What are Social Trading and Copy Trading?

Although there is a distinct relationship between Social Trading and Copy Trading, they are two different objectives.

Social Trading characterizes the endeavors or undertakings meant to create a synergy to strengthen a crypto community. In contrast, Copy Trading is an aspect of Social Trading that enables users to mirror more experienced trading patterns.

It is beneficial to understand how these two terms contrast as a member or trader of a cryptocurrency and blockchain ecosystem. This will better enable us to explain to new members of the industry.

What are the advantages and disadvantages of copy trading?

There is no mystery in wrapping our heads around how Copy Trading works. It is simple: once a trader makes a successful trade, they can share this trade with other users. IF the Copy Traders so choose, they can opt to mirror the same transaction.

Other than the possibility of gaining profits from mirroring Social traders, Copy Traders may also acquire knowledge and new techniques that may be useful for them in the future.

On Forex type trading platforms, Social Traders are paid a commission for sharing their trades with Copy Traders if the trade is successful. However, this would not be the case in a private decentralized platform such as Compumatrix, where the idea is to help those who cannot trade.

The popularity of Copy Trading has risen quickly. This could help some newcomers or the less experienced become better traders through the practice of Copy Trading. Although it is best to keep in mind, not ALL are cut out to be traders and would benefit more from continuing to do Copy Trading.

Should newcomers become good traders through Copy Trading, they are more likely to share their success. Thereby allowing future Copy Traders to do the same.

Caution is advisable here. Many who promote themselves as “professional” traders and offer their services to be Social Traders are often amateurs. These amateurs could make costly trades for themselves and then, if copied, eventuate losses to the Copy Trader as well. Companies will not assume liability on any loss as any trade decision made by either trader is done by free will and choice!!

New Copy Traders are often too quick to mirror Social Traders, especially those Social Traders with many followers. So, it is WELL to remember just because a Social Trader has a large following does not necessarily mean they are trustworthy.

How does Social Trading and Copy Trading Help the Industry?

According to Statista, the number of cryptocurrency users rose by 25% between Q2 2019 and Q2 2020, reaching an all-time high of 50 million. It is evident that more and more folks, perhaps from the effects of the “Pandemic,” need and search for ways to increase their income. It isn’t a far stretch to assume that many of these are brand new inexperienced investors.

By sharing news or information about trading or developments in the industry, users of all levels could gain knowledge and insight into trading. They could also share ideas and ask questions pertinent to the industry and get input from the more experienced.

With the growth and influx of newcomers to the industry comes a heavy responsibility of the Cryptocurrency Company to ensure they do not jeopardize the community’s growth and forward movement. The newcomers armed with scarcely more than the desire to make money in as little time as possible, tend to harm themselves financially. The community and the Cryptocurrency company usually suffer as well. Lack of trading experience, FOMO (fear of missing out), and a few other factors can generate wrong choices and decisions.

This is perhaps where Social Trading and Copy Trading would greatly benefit a Cryptocurrency Company, the community, and the newcomers.

Cryptocurrency Companies who offer Social Trading should monitor by overlooking their actions to ensure no cheating or abuse creates a poisonous atmosphere for growth and success.

With the knowledge that members are operating within a safe environment, confidence is instilled. Trust helps boost the company’s reputation and that of the whole cryptocurrency ecosystem.

What is hindering companies and exchanges from adopting Social Trading and Copy Trading?

Work remains regarding the innovation of Copy Trading and Social Trading. Only a few exchanges so far have integrated the copy trading feature on their sites. However, this may change soon because exchanges are free to borrow innovative ideas from competitors without the fear of any legal restrictions or actions.

Perhaps the industry does strongly need an intellectual property legal framework to prevent the competition from stealing the innovation created by the hard work of another?

New and emerging markets are especially vulnerable to the threat of theft of their innovations.

Some may think, yes, oversight is needed and should be implemented. Others argue that adopting shared ideas has worked thus far for the industry, and fear any interference may create problems. Naturally, the counterargument is that it takes much dedication, commitment, and many working hours to develop innovation, so laws to govern unfair competitive behavior are essential.

On the one hand, this could bring the communities closer. On the other hand, how much decentralization would be forfeited by creating laws to govern behavior?

Overall, this could be an incredibly useful tool when used wisely and appropriately. Possibly even augmented for use in decentralized environments?

**DISCLAIMER* Please be advised that this is being provided solely as an educational offering. There is no intimation this is something we at
Compumatrix is suggesting setting up to do.
Therefore, we offer this disclaimer:
Compumatrix is not proposing this set up for any member.

About the author

Born in Illinois and the third oldest child of 10 children. Gail learned many lessons in life that would serve her well in her future. Patience, sharing, compassion, understanding, love, and acceptance were a way of life. Family is significant to Gail as a mother of three herself.
Gail lives by the motto "live and let live," and she takes pride in helping others. Educated, yes, but believes life is the best teacher and learning depends highly on an open mind.


  1. Gail, your articles are always very educational! Every time I read one of them I learn a little more about this world of cryptocurrencies. I know I still have a lot to learn, but with your teachings and the teachings of so many other members, I am taking homeopathic doses about what needs to be learned so that when Compumatrix finally opens the services, we can be prepared!

  2. totally agree with the education feature in Gails articles and postings — i have been able to really start to understand the many intricacies involved in the field of cyber business and the many pitfalls that can take place –i am just so very thankful for the time and effort she puts in here to help all of us — rjh

    1. I have benefitted a lot from Gail’s posts and this article is no different. It is indeed a good insight into the possibilities available out there for trading, although one still has to be cautious as well when deciding to copy or social trade for some of the reasons cited above. Thank you Gail for sharing.

  3. Wow copy trading sounds like a mine field if a person “copies” the wrong person and later discovers that he/she is untrustworthy. Because as a trader we have “free will and choice”, companies are not liable for our bad decisions. And even more, just because a trader has a large following we still can’t assume that they are trustworthy. Lots and lots and lots of research would sure need to be done in these situations!

  4. Great blog Gail and yes I have seen it already being offered on a few trading platforms. I like the idea and even I have read your

    **DISCLAIMER* Please be advised that this is being provided solely as an educational offering. There is no intimation this is something we at
    Compumatrix is suggesting setting up to do.
    Therefore, we offer this disclaimer:
    Compumatrix is not proposing this set up for any member.

    Maybe in the future, it could be introduced also to Compumatrix . Many members could profit from this and would love it.

  5. Another great inside and educational blog, we grow daily and learn new things as this technological change is with us and moving very fast. I like the way you have put large follow up doesn’t really legitimize the process but due diligence is required too and have the correct information. Thank you once again.

  6. Thank you  Gail very useful blog and got to learn a lot from this blog about copy trading and social trading.We can copy successful traders and very good chance for being successful,we can easily follow social traders and copy traders for our benefits.All compumatrix blogs educates us.

  7. Thank you Gail, it is always helpful being reminded of something that is a new area of learning for me. I have been self-employed for many years but found that one way to improve the way I marketed myself was to research and look at what others were doing in my field and were being more successful and busier than me. Then I could copy or implement some of what they were doing in my own work. I look forward to learning and copying successful traders as I develop my compumatrix business.

  8. Thank you Gail. The more educational information that is posted will assist us as we go foward. It is so important that we read and use this information. If we learn how to copy successful traders it will only enhace our assets and help make Compumatrix grow and prosper.

  9. I love your stat about the number of crypto users in the first quarter of 2019 raising %25 to 50 Million users. That’s such good news for our industry. I wonder if you could also call it copy trading when we in the past were all working off the same spreadsheet that Henry made and were just plugging in the numbers from the algorithm that he made. Or maybe that was just “copy and paste” trading ?

  10. Gail, Gail, Gail…is there no end to your wonderful posts? Thank you for explaining Social & Copy Trading. Personally, I’m all for the choices that lead to decentralization. Those who are doing the innovating will be rewarded, no doubt about that. Those who want to misbehave in this environment will be weeded out in time, no worries about that on my end. As long as “we the people” choose the path that serves all of us, and not hand it over to governance, we’ll get there. If we’ve learned anything as founding members of Compumatrix, Faith will carry us through. This is our time to choose.

  11. Before this article I did not know that social trading and copy trading were two different things. For example, in a society like ours processes, ideas, and trading methods are constantly changing so it is a good idea to learn about and how to use both. Since many platforms are beginning to include copy trading into their processes, it is important to understand it so you can maximize your trading.

  12. Fantastic Blog Gail and very informative. I never knew the two different types existed. I think the Copy Trader could be a useful way to learn how to trade better as long as like you said, you followed the right Social Trader and looked to learn as well. This could be a huge benefit for learning.

  13. Thank you for the clarification about Social Trading and Copy Trading. I agree that it could be beneficial if used in an educated community. Like anything in the crypto space, it is very important to do your research and make wise decisions based on facts. It is constantly changing and new terminology and trading is evolving.

  14. just getting back into reading all these great blogs and the replies often times help out the educational part of the mission –i find that when I read replies and they offer their inside opinions and wisdom –i learn and then add more to my understanding which is good thing —

  15. Gail, my confidence is such that I do not feel I would make a creditiable social or copy trader. There is the fact of who we would be following or learning from, and how creditable they are. I like it the way Compumatrix does it and trains individuals who wish to and are confident to do so. With Compumatrix showing us how to acquire digital assets without the trading is a welcome avenue for me.

  16. I just Googled this for more info because it is so darn interesting and there is loads of info….very good to know great blog…. I would like to start trading but would want to study some videos first. You can always start with fractions in case you mess up no big deal experiment with it a bit until you can hang with it

  17. This is a very interesting topic! I think it would be the perfect answer to integrate on our CDAP so that members who can’t trade for the life of them will be able to just copy what a Social Trader does!! I am one who would copy!! I know my limits and trades are beyond those limits!! I guess you gotta love it to get deep into it..lol

  18. Gail once again a great insightful as well as inciteful blog.clarification of the Social and copy traders was great.Iget close to 10 emails from various trading companies offering expert advice at a price with a caveat that future performance is not guaranteed based on past performance.that was the stock market people.Now the New Genre of investment advisers have sprouted up touting their wares and claiming to be Gurus and know it all about Cryptocurrency and how we should subscribe to their services. ave not yet fallen for that and hope to stay that way.

  19. I am grateful that I neither can nor need to trade. To me, it seems very risky. I gladly leave it to those who master trading to trade on behalf of Compumatrix and try to make myself useful by commenting on blogs. Trading is not what I need to learn the most. Training in the English language comes first.

  20. this is so in depth and not sure really if i would make a trader or not but may after more research and learning may give it a go ?? Time will tell and like the copy trader aspect as long you are copying a legit trader and honest one — the social one not sure yet — but such insight G and much appreciation truly —

  21. still learning from some great info provided by some great Pros here and still not sure where the future goes for me personally but dadgum this blog is thought provoking and makes me dig deeper and research more — but as in all things Honor and Integrity go the distance and unfortunately life has taught me that no matter what it has been there always seems to be a few who try to shortcut themselves to money and it just a sad thing but True Thing — so we must always be ON the Awares — keep Heart True but Your Eyes Wide Open — jmho rj

  22. While social trading is good for successful traders who can develop a large group of followers over a social trading network, it can also be useful for beginners just wanting to learn the basics as it can provide an avenue for traders who only want to trade small sums of money.

  23. I undoubtedly would be in the copy trading group. It is described as being simple as funds are allocated to a trader to copy trade, and then trades are copied and allocated in the same proportion as the trader

  24. Hello Gail, your articles are always very educational! Every time I read one of them I learn a little more about this world of cryptocurrencies. I know I still have a lot to learn, but with your teachings and the teachings of so many other members. I’m so happy to be a part of Compumatrix as it has shown me how to to acquire digital assets without the trading which is a WIN WIN for me.

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