Copycat Traders: A Great Way to Learn To Trade

Posted by tradeyouredge on September 15th, 2014

During the Japanese revolution in 1800s, the Japanese politicians toured Europe and the USA to learn western ways. The result was a deliberate state led industrialisation policy to enable Japan to quickly catch up. In the modern age, many developing countries take it one step further by employing skilled foreigners to work in their country in the hope that its nation will benefit indirectly from it.

As you can see, copying a skill is nothing new. In fact, I think it’s a great way for traders to learn and develop quickly – especially at the start of their trading career. Once you managed to copy and execute a pro trader’s trading system flawlessly, you are in a very good position to build more knowledge and eventually start to develop your own trading system as well as your own Trading Edge.

Important Note: In this article, I’m NOT referring to new traders who are taking mirror trades by imitating entries and exits through the use of social trading platforms.

How Do You Copy a Trader?

When I started trading, I was as lost as any new traders can be. I went through many phases where I wanted to try everything. Thankfully, I was fortunate to have a coach, Mark, who guided me in the right direction.

After a few coaching session with Mark, I knew he was a good trader and that I made a decision to fully Trust him as a coach.

At the beginning, I started with an intraday with-trend system. I realised quickly that I didn’t like the timeframe of the system. Mark then moved on to teach me his own reversal system (back then that was the only thing he traded). That was it. I fell in love with reversal trades.

A few months down the road and, without even realising it, I became a copycat trader. I pretty much copied Mark’s trading style and became a reversal trader. I would ignore any with-trend trades and I was pretty comfortable not taking them.

And that’s how you become a copycat trader. It’s not rocket science and it’s easy to copy a trader. All you need to do is to learn everything there is to know about his system and his belief.

The Secrets of a Good Copycat Trader

Right, so you might have read the above and think that being a Copycat Trader is easy and you’re probably going to start right away.

Well, I’ve told you the whole story but the chances are that you probably only half of it and may not don’t get it. And that’s because you need to read between the lines.

Here, I’ve highlighted some key points from my story above. So, to successfully copy a Trader, you need the following:

1. Understand the Trader and his Personality

Mark was an entrepreneur before he became a Pro Trader. His thought process and risk appetite is of an entrepreneur. For example, to him, trading is like any business, he believed that you need to take a certain amount of risk for a potential return.

That was great for me as I was looking for a fellow entrepreneur who would understand why I need to make trading work. More importantly, because I was an entrepreneur too, I understood his thought process and, hence, his lessons very quickly.

2. Copy one Cat at A Time

It’s easy to learn if you only have one source of information. For example, as a child, the only people you could learn from where your parents. Hence, you are a copy of your parents in terms, of their family values, beliefs and habits.

Unfortunately, Amateur Traders struggle these days because there’s too much information on the internet. They pick and choose to learn from a few sources at the same time. The end result of that is – Confusion.

If you joined a trading school, like me, you’ll probably be exposed to many trading coaches and the chances are that they all traded very differently. If you’re following Trading books or forums, there will be average, good and great traders out there as well. Again, they all have their own trading style.

My advice is, do your homework. All Pro Traders have an Edge and that Edge would define their trading style, trading timeframe, belief system and etc. Once you learn and understand a few of traders, pick one that you’re most comfortable with. More importantly, keep to that same person for a period of time before moving to the next one.

3. Trust

I cannot emphasise how important it is to Trust the “Cat” that you’re about to copy. By trusting him/her, only will you be able to fully engage, learn and appreciate another person’s trading.

On the contrary, without trust, you will not be able to go All In. Which means, you will not be able to absorb (or copy) fully the information that you need. And that is because your Belief System is no intact. If your Belief System is shaky, you will very easily give up or be influenced by other traders.

For example, if you don’t trust a person, your mind is not completely switched on and it often drifts away from its focus. However, if Anthony Robbins or Richard Brandson is sitting in front of you now, without a doubt, you’ll be picking up every word that he is saying.

4. Be Specific

When I started trading, I gave my coach specific details about what I was looking for. The decision was that I will be thought a with-trend system. However, I realised quite quickly that I was too emotional and I didn’t want to trade systems with small timeframe (that was the main timeframe for the system). Because I was specific in the selection process, Mark was able to identify very easily what was suitable (or not) for me. With that, he manage to find and teach a system that I enjoyed on the 2nd attempt.

Of course, you might say that you don’t know where to start. And I agree, it’s not easy.

Nonetheless, have a think about this – the more detail that you provide, the easier it will be to find the mismatches. And hence, the faster it’ll be to get it right in the future. Make sense?

Conclusion

Whether you realise it or not, everyone starts learning through copying someone else. The common problem is that many amateur traders don’t stick around long enough to copy and learn any single system successfully.

On the other hand, all you need is one profitable system to be a profitable trader. So be patient and just learn from one source until you can produce profitable results. If you decide to learn a completely new system, you know you can always fall back to the initial system. And that’s a very good position to be.

Hope that make sense and hope you’ve enjoyed this article.

Thank you for reading and happy Copycat-ing.