Mirror trading in crypto

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As you can judge by the name of this trading type, mirror trading is a strategy you borrow from another trader, thus, “mirror” them.

Just like other methods and strategies, the crypto niche has adopted mirror trading from the traditional markets. You should keep in mind, however, that some aspects make this strategy work somewhat differently in crypto than in the long-established equity markets.

Cons of mirror trading with crypto

Because the cryptocurrency market is very volatile, mirror trading strategies you follow might very often become outdated. Compared to crypto, in traditional trading, fluctuations are much less significant normally.

Also, they become ineffective as a large number of people start using them. This means that the strategy gets devalued, which leads to losses on your side. By contrast, modern equity markets are functioning on the premise that multiple algorithms compete with each other.

Basically, mirror trading is very often used by novice traders who are yet striving to develop their strategy. While assessing all the risks and benefits of the strategy suggested by the other person they have a chance to learn safely… and earn!

Pros of mirroring experienced crypto traders

After you have chosen the mirror trading strategy, you have to only monitor its effectiveness and decide if it’s profitable. That looks pretty similar to traditional markets.

Also, you don’t have to worry about emotions getting in the way of decision-making, which is also true for trading stocks and fiat currencies.

That being said, while copying other traders’ strategies, you only have to monitor your profits from time to time and stay calm. Except, sometimes swift changes in the market situation might require your undivided attention.

In this situation, a trader who mirrors other traders might want to choose a new strategy that fits into the new market conditions and that will bring them profit.

To conclude

Mirror trading came to the crypto markets from the traditional segment. Since crypto is a bit of a "different world”, it will work differently in the crypto niche rather than in well-established markets.

Cons of mirroring crypto traders include outdated strategies and crowds that can make them obsolete.

Pros cover trading devoid of emotion and a lot of spared time.

If you want to give mirror trading a try, it’s a great chance to learn safely… and earn! On the other hand, you should be always prepared to switch to a new strategy once the market situation changes.