Copy trading: An increasingly popular form of investing - is it worth the risk?

Copy trading is a fast-growing trend, where investors discuss portfolios and markets, potentially influencing investment decisions. Copy trading takes this a step further, as investors mirror the portfolio and trades of another user of the platform.

In this episode of Which? Money, senior researcher Megan Thomas explains how copy trading works, how risky it can be, and how certain trading platforms are becoming destinations for those who think it’s an easy way to increase the value of an investment portfolio.

Megan shares the result of her experiment, which saw novice investors try out social trading and copy trading platforms for the first time, to track how drawn users were to investors who already had tens of thousands of other investors following their every move.

Plus, Simon Weidenholzer, professor of economics at the University of Essex, talks us through the history of the trend, and describes how giving people the option to directly copy others can lead to a significant increase in risk taking.

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