Key points

  • Binance Copy Trading allows users to automatically copy trades of experienced traders and helps newbies participate in trading in the cryptocurrency market.

  • In copy trading, you can change the settings for copying transactions and manage risks using maximum loss limits.

  • Binance copy trading is available for the spot and futures markets. It can be useful for beginner traders who want to learn from experienced ones, and for those who do not want to constantly monitor trading operations.

Introduction

Trading cryptocurrencies can be quite complex: it requires a lot of time, knowledge and constant monitoring of the market. If you don't have the time or experience to actively trade, but want to participate in the market, copy trading may be right for you. In this article, we will explain what Binance copy trading is and how it works, as well as provide a step-by-step guide.

What is copy trading on Binance?

Binance offers a copy trading feature that allows users to automatically copy trades of more experienced traders. This approach makes it easier for beginners to enter the market. With this feature, users can automatically execute the same trades as their chosen lead trader, without constantly monitoring the market. 

As of May 2024, Binance copy trading is available for spot and futures markets in select regions. These products can be especially useful for new traders who want to learn from experienced ones, and those who do not want to constantly monitor trading operations.

How does Binance copy trading work?

1. Traders' choice

First, you need to select a lead trader whose trades you want to repeat. Binance provides a list of lead traders with trading performance, strategies, risk levels, and historical data. This information helps you make informed decisions when choosing a trader.

2. Automatic execution

After subscribing to a lead trader, all of his future trades will be automatically repeated in the user's account. This means that the subscriber will copy the opening and closing of positions, as well as adjustments to stop loss and take profit levels. Thanks to automation, you can rely on the experience of the lead trader and not make a trade manually.

3. Control and flexibility

Although copy trading on Binance automates the trading process, users still retain control over their accounts. They can adjust copy trading parameters such as capital amount, or stop copy trading at any time. This flexibility allows you to manage your risks and investments according to your personal preferences.

Management of risks

Binance has risk management tools in place to help protect your investments. Users can set maximum loss limits and allocate only a portion of their total capital to copy trading. Using such settings, you can reduce risks and protect assets from serious losses.

However, it is important to remember that all types of trading involve risks. If your strategy fails, you may suffer losses. Do thorough research and only invest money you are willing to lose.

Benefits of Copy Trading on Binance

1. Access to the knowledge of experienced traders

By copying experienced traders, users gain access to their knowledge and strategies. This way you can learn other people’s methods of trading and market analysis, and over time even improve your own skills.

2. Time saving

Copy trading eliminates the need to constantly monitor the market and execute trades manually. This can be especially useful for those who cannot devote a lot of time to trading.

3. Diversification

Users can diversify their investments by copying multiple traders with different strategies and risk profiles. This approach can spread risks and increase the chances of stable returns over the long term.

How to Start Using Copy Trading on Binance

Step 1: Create a Binance Account

If you don't already have a Binance account, you'll need to create one. Go to the Binance website and click the “Sign Up” button. Follow the instructions to complete the registration and verification process, including confirming your email address and identity.

Step 2: Deposit funds

After setting up your account, you need to deposit funds into your Binance account. Go to the "Wallet" section and press "Enter". Select the cryptocurrency you want to deposit and follow the instructions to transfer funds from your external wallet to your Binance account.

Step 3: Open the Copy Trading Platform on Binance

After depositing funds, click "Trading" in the top menu and select "Copy Trading" to open the platform.

Step 4: Find and Select a Lead Trader

The copy trading platform contains a list of traders who can be copied. View a trader's profile to read important information about their trading performance, strategies, risk levels and historical data. Check this out and choose a lead trader that suits your investment goals and risk tolerance.

Step 5. Allocate funds for copy trading

After choosing a trader, you need to allocate funds that will be used to copy trades. Please note that the copy trading account balance operates separately from the regular Binance account.

Click “Copy” to select a copy method and specify the amount you want to allocate.

Copy Trading Binance offers two copy methods: Fixed Amount and Fixed Ratio. 

Fixed Amount will open orders at a fixed cost per order until the total copy amount runs out. This option allows you to control the amount of investment. You can also define an overall stop loss to protect a percentage of your funds in the event of a loss.

The fixed ratio will open orders in proportion to the lead trader's position size and available balance. 

For example, if the lead trader's portfolio is $10,000 and he places an order for $1,000 (10%), your order will be opened at the same ratio of 10%. If you invested $1000 dollars, then the order will cost $100 (10%).

In the "Advanced Settings" section, you can set additional parameters such as margin mode, leverage and position risk.

Step 6: Monitor and Tune

Copy trading automates the trading process, but the account must be reviewed regularly. Monitor the performance of copied trades and overall market conditions. If necessary, adjust the copy settings or stop copying the trader if his results do not meet expectations.

Finally

Copy trading on Binance is a valuable tool for those who want to participate in the cryptocurrency market without extensive knowledge or constant monitoring. It allows you to copy the trades of experienced traders in order to rely on their knowledge and save time and effort.

To get the most out of copy trading on Binance, do thorough research, use risk management tools, and stay updated on market conditions.

Disclaimer: The following materials are provided “as is” without warranty of any kind for general reference and educational purposes only. This information should not be considered financial advice, legal advice, or a recommendation to purchase any specific product or service. You should seek your own advice from appropriate professional advisers. Since this article was written by a third party author, please note that the opinions expressed are those of the third party author and do not necessarily reflect the views of Binance Academy. For more information, please visit link. The value of digital assets can be volatile. The value of the funds invested may go up and down. You may not get your invested funds back. You are solely responsible for your investment decisions. Binance Academy is not responsible for your possible losses. This information does not constitute financial, legal or professional advice. To learn more, please review our Terms of Use and Risk Disclosure.