What is Copy Trading? How to Get Started as a Beginner

Copy trading lets you automatically follow the trades of another (usually more experienced) trader, with those trades showing up in your own account.

It’s a simple way to access the markets as a beginner, while still staying in control of your money and choices.

You’ll find copy trading across all kinds of markets: forex, stocks, crypto, and CFDs.

Platforms like PU Prime make the process easy to use, whether you’re just getting started or already know your way around. 

How does copy trading work?

At its core, copy trading works by linking your trading account to that of a chosen trader, called the signal provider. Once connected, your account will copy the positions opened and closed by the chosen trader. This happens in real time and is mostly automatic. Here’s a step-by-step breakdown:

• Account setup: You open a trading account on a platform like PU Prime that has a copy trading feature.
• Select a trader: You browse available signal providers who might have public records of their trading performance, trading decisions and risk management approach.
• Allocate funds: Determine the portion of your capital to allocate for copying. This can be a small amount or a larger investment, depending on your financial situation and risk appetite.
• Automatic execution: Whenever the copied trader makes a trade, your account will automatically execute the same trade, whole or in proportion to your allocated funds.
• Monitor and adjust: You can monitor in real time, and if you want, you can pause or stop copying that trader or adjust your settings at any time.

One of the best parts of copy trading is that you still own and control your trading account throughout the process.

What are some benefits of copy trading?

Learn from experienced traders

Copy trading lets you watch and learn from experienced or successful traders.

By seeing how these traders react to market conditions and risk management, less experienced traders can expand their own knowledge.

Save time and effort.

Not everyone has the time to analyse charts and research trading strategies for hours a week.

Copy trading condenses this process so you can potentially benefit from market expertise without the steep learning curve.

Diversify your portfolio 

Most social trading platforms allow you to copy multiple traders at once.

Diversification spreads your risk across various traders, so if one trader underperforms, the impact is minimised.

Easy to use

Well-designed copy trading platforms make it easy for newbies to participate. Tools, dashboards and educational resources guide you through every step.

Experience real-time execution 

Trades are executed in your account in real time, mirroring the actions of your chosen signal providers.

This instant replication is crucial in fast-moving markets.

But remember, while these benefits are great, you must be aware of the risks.

What are some risks and challenges with copy trading?

Market volatility 

CFDs and other derivatives are highly volatile, and price swings can result in large losses as well as gains.

“Copying” does not protect you from the risks of trading volatile markets.

Potentially losing money quickly 

You can lose money quickly, especially if the trader being copied is using high-risk strategies or market conditions change unexpectedly.

Your risk tolerance should always be considered when choosing both traders and settings.

Over-reliance on one trader

Copy trading often involves choosing one or more signal providers, but relying on just one trader exposes your account to their trading risks.

If that trader loses, so will your portfolio.

Changes in market conditions

A trader may have a good track record, but past performance is no guarantee of future success.

Market conditions can change, and strategies that worked before may not work anymore.

Platform and execution risks

Technical issues on trading platforms can sometimes result in missed trades or slippage.

Make sure your chosen platform has automated execution.

How to choose the right trader to copy

Choosing the right trader to copy can make or break your copy trading experience.

Here’s how to size them up so you’re not just following someone popular, but someone who actually aligns with your goals.

Look at their performance 

Check their win/loss record, returns over time, and how much they’ve lost during dips (called drawdowns).

Strong numbers can be appealing, but remember, they show what’s happened in the past, not what’s guaranteed in the future.

See how long they’ve been trading

Someone with a longer track record gives you more to go on.

Look for consistency, not just lucky streaks.

Have they handled tough markets well? That’s a good sign they know what they’re doing.

Understand the risks they take

Most platforms assign traders a risk score.

High returns often come with high risk, so check if they’re achieving results in a steady way or through big swings.

Choose traders whose risk profile suits your comfort level.

Know their trading style

Some traders are in and out of trades quickly (scalping), others hold positions for days or weeks (swing or long-term).

Pick a style that matches your own pace and financial situation.

If you’re after slower, steadier gains, don’t copy someone who trades aggressively all day.

Don’t just follow the crowd

A trader with lots of followers might seem trustworthy, but that doesn’t always mean they’re the best fit for you. Dig into the data – popularity isn’t a substitute for performance or reliability.

Look for transparency

The best traders are open about their strategies. They explain their moves, share updates, and don’t hide their losses.

If someone is vague or only shows their wins, that’s a red flag.

Using Copy trading platforms

Copy trading platforms are designed to simplify following and replicating the moves of other traders.

If you’re new to the space, they take out a lot of the technical complexity. PU Prime, for example, is one of several platforms offering a simple way to browse traders, track performance, and copy trades in real time.

Here’s what you’ll usually get with a good copy trading platform: 

• Easy-to-use dashboard. Most platforms, including PU Prime, make it simple to find traders, compare stats, and start copying, even if you’re starting out.
  
• Detailed performance stats. You can see a trader’s real-time results and past performance to get a clearer picture of how they trade.
  
• Automatic trade mirroring. Once you’ve chosen someone to follow, your account will copy their trades as they happen. No need to do it manually.
  
• Diversification options. You’re not limited to just one trader. Most platforms let you spread your investments across a few different strategies.
  
• Built-in risk controls. Set things like stop-loss levels, profit targets, or how much you’re comfortable investing with each trader.

Before committing to any platform, check for things like security, regulation, support, and learning tools.

PU Prime includes these features and gives you a clean, intuitive experience whether you’re just testing the waters or already trading regularly.

How does copy trading work in crypto markets? 

Copy trading in crypto works the same way, but the market behaves a little differently. Crypto is open 24/7 and often moves fast, which means the stakes can be higher (and the opportunities, too). Here’s how it plays out:

1. Different market drivers. Crypto reacts to things like global sentiment, regulatory changes, and tech upgrades. These factors can cause sharp moves, so timing and strategy matter even more.
   
2. Crypto-focused traders. Many experienced traders focus only on crypto. Copying them gives you access to their strategies without needing to master the space yourself.
   
3. More room to diversify. The crypto market isn’t just Bitcoin or Ethereum. You can follow different traders who specialise in altcoins or specific strategies to spread your risk.
   
4. Risk still comes first.  With bigger price swings, managing risk is critical. Most platforms let you set boundaries on how much you’re willing to lose or gain on any trade.

If you’re curious about crypto but not ready to trade it on your own, copy trading can offer a good starting point. Just remember: the volatility and risk are real, and it’s important to stay informed.

How to build your copy trading strategy 

Even though you’re copying other traders, you still need a plan.

Your goals, risk comfort, and how you want to balance your portfolio all come into play.

Here’s how to think about your strategy.

Know what you’re aiming for 

Want to explore new markets? Grow your capital? Learn by watching? Being clear on your goal helps you pick the right traders and track progress.

Keep your risk in check

• Don’t put all your money with one trader.
• Rebalance your allocations if one trader’s results change.
• Things like stop-loss orders and risk scores help you stay protected.

Stay active, not passive

Copy trading is easier than going solo, but it still needs attention. Watch how your portfolio is performing and keep an eye on the broader market.

Stay informed

Take full advantage of platform features, including trader profiles, data, and alerts. The more informed you are, the better your decisions.

Just remember: there are no guaranteed profits.

Markets change, traders hit rough patches, and even smart strategies can face losses.

Be mindful, stay flexible, and always know how much risk you’re taking on.

Explore copy trading with PU Prime today 

Copy trading can be a smart way to dip into the markets, especially if you’re still learning or don’t have time to trade full-time.

It provides access to expert strategies, helps you diversify, and alleviates the pressure of making every decision on your own.

But it’s not set-and-forget. The risk is real, especially with leveraged products like CFDs or fast-moving markets like crypto.

Choosing traders carefully, utilising platform tools effectively, and staying involved in your portfolio are key to making it work.

If you’re ready to explore, platforms like PU Prime offer transparent profiles, risk controls, and educational content to help you get started confidently.

FAQs

Will I definitely make money copy trading?

Results depend on the market, the traders you follow, and how you manage your account. Past results don’t guarantee future performance.

Do I own the assets I’m trading?

With CFDs and similar instruments, you’re speculating on price changes; you don’t own the actual shares or crypto.

Do I need to monitor my copy trades?

Yes, it’s more hands-off than trading solo, but it’s still important to review performance and stay up to date on what your traders are doing.

Do platforms give financial advice?

Generally, no. They provide tools and data, not personal advice. It’s up to you to make informed choices based on your situation.