Is Zero Brokerage Copy Trading Worth It?

 

Is Zero Brokerage Copy Trading Worth It?

Whether you're interested in learning new strategies, trying out ideas, or wanting to get rid of high transaction costs, zero-broking copy trading is a popular option for traders, particularly in India. Let's take a look at the advantages, risks, and considerations of zero-broking copy trading before you open your wallet to turn to investing.

Zero Broking Copy Trading

Zero-broking copy trading is a mechanism where traders can simply copy purchases from expert traders without having to pay the standard broking fees. Brokers like Zerodha, Alice Blue, Angel One, mStock, Flattrade, Kotak Securities, Sharekhan, 5Paisa, Stoxkart, Goodwill Commodities, Zebu Trade, and Paytm Money offer services to support the ability for beginners and busy traders to enter markets.

For example:

  • Zerodha charges ₹20 an order or 0.03% (whichever is lower) but allows you to copy trade through various third-party provider platforms.
  • Alice Blue offers zero broking, very low costs to have a trading and demat account, and leverage for purchases.
  • Flattrade also provides the option for free demat and trading accounts with zero broking. 

Zero-broking platforms allow you to invest money with the absolute lowest cost, and your primary focus will just be to find expert traders and copy their strategies.

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Advantages of Zero Broking Copy Trading

1. Cutting down on your trading costs

Eliminating any broking commission fees to trade significantly reduces your overall trading cost. This is especially beneficial for those who trade often and for beginners that may not have a lot of capital.

2. Great accessibility to markets for beginners

Zero broking trades allow newbies to readily access the equity, commodity, currency, and F&O markets without excessive technical knowledge or extensive market monitoring. Many traders can simply follow experienced traders.

3. Time efficiency

By nature, copy trading is passive trading. You simply copy trades made by successful traders, saving you hours of market research and analysis. Services like mStock and Flattrade allow you to set up an account and automatically copy trades.

4. Great potential for diversification

By copying multiple traders who use different trading strategies and invest in various asset classes, you can diversify your trading portfolio, which leads to reduced risk. 

5. Learning process from expert traders

Tracking and/or following expert traders' strategies allows you to analyse the market decisions of seasoned traders and gain valuable knowledge. After time you should be able to take notes and improve your own trading.

Risks and Considerations

1. Potential for Loss

Mistakes can happen even to professional traders. If you are using a trader's methods, your capital is at risk if they are not successful.

2. Less Control

Copy trading means you will have diminished control over individual trades. The performance of your copy trading account depends on the choices made by the trader you copied.

3. Risk of Over-Reliance on a Trader

The performance of your copy trading account may be negatively impacted by one trader having poor performance or taking on excessive risk. For protection, you should follow multiple traders and ensure diversification.

4. Market Risk and Systematic Risk

All investments are subject to fluctuations in the market. Zero broking is not a protection against negative price conditions in the market. 

5. Executing an Unrealistic Expectation

While a trader may seem to be consistently profitable, past success gives no indication of how they will perform in the future. Research their performance history and feel confident copying their system, plan, or method.

When Should Someone Use Zero Free Copy Trading?

  • Individuals with little experience or many other commitments who want to be exposed to the market with little to no involvement.
  • Individuals who want to diversify their portfolio with a variety of strategies and different assets.
  • Individuals who are willing to do the necessary research to find a suitable, effective, and trustworthy trader with which to copy their trades.

When It Might Not Be Worth It

  • You prefer to manage the trades yourself and want to make trades and investment decisions independently.
  • You do not have the time or interest in finding trustworthy traders.
  • You are not comfortable with market risk and the possibility of losing money.

Check out the pricing details for copy trading 

Price

Why Combiz Services Pvt Ltd Can Help

Platforms like Combiz Services Copy Trading Software make zero-broker copy trading more efficient and safer for your copy trading experience. Combiz Services Copy Trading Software supports multiple brokers, has great real-time analytics and integrates automatic master-child accounts. You can copy expert traders' trades from Zerodha, Angel One, Alice Blue, Flattrade, etc. You can also use Combiz Services Copy Trading Software to mitigate risk, enjoy the benefits of copy trading from a zero-broking broker, and sleep better at night!

Conclusion

Zero-broker copy trading is extremely beneficial, particularly for new traders and those with limited time. You can avoid, monitor and diversify trading costs while getting the opportunity to learn. But it does carry risk. Selecting an honest trader to copy from, following their investing success, and ensuring you understand the risks that come with the market is important. Platforms such as Zerodha, Alice Blue, Angel One, Flattrade and Kotak Securities are all well-known platforms to consider when starting to engage with zero-broking copy trading in India.

By introducing software like Combiz Services Copy Trading Software to zero-broking brokers, traders can take zero-broking trading to the next level by automating their trades and managing multiple accounts, trading with efficiency. Sounds like the future of modern trading to me!

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