Copy Trading: A Guide to Doing it Right

In recent years, copy trading has gained a lot of popularity, with many traders taking advantage of the ability to replicate the trades of more experienced traders. However, the practice has also received criticism, with some people believing that copy trading means you lack skills as a trader. In this article, we will explore copy trading and how to do it right.

Copy trading is not bad. It doesn't mean you don't have any skills. In fact, many professional traders use copy trading to augment their existing strategies. Copy trading can help you learn from the experience of others and potentially increase your profitability.

However, the key to successful copy trading is how you approach it. Here are some important things to keep in mind:

1. Have a Plan
When you copy a trade from someone, make sure you have a plan for it. Most people see a tweet or social media post and quickly jump into a trade without any real thought. They often don't even set up proper notification systems to know when to get out.

To avoid this, make a plan for the exit and stick to it. This means deciding on your profit targets and stop loss levels before entering a trade. It also means being disciplined enough to exit the trade when your plan tells you to, regardless of what others are doing.

2. It's Okay to Disagree
Just because someone has a high level of experience or has made successful trades in the past does not mean that all of their trades will work out. You should never blindly follow someone else's trades without first considering whether they align with your own trading strategy and thesis.

If you disagree with a trade, skip it. It's okay to fade giga brains. Only copy trades that you have conviction in and that align with your own trading thesis.

3. Have Conviction
If you copy a trade without having the same thesis, you will get shaken out too easily. You need to have conviction in the trade you are making, and this requires doing your own research and analysis.

Only when you are confident in the thesis will you be able to sail through the rough waters. This means being disciplined enough to stick to your plan and not get swayed by short-term market fluctuations.

4. Take Full Responsibility
One of the main reasons copy trading is so popular is that it shifts responsibility from your inability to others. If you lose, they were wrong. If you win, you were right. This is a bad mindset to have.

You need to take full responsibility for your trades, whether you are copying someone else's or making your own. This means owning up to your mistakes and learning from them, as well as giving credit when credits are due.

In conclusion, copy trading is a great skill to have when done right. It can help you learn from the experience of others and potentially increase your profitability. However, you need to approach it with discipline, conviction, and responsibility. Make sure you have a plan, only copy trades that you have conviction in, and take full responsibility for your trades. By following these guidelines, you can make copy trading work for you.