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21 November 2023,08:37


What Is The Difference Between Copy Trading And Manual Trading

21 November 2023, 08:37

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In this ever-changing landscape of financial markets, copy trading and manual trading are two distinct approaches that stand out. Both methods cater to a wide spectrum of traders with varied levels of experience and risk appetite, each offering unique benefits and challenges. In this blog article, we will delve into the intricacies of both methods, equipping you with the knowledge to make a more informed decision that aligns with your trading objectives.

Understanding What Is Copy Trading

Before embarking into the journey of copy trading, it is important to get a strong foundation of what is copy trading. Copy Trading is a revolutionary concept that empowers individuals to replicate the trading strategies adopted by more seasoned and successful traders so that they can capitalise on their expertise. These experienced traders are known as signal providers, who have their trades replicated automatically and in real-time, with the help of technology on their selected copy trading platform.

The other main party in copy trading are the copiers. Copiers mimic the trades of signal providers, and when they make a profit from doing so, pay a predetermined share of the profits to their signal providers. Understanding about how copy trading works and what benefits it entails are crucial for anyone looking to enter copy trading. 

Read More About What Is Copy Trading And Its Advantages

Understanding What Is Manual Trading

On the other hand, manual trading involves making independent trading judgments by personal analysis, research and market insights. Traders who are looking for more control and involvement might find this hands-on approach appealing for its own set of advantages:

Manual Trading Gives Full Control Of Your Capital

In manual trading, you have the power to make decisions in real time by using your analysis, risk tolerance, and market forecast as guides. You can have full control over every aspect of your trades, and that allows you to implement risk management strategies more effectively as you will be able to see clearly when you need them. 

Customisation Of Trading Strategies

Another benefit of manual trading is that it could also allow you to customise your trading strategies, risk management methods and trading style according to your trading objectives and risk tolerance level. Whether you are aiming for long-term growth, short-term gains, or capital preservation, you could always customise your trading strategy to meet your needs. Customisation could also allow you to tailor your trading strategies according to a specific financial asset you are interested in, and take advantage of your knowledge in that area. 

Deeper Understanding Of Factors That Drive Asset Prices

As you would need to decide on the next moves in trading by yourself, it means that you might spend more time doing research on the latest market events and trends that could potentially impact your trades’ performance. As a result, you might end up with a deeper understanding of market trends and fundamental factors that could drive the prices of the various financial assets

Adaptability Through Manual Trading

Last but not least, the financial markets are dynamic and things can shift rapidly. Prices, volatility, and trends can alter according to multiple factors and adaptability means that traders are able to respond effectively then. In manual trading, one would be able to take advantage of profitable trading opportunities as it enables traders to adapt quickly to shifting market conditions, and unexpected news events. 

copy trader looking at trading chart on mobile copy trading app

Strategic Considerations: Copy Trading Vs. Manual Trading

Copy trading and manual trading are two distinct approaches to the financial markets, each with its strategic considerations. Here are some ways you can compare between the two trading methods, to find one that truly meets your needs and trading objectives. 

Risk Management

To safeguard your investments, copy trading and manual trading both require strong risk management strategies. However, on a copy trading platform, you could seek diversification as a way for one to manage trading risks whereas manual trading allows for immediate adjustments based on market changes.

Learning Curve

While manual trading necessitates a more thorough comprehension of trading strategies and principles, beginner traders could seek a gentler learning curve on a copy trading platform. If you are a beginner looking to embark into the world of trading, consider going for copy trading as you could gain some exposure and learn a thing or two from seasoned traders before starting your trades. Check out some beginner copy trading tips that you might find useful below. 

Some Copy Trading Tips For Beginners You Can Follow

Time Commitment

Because copy trading requires less time to analyse the market, it is a good option for people with hectic schedules. Research and implementation take longer when trading manually.

Final Thoughts

Which option to choose — Manual trading or copy trading—depends on your level of commitment, goals, and personal preferences. Each method has advantages and can be used into a comprehensive trading plan. Whether you choose the practicality of Copy Trading or the active involvement of Manual Trading, the secret to reaching your financial goals is to follow a methodical process. 

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