Copy-Robot Trading

Hello, I'm an undergraduate and recently I've been introduced to copy-trading from a company. I shall not name it, but basically, it's one with a small market cap.

I fear that if I were to set aside some money to invest in this robo (the winnings are quite a lot), I might risk losing all in the future when the company defaults.

What do you all think?

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Marcus Ching

20 Sep 2021

Business Administration at University at Buffalo

Copying someone’s trades definitely carries a large amount of risk. By copying someone you are embodying their risk tolerance and their biases (or the limitations of the algorithm they are running)

Something to consider is what is the financial position of the firm/individual you are copying? e.g They might be financially prepared to endure a 40% drawdown of their investment, but that may not be something you are prepared to lose.

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Wake Up Your Dollar

11 Sep 2021

Hi! Most copy traders are not regulated in any way and hence can offer take big risks for big returns. Ay regulated platform restricts the amount of risk retail investors are exposed to. And yes, you may lose all your money. In regulated platforms, your your money is being stored in a bank account separate from the company. Even if the company goes bankrupt, you will still get all your investments and money back. The same cannot be said for unregulated platforms. Invest safe man

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