Copy trading has become an increasingly popular method for people, whether new to trading or experienced traders, to copy a successful strategy and devote no more than five to ten minutes a week to manage their trading position without spending hours analysing the market. Zerodha is one of India's leading stockbrokers and has an excellent copy trading platform with Zerodha Kite and Zerodha Pi, which makes it easier for traders to follow experts, but taking the time to understand technical analysis, even when copy trading, will increase your profitability and decrease your risk.
Technical analysis is the study of past price movements, charts and volumes and is used to forecast potential future movements. While copy trading has automatic features that allow you to follow expert traders, it is important to have information on some fundamental elements of technical analysis to help you know which traders to copy and when to get in and out of trades.
Here are some important technical indicators you might want to watch for while using Zerodha's copy trading software.
Using these indicators along with a reliable copy trading platform like Zerodha helps you understand the trades being copied in real time.
Analyze the Trader’s Historical Performance
It is necessary to study how they have traded jointly in the past. You want to see their positive or negative reactions to market volatility. Technical analysis resources found in Zerodha Kite and Pi would give you more insight into the trader's trading style.
Set Proper Stop-Loss and Take-Profit Levels
It is important to consider stop-loss and take-profit levels while following trades. Regardless of what trades you may copy, stop losses and take-profits can limit your losses or secure some of your profits. Newer copy trading software through Zerodha will also let you customise accountable stop-loss levels based on their acceptable risk level.
Use Multiple Indicators
Would you rely solely on said indicator for any trading signal? Using a single technical indicator may lead to misleading signals. For example, using an RSI, MACD, and moving averages adds a much clearer view of market trends and ensures that the trades you follow each have sufficient probability to produce a successful trade.
Keep Updated With Market News
The absolute best way of using technical analysis is to stay in tune with market turning points for real-time reporting. Zerodha live market updates and alerts provide information that helps you stay on relevant news when copy trading.
Copy Multiple Traders
The best way to avoid copying the most unsuccessful trader is not to copy a trader at all. Using the Combiz Services Pvt Ltd copy trading software, you can reasonably expect varying conscientiousness from multiple experts. This will diversify your exposure and provide more returns over time.
Zerodha provides a hassle-free copy trading experience with its user-friendly platforms:
With these tools, it allows any trader to follow strategies with confidence while still the trader has some technical understanding.
Although copy trading on Zerodha creates a more automated trading setup, understanding some basic technical analysis concepts can pay off substantially. For example, you can improve your results significantly by assessing the trades and strategies, implementing basic indicators such as MA, RSI, and MACD, implementing stop-loss levels, and varying your trades to maximise profit while managing risk. Copy trading software like Zerodha Kite, Zerodha Pi, and other solutions from Combiz Services Pvt Ltd make it easy for both a novice and an advanced trader to manage copy trading at the highest level.
Start copy trading today with Zerodha, and use technical analysis principles to support your ongoing portfolio growth!