Crypto Copy Trading Software Development: A Complete Guide

A crypto exchange platform should allow entry-level, intermediate, and advanced users of cryptocurrency to take advantage of the trading success of others and help them remain successful, too. This is what a crypto copy trading platform does. It has developed into one of the best tools available today. 

Rather than having to analyze charts over a period of months before entering into a trade or making a decision, a user can simply imitate the live trades being made by someone else who has a proven track record of making money by trading cryptocurrency in real-time. 

As social and automated trading solutions become more widely accepted, companies providing copy-trading solutions are paving the way for easier-to-use crypto investments.

Overview of Crypto Copy Trading

Crypto copy trading is a method that allows users to copy the trading strategies of other successful traders automatically. When a trader makes a change to his or her account, such as by changing the price of an order or closing a position, that change is automatically made in the user’s non-trading account proportionally to the same amount of money. 

Unlike a standard trading account, where you would have to guess what would happen, this type of account will give you a hands-on experience of live market conditions while trading in real-time.

Many of the leading companies in the cryptocurrency copy-trading market today have already demonstrated how effective the copy-trading model is for growing their user base. An automated trading model will allow many traders to become full-time traders, thus increasing their productivity, while at the same time allowing those same traders to make additional income by sharing their profits with their followers. 

With the increased adoption of cryptocurrency as a viable form of trading, copy trading is quickly becoming one of the most sought-after tools within today's trading environment.

Benefits Of Crypto Copy Trading

• Quick Entry to the Market

New entrants to the trading world can learn to trade quickly through copying successful traders, gaining both the benefit of learned strategy and confidence in being able to build their own strategies. As a result, they become better equipped to make sound trading decisions and will likely continue to increase their trading success.

• No Emotional Trading

Emotions create challenges when trading. Utilizing an automated system allows the user to purchase based on sound rationale, instead of emotions, and thus achieve the same trading results over a long period of time. This can help the user remain consistent in their trading performance throughout the long term.

• Automates Time and Effort

No longer does a trader need to sit in front of their computer screen for hours analyzing charts and other market data. An automated system will make all trade decisions and execute all trades in real-time automatically. This makes trading possible for anyone with a limited amount of time to trade.

• Allows For Multiple Trading Styles

Traders can follow and automatically replicate the trades made by many different traders who have various styles of trading and varying degrees of risk tolerance. By diversifying your trading approach, you could improve your overall performance.

• Provides New Passive Income Opportunities for Expert Traders

The traders who create these automated trading systems can earn an additional revenue stream in the form of commissions for each time another trader copies one of their trades. As their trade reputation grows, so too does their chance of finding new paying customers. This can encourage expert traders to maintain their successful trading habits.

How to Create a Crypto Copy Trading Platform

• Conduct Market Research

Starting with extensive research of your competitors and their platforms, you will be able to gain insight into the type of product or service that they offer, as well as how their customers use and engage with the product or service. 

Researching the features that customers find most attractive/valuable and the preferences of each demographic segment will also give you insight into what possible opportunities you may have within your target market, as well as where your product will fit into your competitors’ offerings. Once you have conclusive research, you will have everything you need to create a complete research report that includes all the data you gathered and the path to launching your product successfully.

• Know your Target Audience

Is your platform developed for beginner traders or professional traders, or institutions? The behaviours of your customers will help you understand which features and user interface/user experience to incorporate into your product development. By focusing on your target customer segment, you will have an increased engagement and retention rate.

• Find the Right Technical Stack

When selecting your platform's technology stack, it is important to consider performance and scalability. You will ensure that your platform's technology stack gives your platform smooth execution of trades, and at the same time, helps to reduce long-term development costs.

• Build Your Core Features and Capabilities

Your platform will require the following modules: copy engine, trader analytics, leaderboards, portfolio management, and automation tools. The most important thing in this step is to focus on features that will enhance the user's ability to use the platform and operate their trading accounts efficiently. This defines the value of the platform.

• Add Security Features

The implementation of encryption, MFA, API protection, DDoS mitigation, and fraud detection is essential. Security needs to be integrated at every level so users can have confidence in the platform, and for that reason, a secure platform will attract both traders and institutions.

• Test and Deploy

It's critical to stress-test, function-test, and conduct security audits on your platform before it launches. The bug fixes, speed optimization, and verification of every trade operation should be completed before the launch of the platform, as a stable platform will provide a higher level of user satisfaction.

• Continual Support and Maintenance

Ongoing monitoring and updates, along with increasing capabilities of the platform, maintain a competitive advantage to keep the platform continuously relevant, ensuring that users can resolve issues quickly and effectively. Extended support will provide a consistent and reliable way for users to use their platform.

Key Features of Crypto Copy Trading Platform

• Automated Copy Trading

This feature allows users to replicate successful traders automatically, at the same time as the expert trader is executing their trade. There is no need for a user to manually replicate trades, as all buy/sell/modify orders placed by the expert trader will automatically appear on the user's account as well. This way, users can always take advantage of the opportunities available. It provides a hassle-free trading experience for novice or busy investors.

• Trader Performance Analysis

Before deciding to copy a trader's performance, users can view the verified history of each trader's performance through metrics such as ROI, win/loss ratio and risk/reward profile, along with an understanding of how they compare to other traders in the marketplace. By providing this information, the user can more effectively manage their risk and make informed investment decisions.

• Customized Copy Options

Before copying an expert trader, users can set maximum investment amounts and stop loss prices, as well as other risk preferences. This provides users with full control over how their money is invested. It also provides secure investment for users and allows them to build their portfolios in line with personal objectives.

• Leaderboard /Trader Rankings

An intelligent ranking system ranks traders based on their actual performance and risk. Users can filter their search for the best traders to copy by ROI, strategy type, or trading frequency. This makes it simple for users to find reliable expert traders to copy.

• Multi-Exchange API

Users can trade on multiple accounts across all the major exchanges (Bitfinex, Bitstamp, etc.) from a single dashboard using the API connection provided by the trading platform. This makes it easier for users to manage their investments and offers them increased flexibility in terms of how they trade and what types of strategies to adopt across the different exchanges to maximise the potential return on their investments.

• Social Trading Stream

Users can share trade insights and ideas in a community-created social trading stream. The shared stream serves as a learning and engagement tool, allowing users to learn from experts and understand market behaviour.

Security Features of Crypto Copy Trading

• End-to-End Encryption

All of the user's/account information (data and API/Login) is encrypted, and therefore, cannot be accessed without authorization. If a breach does occur, the data will remain unreadable, keeping the user's trader information completely private.

• Two-Step Verification

Users must verify their identity before accessing their accounts by means of a second step, such as an OTP or email verification. Also, even if a trader has their password compromised, the verification process protects against unauthorised entry to the user's account.

• Secure API

API keys are encrypted and only allow for trading. Since there is no ability to withdraw funds using an API key, the user’s funds are safe. API keys are changed regularly for added security.

• Fraud Detection

The fraud detection system monitors for any unusual trading patterns, abnormal activity on a user’s account, and automated bot activities and raises alerts or blocks the suspicious activity immediately, which helps maintain a secure trading environment.

• DDOS and Firewalls

The sophisticated DDOS filtration systems maintain the ability for traders to conduct their trades even during peak trading times when the market is active. Firewalls continually monitor for and block malicious traffic, enabling users to trade effectively during periods of high activity.

Why Choose Fourcrypt for Crypto Copy Trading Software Development?

Fourcrypt provides high-quality crypto exchange software development services to companies that offer their trading services to traders and brokers. This platform has been built using an enterprise-level architecture designed to enable users to further develop their presence within the platform without compromising their own level of security.

Our team has provided the necessary resources and development for the full spectrum of engineering, as well as our continued commitment to the availability of our customers, to maintain your position in the ever-growing marketplace.

If you are looking to develop a crypto copy trading platform with us, you can get in touch with us today!