Copy trading is a service for automated copying of the orders of a manager's strategies.
How does the service work?
Step 1 - You choose a manager and invest in their trading strategy.
Step 2 - The manager trades with their funds, and the service automatically copies their trades.
Step 3 - The manager earns, and you earn too.
It is helpful for beginners to follow the trading strategies of experienced managers, analyze their strategies and watch the trading process live while making a profit. Then you can start trading on your own with an increased balance.
At the same time, if the manager trades a larger volume than your balance allows, you can use a reduced volume for copying trades. But note the size of the transaction should be at least 0.01 lot.
Please note that the broker arranges copy trading so that the manager only earns a commission from your orders when you earn. Such investment is safer because the manager is interested in your good profit.
For example,
Grand Capital offers such a service,
GC invest:
https://grandcapital.net/investment/investor/. Here, the High-Water Mark (HWM) system is used to pay the commission to managers: The manager receives remuneration from the net profit earned for the investor. GC Invest uses the high-water mark system. This is a reward system in which managers receive their commission only when they generate a net profit for the investor. HWM is calculated from investors' accounts, which are individual for each investor.
Ultimately, copy trading is useful for a beginner to try the service to track the trading process and gain experience and profit simultaneously. An experienced trader can become a manager and receive additional income from trading.