SpotCopyTrading

Hey! There as you may have heard Binance has recently started Spot Copy trading. This new feature offers an exciting possibility where you make money by doing virtually nothing. How this works is very simple. There are a large number of Spot trading experts listed on the Binance platform. All you need to do is invest your money with the expert of your choice. The expert will take trades and when they make a profit you will get your share without having to trade yourself. This is ideal for someone who does not know how to trade or does not have the time to do the same.
The expert you chose will get a 10% cut of the profit they generate for you for the hard work they put in. But it is not just sunshine and roses. If the trade goes wrong you will lose money as well
Selecting the right Copy trader is critical. So here are 5 key steps  take before you Copy an expert for Spot Copy Trading
Step 1: Check the Joining Days & ROI
Before you decide to invest your amount with an expert for spot copy trading the most important thing to consider is the joining days. When you click on the spot trading option you see a screen that looks like under

 

As you can see that there are a large number of people offering spot trading services however you must make sure that you trust your money to an experienced trader so that chance of incurring a lose is minimal.

When you click on the name of an expert you will see a screen that looks like this
Make sure that the expert has been trading for more that 200 days. This means that they have a clear idea of how to navigate the market.
Another key thing to consider is the Return on Investment that the expert has generated for his copiers in the past 30 to 90 days.
You can scroll down a little and you will the ROI and Copier PNL. Switch the time line to 30 or 90 days. If the copier PNL is positive this means that this expert can generate you a profit. Make sure that the ROI is around 8 to 10%.
You will also see a graph of ROi which will show you how profitable copying this expert had been.
Step 2:Win Days
The second key factor to determine if the expert you wish to copy will work out for you is to look at the number of successful trades the expert has made. Am expert with a win rate of 95% or above is a safe bet for spot copy trading

Step 3: Number of Copiers
The third key parameter to asses how profitable a copy trader is the number of copiers. On the top of the screen you will see how many slots the expert has available and how many people are currently copy trading with them.
If for example the trader has 300 slots and only 100 or 200 are copying them this means that either this trader does not take trades regularly or does not generate profit. Oh… and make sure to look at the number of total copiers as well. This number shows how many people copied this expert and then left. If this number is higher than the available slot or is double of the current number of people copying, it is a clear indication that this expert will generate loses for you. So, stay away

Step 4:Max Draw Down (MDD)
One of  the biggest benefits of binance is that they keep things transparent. The MDD is a value of the maximum lose the expert had generated for their copier. A high MDD means that the expert will probably generate a  lose for you. Now if you are someone who can stay patient the lose may recovered in subsequent trades however for most people a high MDD means a red flag. It means that out of total trades the expert makes a significant percentage lead to a lose.

Step 5:Sharp Ratio
Look closely at the sharp ratio which show how many trades have gone right and made a profit for the expert. A sharp ratio lower than the MDD is an immediate red flag. However if you see a high Sharp ratio and a low MDD that means you can copy the expert without stress.
Bottom Line
Copy trading is a good tool if you do not have trading skill or do not have the time to trade. However never select a copy trader on the basis of a positive ROI. Make sure to check all the key things I have summarized in this article and make sure to start a mock trade before investing your money.
Bonus Tip
Check the AUN value (Assets under management) this the total amount the trader has invested himself. The AUM is the traders own skin in the game so make sure to select a trader that a Significant amount of his own in the game

So, there you go an in depth analysis of how to select the right copy trader for you. Have fun and I will see you in the next article.
#SpotCopyTrading #BinanceSquareTalks