Mirror Trading in Crypto, Explained

Due to the volatile nature of the cryptocurrency market, crypto trading poses significant risks for novice traders. Some of the ways to reduce these risks involve using trading strategies that emulate the market moves of experienced successful traders — mirror trading and copy trading. In this article, we’ll take a detailed look at mirror trading and its applicability to crypto.

What Is Mirror Trading?

Mirror trading is a strategy whereby you precisely copy all the market moves of an established and well-performing trader in a real-time format to replicate their success. This trading strategy relies on automation to immediately mirror all the trades placed by a Master Trader, whose behavior is being “mirrored.” It’s considered to be an algorithmic trading strategy.

Mirror trading originated in the first years of the 2000s, thanks to advances in the development of trading software. It was first used in the stock market and forex trading. More recently, mirror trading has become available on some crypto trading platforms as well.

Originally, mirror trading was limited to large institutional traders. As trading became more dependent upon automation, and the cost of trading software declined, retail investors also started using it. By now, mirror trading is a commonly used strategy in the stock market, forex and commodities markets, and, increasingly, in the crypto market.