works by using the knowledge you gain from social networks to make your own decisions.
There are many benefits to crypto social trading. This includes learning how to trade in general and getting exposure to various currencies. These are currencies you may not have access to without a strategy like this.
However, one of the main advantages of the trading scheme is that it educates investors who are unfamiliar with cryptocurrencies on what they need to know.
To get started, here are the steps:
- You’ll need to sign up for a social trading platform of your choice.
- Once you’ve signed up and verified your account, you can search for other traders with similar interests. When you do this, you need to follow their trades in real-time and copy them by clicking the ‘Follow’ button on their profile page.
- You’ll then see their current portfolio values and a map of their history. In addition, you’ll also see how much money they’re making or losing with each trade.
- If you decide someone is worth copying, click ‘Copy’. This will create a replica of their portfolio in your account.
Now, if they make money from their trades, then so do you. If they sell some coins at a profit but buy others at a loss, that’s what happens to you. It’s like trading face-to-face without having to take care of all the technical stuff yourself.
In other words, a replica of the trades of an expert you follow has been created in your portfolio. Hence, your trading accounts are interconnected. As a result, their loss is your loss, and their win is your win.
A New Marketplace
Crypto social trading is a new marketplace. It’s different from stock trading because it’s a new platform allowing you to copy other traders. Since cryptocurrencies are still relatively new, the crypto market has less regulation than the stock market. This makes it more difficult for beginner investors to make money and protect themselves from fraudsters.
Meanwhile, these fraudsters will try to scam people into buying useless products or services with their valuable cryptocurrency funds. They don’t share information about their goods or services that are worth the investment.
On the other hand, did you know that even experienced investors struggle with investing in cryptocurrencies? Some of them have invested in multiple projects without receiving any profit, or worse, losing money on their investments.
This is where crypto social trading comes into play. It empowers beginners by giving them access to information about how other traders have been making millions through crypto-assets. It also protects them from scams by providing information on how an initial coin offering project works before investing.
Conclusion
If you’re just learning about trading in cryptocurrency, crypto social trading is a great way to grow. One of the best things about copying other people’s trades is that they’re already profitable.
You can copy someone who’s been successful and learn from their mistakes, most of whom should be experienced traders. With this unique approach to making money in the market, you’ll be able to grow your portfolio until you become an independent trader.
