This new feature will also be a source of passive income for lead traders, as they are entitled to a 10% profit share and 10% commissions from their copy traders’ trading fees.
Binance has announced the launch of spot copy trading. This system allows traders to replicate the strategies of other top traders within the platform, with the opportunity of copying up to 10 portfolios at a time.
This new feature is now available on both the Binance app and website, allowing users, “Copy Traders”, to benefit from the expertise and experience of skilled traders, referred to as the “Lead Traders” by easily replicating what they do. This new initiative will help young and inexperienced traders by allowing them to gain insight into various trading strategies and learn from the success of more experienced market participants.
The exchange revealed that there are two types of copy trading modes: fixed amount and fixed ratio. The fixed amount refers to the specific fund per trade set by the copy trader to carry out copy trading, while the fixed ratio mode allows them to set a total investment amount for their portfolio. The system will mirror the lead traders’ moves based on the amount imputed.
Before clicking on any lead account to follow, Binance has enabled transparency by allowing copy traders to do a trading performance check on each lead trader. Metrics such as investment (ROI) and profit and loss (PnL) of the skilled trader’s portfolio can be reviewed before deciding which strategy to replicate.
This new feature will also be a source of passive income for lead traders, as they are entitled to a 10% profit share and 10% commissions from their copy traders’ trading fees. They will also receive other exclusive benefits.
Ensuring Fair and Transparent Trading
The exchange has also established rules to ensure a fair and transparent spot copy trading experience for both the copy and lead traders. These rules govern how buy and sell orders are executed and how sizes are calculated, among other things.
For buy orders, the copy trader’s order is proportional to the lead trader’s. However, both accounts are subject to slippage. Sell orders for copy traders are executed at the current market price, and if the lead traders sell a portion of their position, the copy trader’s position will also be automatically affected as it will experience a reduction proportionate to the lead trader’s action. It was also stated that when a copy trader’s account drops below a certain minimum account required for copying trades, resulting in them missing out on copying five trades in a row, such an account will be closed.
Using the Binance spot copy trading feature is simple. Users must first log in to their Binance account, navigate to the trade section, and click “Copy Trading”. After that, they should choose “Spot Copy Trading” and scroll through the available portfolios. Once they identify a profile or strategy they are comfortable with, they can click the “Copy” button to mirror the lead trader’s strategies.
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