The derivatives market of the crypto industry is close to $100 billion in average daily trading volume. It is a massive domain with millions of participating retail traders and institutional investors. Users of Binance copy trade futures and other derivatives with the help of automation service providers.
How can you start working in this incredibly large market? First and foremost, you need accounts on Binance and an automation platform like WunderTrading. Then, the magic begins.
How to copy trade on Binance
This crypto exchange is one of the biggest in the industry with a sizeable market share reaching up to 17%. With millions of retail traders visiting this CEX platform daily, it has been expanding the catalog of financial products to cater to a diverse audience of investors. Futures have been a staple of this exchange since its conception in 2018.
Many people believe that trading derivatives are a risky endeavor since many people use leverage and expose themselves to much higher risk than necessary. However web3 jobs related to decentralized finance (DeFi) and blockchain technologies are enabling new methods, such as spread trading and social trading, which can help reduce risk and generate reasonable profits.
To copy trade Binance futures using an automation service, you will need to do the following:
- Create a margin account on Binance if you don’t have one.
- Go to WunderTrading and create a new account if you don’t have one.
- Connect your Binance margin account to the WunderTrading platform.
- Go to the marketplace and search for traders who work with the same account as you.
- Select the managers that you want to follow and click the corresponding button.
- You will start copying their market activities shortly after.
What is copy trade?
The idea of social trading started appearing only in the 2000s. The internet was rapidly embracing the web 2.0 concept and many websites decided to integrate social elements. Brokerage service providers were quick to realize that it can be a great way to significantly increase their revenue while giving their clients a new exciting opportunity to make money passively.
Two forms of web 2.0-inspired approaches were dominating the market:
- Trust management with special accounts that took custody of clients’ money and allowed a trusted manager to make investment decisions for them.
- Copy trading where clients of brokers could follow retail traders with experience and successful track records to copy their actions automatically.
The second concept took off much better. Today, the vast majority of people trading in the crypto market prefer using at least some form of automation. Copy trading became a staple enjoyed by millions of newcomers who could start investing without any prior knowledge of assets.
Cloud-based copy trading software is offered by a myriad of vendors including CryptoHopper, 3Commas, AvaTrade, and WunderTrading. The latter even has a specialized marketplace where you can choose from hundreds of selected traders who show exceptional profitability. They are organized in a curated list and can be followed for free or for a relatively small fee.
WunderTrading is a great example of an automation platform that offers its clients a very focused product. You can choose from traders who work on very specific CEX websites and have good performances across long periods. Since you may narrow down the search for a reliable investor to follow, finding someone making money on futures is quite easy.
Binance also has one of the biggest audiences of institutionalized and individual expert traders thanks to its massive number of users. WunderTrading alone has several hundred featured traders with outstanding track records and impressive profitability working exclusively on Binance.
The daily average trading volume for derivatives on this CEX platform is close to $80 billion meaning that there is always a nice, meaty piece of the pie up for grabs. The only thing you need to do is find a fantastic trader whose actions will bring you returns consistently.
Is Binance copy trading for everyone?
People who need more confidence in their ability to make correct guesses about the market should follow successful traders and learn from them. You will have the same portfolio as they do and enter the same market positions. By trying to understand why and when these traders place orders, you will be able to elevate your knowledge about the crypto industry to the next level.
However, copying someone’s actions is still a risky strategy because the quality of risk management is something outside your control. In many ways, using spread trading techniques or employing automation solutions like GRID or DCA is a much better choice even for newcomers. Copy trading is for people who want to make money together with those promising good results. It does not work out 100% of the time!
