Copy trading has grown in popularity recently, especially among Gen-Z, as beginner traders can leverage the expertise of professional traders by copying their position.
Becoming a profitable trader requires years of experience and learning. A beginner trader is bound to make mistakes for various reasons, such as poor risk management, wrong trading setup, or other psychological factors.
Copy trading potentially helps beginners stay profitable, but it has its own risk factors.
Gen-Z Traders Make up Nearly Half of Users
According to a Bitget report, 44% of its copy trading platform’s users are Gen-Z, meaning they were born between the years 1997 and 2012.
The younger age group may not necessarily have the expertise to study the market and place the trades. Hence, they have to rely on methods such as copy trading, where they can copy the trades of experts.
Click here to read more about the six best copy trading platforms for 2023.
32% of Bitget copy trading users are people born between 1981 and 1996, classified as millennials. The screenshot below further shows that 17% of the users are aged 35-55, and 7% of users are over 55 years old.
Furthermore, the report revealed other insights, such as copy traders prefer trading futures rather than spot trading. The exchange said that futures trading accounted for 91% of all the copy trading transactions, whereas spot was only 9%.
However, traders need to keep in mind some factors, such as the past performance of an expert trader, may not necessarily indicate future performance. Generally renowned traders have a higher risk appetite. Hence, copying their trade may also expose a beginner to higher risk.
Ideally, traders could better plan for themselves if they learn the basics of technical analysis, position sizing, and risk management.
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