What you should know to not lose money with copy trading

Disclaimer: There may be errors in this article, I’m not an expert and take all of this with a grain of salt

The risks I would like to talk about are 2

The first concerns only crypto: In fact, as we know they are usually decentralized, in fact only we own our crypto, however some crypto copy trading platforms require you to deposit the crypto in their wallets, which will still be connected to your account, however this is a big risk, in fact the platform it could disappear at any time and no longer give you your crypto, or a technical problem may occur that no longer makes you have your crypto. Surely you have to be very careful, and maybe avoid these types of platforms. Some signs of reliability may be if the platform has been around for a long time, if it has a good community that supports it, if it has a good reputation on the internet, if it has many active users, and perhaps if it is open source.

The second risk is much more deceptive, in fact when you are looking for new strategies / traders to “copy” maybe the platform will show you the ones that (even in the long term) are more profitable, without seeing those that have failed or because they are difficult to find on the platform. or because they were just canceled!
Maybe you can think: ok, I don’t care, so I choose the most profitable ones in the long term, the problem is that these too can fail at any moment and be replaced by new strategies that in the meantime have proved to be profitable than before. appeared among the best! If you follow a strategy / trader to “copy” to get out of it well you either have to know when to leave the strategy or if it is closed in a profitable way, but why close it if it is profitable? Mhm ….
The best thing is if the platform gives the possibility to see the closed strategies with their statistics, in order to see if among the closed ones how many were profitable or not in the end.
Without this data, you can seek feedback from the community, or compare how many strategies are currently losing money, or monitor the main strategies in the platform over a period of time.