{"id":7198,"date":"2024-01-07T01:59:47","date_gmt":"2024-01-07T06:59:47","guid":{"rendered":"https:\/\/finestel.com\/blog\/?p=7198"},"modified":"2024-01-07T15:02:30","modified_gmt":"2024-01-07T20:02:30","slug":"how-to-choose-the-right-crypto-copy-trading-software","status":"publish","type":"post","link":"https:\/\/finestel.com\/blog\/how-to-choose-the-right-crypto-copy-trading-software\/","title":{"rendered":"How to Choose the Right Crypto Copy Trading Software to Manage Your Clients: A Complete Checklist"},"content":{"rendered":"

Generally, two types of crypto copy trading<\/a> exist. First, copy trading on an exchange as a service or feature, such as eToro, Bybit, and so on, is simple and a good option for beginners to dip a toe into the industry. The second model, copy trading via API access (or API copy trading), although still simple to understand, has lots of capabilities that no crypto exchange can compete with.<\/span><\/p>\n

\u201cThird-party copy trading\u201d and \u201ctrading bot\u201d or \u201cauto-trading\u201d platforms are the most popular types of API copy trading. Alongside those, we\u2019ll introduce a brand new system called copy trading SaaS to you, which is primarily designed for pro traders with a community of clients.<\/span><\/p>\n

So, in this review, comparison-ish paper, we\u2019ll tell you about the benefits and capabilities of API copy trading, briefly break down the existing models, and then see, based on the trader\u2019s needs, which one\u2019s the best option to pick.<\/span><\/p>\n

Values of API Copy Trading for Crypto Pro Traders (Checklist)<\/span><\/h2>\n

Available copy trading services are mainly designed to provide to the general public or mass users. Finestel on the other hand, was designed based on the crypto asset management industry\u2019s demands and what pro traders need. So, we look at things from the traders\u2019 perspective mostly. First, let\u2019s see what an API is.<\/span><\/p>\n

What is API Access?<\/span><\/h3>\n

API (Application Programming Interface) is a communication channel between apps, pieces of software, and computers\u2026, signed via \u201cAPI Keys.\u201d The keys grant certain access to the connected parties to perform actions, request data, and so on and so forth.<\/span><\/p>\n

\"Comparing<\/p>\n

Copy trading platforms usually use two types of API access (read-only & trade-only) to connect to crypto exchanges for either reading and copying trades from, (trader accounts via read-only API keys) or executing replications of the copied trades into (copier accounts via trade-only API keys).<\/span><\/p>\n

Now, let\u2019s get into the values:<\/span><\/p>\n

1. Portfolio Tracker<\/span><\/h3>\n

Most platforms have an embedded portfolio tracker as it\u2019s mandatory for running copy trading properly. However, you\u2019ll find much more sophisticated portfolio tracking services on independent copy trading and auto trading platforms than what you see on crypto exchanges.<\/span><\/p>\n

<\/p>\n

Portfolio tracker apps can simultaneously monitor multiple connected exchange accounts which will allow the users to get rid of frequent log in\/out and the risks it has. You can instantly switch between your connected accounts to extract reports, check your open positions, and so on.<\/span><\/p>\n

Discover the top 5 crypto portfolio trackers<\/a> in 2024.<\/p>\n

2. Reporting<\/span><\/h3>\n

Live indicators that show your portfolio changes and historical track records that are available to export in popular formats are another value of copy trading. Although crypto exchanges do have reporting systems available, just like portfolio trackers, independent copy trading and bot platforms perform the service much more sophisticatedly usually. Copy trading SaaS makes it possible for the trader to customize their preferred reporting service, with their brand on it.<\/span><\/p>\n

\"Finestel<\/p>\n

3. Potential to Multiply Profits<\/span><\/h3>\n

Copy trading in any form has the potential to make multiple times more money than the copied trade does, although it depends on the platform\u2019s pricing models. Some platforms have a single pricing model (e.g. Bybit\u2019s profit sharing), some others allow more choices for the trader (e.g. performance, management, and subscription fees), and then some platforms like Finestel allow the trader to customize pricing methods or personal\/private payment systems.<\/span><\/p>\n

4. Accuracy<\/span><\/h3>\n

Copy trading is usually implemented via fully or partially autonomous algorithms or trading bots. Depending on the design sophistication, copy trading bots are capable of executing trade replications at a rapid pace and laser accuracy, yet proportionally.<\/span><\/p>\n

These bots not only can execute a huge number of trades simultaneously, but also perform P&L calculations, payment and transaction automation, and so on. They can significantly reduce human errors and emotional decision-making in trading sessions.<\/span><\/p>\n

5. Efficiency<\/span><\/h3>\n

Advanced copy trading bots can proportionally distribute trades on a network of investors (copiers, followers, clients\u2026) consisting of an infinite number of accounts. The outcome of such ability is automated asset management being performed in a fully non-custodial manner.\u00a0<\/span><\/p>\n

Plus, well-designed copy trading platforms also have client management automation, portfolio tracking, and reporting services, which are mandatory to have if you have a high AUM (Assets Under Management).<\/span><\/p>\n

6. Client Management<\/span><\/h3>\n

Pro traders use copy trading platforms for efficient portfolio management strategy implementations into their community of clients\u2019 accounts, and the outcomes will be way too much to be handled manually. <\/span>You\u2019ll need automated reporting, notification, payment management, and billing systems, which are much more accurate and efficient than us humans.<\/span><\/p>\n

\"portfolio<\/p>\n

API Copy Trading Models<\/span><\/h2>\n

For a reliable comparison, let\u2019s start with sorting the models, discussing their values and flaws, to find out which is the best copy trading method for different types of crypto traders.<\/span><\/p>\n

Social Trading Platforms<\/span><\/a><\/h3>\n

The \u201cplatform\u201d could be a subsection of a crypto exchange (e.g. Bybit, OKX), or an independent platform (website, app, etc.) that executes trades on crypto exchanges via API connections (e.g. finestel.com). In other words, social trading is an atmosphere in which pro traders make their trading strategies available to copy for other participants.<\/span><\/p>\n

Social trading consists of two sides, traders and copiers. Traders (or strategies) are exchange accounts, connected via read-only (or trade-only in some cases) API key configurations, which the platform copies the trades from and executes a replication of them into the copiers\u2019 accounts (connected via trade-only API key configurations).\u00a0<\/span><\/p>\n

Crypto Social Trading Features & Downsides<\/span><\/h4>\n

Crypto social trading is perfect for newbie traders, public investors and also pro traders who want to gain more income from their trades, due to the non-custodial AUM.<\/span><\/p>\n

Social trading usually comes with most of the values we mentioned further above; depending on the development sophistications though.<\/span><\/p>\n

The Downsides:<\/b><\/p>\n