Top 5 Crypto Copy Trading Strategies 2022
What is copy trading?
Copy trading is a way to copy the trades of other traders. It allows you to eliminate the stress and put your faith in someone who has a proven track record. This is an excellent strategy for beginners because it allows them to make trades without having to worry about determining which strategies work best for them and their intended risk tolerance. It’s also useful for experienced traders who want to try out new strategies without risking too much money on their own accounts. Bybit’s copy trading platform is now live, so here’s a few tips to get you started.
One of the most important things to consider when choosing a trader is their risk-to-reward ratio. This is usually measured in percentage terms, and it tells you how much risk a trader is willing to take on for every dollar they expect in profit. For example, a trader with a 50/50 ratio will be willing to lose half their investment in order to make one dollar.
A high risk-to-reward ratio means that you should only copy this particular trader if you’re confident that the market will move in your favor. If there’s any doubt about whether or not it will go up or down, then this isn’t the right strategy for you. The same goes if someone has an extremely low amount of risk compared to what they might earn—if they’re making more than $5 per trade with only $1 invested then maybe don’t bother copying them just yet.
Diversifying your portfolio essentially means that you should be copying more than one trader at any one time. This way, if one of them has a bad day and loses money on their trades, the other traders will make up for it. This is also important because if you are making different kinds of trades from each trader (e.g., short-term vs long-term), then the risk of losing money over time will be lower because you have more people doing different things with your account.
Diversification isn’t a guarantee against loss, but it does reduce risk by spreading your investments across multiple traders.
3. Look out for trading fees
It’s important to keep in mind that trading fees are always paid by one of two parties: either the trader who makes a copy trade or their copied counterpart. Trading fees can be as low as 0.2% and as high as 1%.
When you make an original (non-copy) market order on Bybit, you pay 0.02% in trading fees per trade. If someone copies your order with their own original market order, they will pay 0.02% in trading fees per trade themselves.
4. Set up stop loss and take profit
Once you have mastered the art of choosing a strategy to copy, it’s time to learn how to manage your investment…
Firstly, stop loss and take profit are important for protecting your investment. Stop loss is a price at which you sell your crypto if the market moves against you. Take profit is the price at which you sell your crypto if it goes up as expected. Both of these should be a percentage of your investment so that they don’t affect everything else that happens in between them (i.e., they will only trigger once). The most common way people calculate their stop loss and take profit percentages is by using 1% or 2% as an approximation based on their current holdings size and then adjusting accordingly when things get closer to being implemented (i.e., after making more trades).
5. Sign up to Copy Trade with MDX Algo on Bybit
Put simply, MDX Algo is the best copy trading option on Bybit. It is fully backtested and uses an automation system that’s designed to beat the BTC/USDT trading pair over medium to long-term timeframes.
Bybit that powers the automated trades combines the best features of trusted market tools to create one easy-to-use super powerful indicator. It gives a long and short call in any market and on any timeframe.
Copy trading cryptocurrency is a great way for beginners to get started in the market, but there are still some things you should keep in mind. Diversify your portfolio with crypto copy trading options by looking for multiple traders who have different strategies and goals. Look out for fees that could eat into your profits and take advantage of opportunities like MDX ALGO which will automate trades based on real-time data analysis without any input from a human being required!