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1. Copy trading

What Is Crypto Copy Trading?
Crypto copy trading is a trading strategy that uses automation to buy and sell crypto. It lets you copy another trader's methods, so you don't need a lot of time or experience yourself.

The whole concept of crypto copy trading revolves around the idea of identifying successful traders and mimicking their actions. Unlike regular trading, copy trading doesn't focus on identifying market trends or attempting complex trading strategies. Instead, the automated software simply looks at what another trader is doing and does the same thing. For example, if one trader spends 5% of their money on a certain coin, the copy trader's software would spend 5% of their money on the same coin.

Copy trading is great for beginners because they don't have to fully understand the market themselves. Instead, they can use the expertise of other traders to make smart decisions. Even if you already understand the market yourself, copy trading can be a helpful tool. It's less hands-on, so using copy trading can free up some of your time. Being able to see how other traders make decisions can also help you learn about the market and create strategies that work for your needs.

How Does Crypto Copy Trading Work?
Crypto copy trading only works with the right software. It takes a little time to set up, but once you do, it runs automatically. A typical copy trade system will automatically mirror the lead trader at all times. You can set it up to invest the actual same amount as the lead trader, or you can set it up to invest a percentage of your funds equal to the lead trader's percentage.

Though crypto copy trading doesn't require your input, you can add input if you want. You can halt any trade the software makes, and you have the option of manually closing a position before the principal trader does. Crypto copy trading isn't tied to any specific trader, so you can switch up the person you copy whenever you want.

For crypto copy trading to work correctly, you have to actually have access to another person's trades. How do you get another trader to consent to this? Most copy trading software makes this easy. You look over a selection of principal traders and find someone with results you like. Then you use the software to automatically begin mimicking that person's trades. You get the profits from the trades, and they collect a small fee, which is usually around 5% to 10% of your profit.

This system might sound very futuristic, but it's actually a time-honored technique. Copy trading has been around in one form or another since 2007. It's very reputable and is recognized by the Financial Conduct Authority, European Securities and Markets Authority, and other regulatory organizations. These organizations place a lot of regulations on copy trading, so as long as you use an authorized copy trading service, you can be confident it's a legitimate trading method.

Pros and Cons of Crypto Copy Trading
To see if crypto copy trading is right for you, it's helpful to learn a little about its pros and cons.

The advantages of copy trading include:

• You can use the metrics on copy trading sites to quickly and clearly identify traders with winning strategies.
• Copy trading lets you free up your time for other matters while the software does the work for you.
• You get to invest your money based on statistics, instead of letting your emotions impact your trades. Copy traders are less likely to make mistakes due to panic or FOMO.
• Since you're following expert traders, you can make informed trades without having to do all the research and learn about the cryptos yourself.
• Copy trading lets you closely see what other investors are doing, so you get a lot of insight into how the crypto market works.
• Using another investor's ideas makes your portfolio more diverse. Instead of sticking to strategies you personally use, copy trading lets you try out other people's tactics.
• The fees associated with copy trading can be cheaper than paying an investor to manage your crypto trades for you.

However, there are also a few downsides to copy trading:

• Every decision doesn't have to be approved by you, so you lose some control.
• Your trades will only be as good as the trader you follow. Picking the wrong trader to follow can cause you to lose money.
• Since your trades lag slightly behind the lead traders, a very volatile market can keep you from getting identical results. Some sites will cancel orders if there’s a huge difference between the market price and the price the lead trader used.
• Every trader has a different level of comfort with risk. You can encounter issues if you're using all of your savings to copy a trader who has a high risk tolerance and a lot of money to play with.
• You may need to share a small percentage of your profits with the lead trader to compensate them for their work.

2. Why we choose copy trading

Copy trading on DEXs is a less common feature compared to CEXs due to latency and gas constraints. Injective’s sub-second block times and low gas fees can enable automated copy trading through smart contracts.

Resources:
https://learn.bybit.com/copy-trading/what-is-crypto-copy-trading/