Why Copy Trading Is Not a Long-Term Option
In the world of trading, many people prefer to be handed profits on a silver platter rather than putting in the effort to learn how the markets actually work. It’s much like wanting to be fed fish instead of learning how to catch them. This has led to a surge in popularity for copy trading and signal groups, where individuals blindly follow anonymous social accounts or supposed experts, hoping for quick gains. However, this approach is nothing more than, to be blunt, lazy man’s trading, and is not sustainable in the long run. The truth is, to truly succeed and thrive in the financial markets, you need to equip yourself with knowledge, skills, and data rather than relying on the uncertain strategies of others. So don’t be lazy and copy others, do it yourself!
The Illusion of Easy Success
Copy trading often appeals to those who want quick and easy profits without the effort of learning how the markets work. It’s marketed as a shortcut to success, but the reality is quite different. The traders you’re copying might have good runs, but their strategies are not foolproof. Market conditions change, and what works today might not work tomorrow. By relying solely on copy trading, you miss out on developing the skills needed to adapt and make informed decisions on the fly. As the old saying goes, if it’s too good to be true, it probably is.
The Downside of Signal Groups
Signal groups and trading alerts are another popular trend. These groups claim to provide valuable insights and profitable trade signals, usually for a subscription fee. However, many of these groups are run by individuals more interested in your subscription money than your trading success. Subscribers often lack basic trading knowledge, such as understanding candlestick charts or market indicators, making it difficult to evaluate the quality of the signals provided.
When I tried to run an alert group, it was based off of signals from chart data and an indicator that I created that people also had access to the code. But, not only did I provide the charts, I also tried to explain what was happening and encouraged people to do their own research and analysis. But that wasn’t what people wanted, they wanted me to just tell them BUY or SELL and then wanted to blame me by whining and crying and wanting refunds when they lost money. Nothing is a guarantee in the markets, especially in crypto! So to make a long and painful story short, I no longer offer alerts.
The Importance of Education
To truly succeed in trading, you need to understand how the markets work. This means learning about technical analysis, market trends, risk management, and more. Education empowers you to make informed decisions based on your analysis rather than blindly following someone else’s trades. It also helps you develop a personal trading strategy that suits your goals and risk tolerance. So I hate to break it to you… If you really want to succeed in this world, you need to learn to do the work yourself. I know, it’s not a popular thing to say in today’s society, but people need to inherently stop being lazy and learn some new skills that who knows what can bring you in the future.
The Reality of Group Trading
Trading as part of a group to compete with larger funds may sound appealing, but it rarely works as intended. Large funds have resources and expertise far beyond what most individual traders can access. Trying to compete with them as a group often leads to disorganization and poor decision-making. Moreover, group dynamics can lead to herd behavior, where traders follow the majority without critical analysis, resulting in losses. Sure it worked in the case of Wall Street Bets with Gamestop and AMC, but that was a rare situation.
If you see people trying this with really low cap and risky stocks or cryptocurrencies, they are trying to start a pump and dump and you need to be careful. Many times what happens is that these traders are trying to cover for mistakes or just to pump their bags by having their groups pump a penny stock so they can then dump on their own community and make the profits. It happens all the time unfortunately, so don’t fall for it!
Who Really Profits?
In the world of copy trading and signal groups, the consistent winners are often the ones running the show. They make money from subscriptions and fees, regardless of whether their followers succeed or fail. This creates a conflict of interest, as their primary goal is to retain subscribers rather than ensure profitable trades. These are the people that don’t teach their subscribers or followers how to actually trade, they just say ‘do what we tell you and you will make a ton of money’ kind of BS.
If you join a group and they do not try to teach you about technical analysis and just tell you to follow them, run for the hills. Once you have gotten to the hills, then do yourself a favor and start learning technical analysis and setting up your own risk management strategy yourself.
Conclusion
While copy trading and signal groups might seem like convenient ways to enter the financial markets, they are not sustainable long-term strategies. To achieve lasting success in trading, you need to invest in your education and understand the markets. This knowledge will enable you to develop your trading strategies, adapt to changing market conditions, and make informed decisions that align with your financial goals.
If you find yourself down and out like I have, a few times, whether it’s just life throwing you curve balls, or you make some big mistakes in the markets, all you need is a little capital and the skills to make more out of it, and you will be okay in the long run. Don’t be swayed by the allure of easy profits; instead, focus on building a solid foundation that will serve you well in in the long term.
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Additional Blog Locations
Many of my cryptocurrency related articles as well as trading articles can also be found on my crypto research site, Coin Logic.
I also post trading chart ideas on my TradingView Profile.
Disclaimer:
The information in this trade journal is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.
