Can You Build a Diversified Portfolio Using Only Copy Trading Strategies?

In traditional investing, diversification means spreading your capital across different assets to reduce risk. But in the world of copy trading, many new traders wonder:

“Can I build a diversified portfolio just by following other traders?”

The short answer is: yes — if done correctly.

Modern copy trading platforms like SMARTT have evolved far beyond “one-trader mirrors.” Today, you can build a carefully structured portfolio by selecting traders with different strategies, timeframes, assets, and risk profiles.

In this article, we’ll break down how diversification works in copy trading, what to look for in trader selection, and how SMARTT helps you implement this model with ease, even if you’re new to the market.

 

What Does Diversification Mean in Copy Trading?

When people think of diversification, they usually picture:

•         Multiple asset classes (stocks, gold, crypto, etc.)

•         Different sectors or regions (tech vs. energy, US vs. Asia)

•         Blending high-risk and low-risk investments

In copy trading, you achieve diversification not through asset selection alone, but by choosing a variety of trading strategies and trader profiles. This includes:

•         Scalpers, swing traders, and long-term trend followers

•         Traders who specialize in gold, forex, or indices

•         High-frequency traders vs. low-volume, high-accuracy traders

•         Different risk levels and drawdown histories

Instead of managing multiple assets directly, you let a curated group of traders implement different tactics for you, and you manage the allocation across them.

 

Benefits of a Diversified Copy Trading Portfolio

Building a diversified portfolio through copy trading offers powerful benefits:

 

1. Reduced Risk of Total Loss

If one trader underperforms, others may compensate, protecting your capital from being tied to a single strategy or signal source.

 

2. Exposure to Multiple Market Conditions

Different strategies work in different environments. For example:

•         Trend-following systems thrive in trending markets

•         Range-based scalpers excel in sideways price action

•         Macro traders do well around economic events

Diversification lets you stay active in any condition.

 

3. Emotional Detachment

When you rely on multiple systems or traders instead of putting faith in just one, you avoid the anxiety that comes from watching a single P&L swing wildly.

 

4. Smoother Growth Curve

Even if some months are less profitable, a diversified portfolio tends to smooth out volatility and grow more predictably over time.

 

How to Build a Diversified Copy Trading Portfolio

Let’s walk through the key steps to creating a solid, well-balanced portfolio using copy trading strategies.

 

1. Choose the Right Platform

First, you need a platform that allows:

•         Access to multiple verified traders

•         Visibility into key performance metrics

•         The ability to allocate specific capital to each trader

•         Built-in risk controls (equity limits, stop-outs, etc.)

SMARTT is specifically built for this. With access to 200+ traders, detailed analytics, and automated execution, it enables beginners to build professional-level portfolios without complexity.

👉 Start exploring options on the Copy Trading page.

 

2. Select Traders Based on Strategy and Behavior

The heart of your portfolio is the mix of traders you follow. Look for diversity in:

•         Trading style (scalping, swing, long-term)

•         Asset focus (gold, forex pairs, indices)

•         Average trade duration

•         Risk appetite (measured by drawdown)

•         Monthly return consistency

Example composition:

 

 

This approach mimics a balanced investment portfolio, without owning the underlying assets directly.

 

3. Allocate Capital Intelligently

Capital allocation is the core of portfolio risk management. SMARTT lets you set exact dollar amounts per trader or allocate by percentage.

General rules of thumb:

•         Don’t allocate more than 40% to any one trader

•         Use a minimum of 3–4 traders for balance

•         Allocate slightly more to consistent low-risk profiles

•         Consider rebalancing monthly based on performance

SMARTT’s interface allows you to monitor allocation stats at a glance, adjust in seconds, and track portfolio-level equity curves.

 

4. Use Built-In Risk Controls

Copy trading still carries risk, especially if not controlled. On SMARTT, you can activate:

•         Account-wide daily or weekly stop-out

•         Per-trader loss limits

•         Auto-disable if the trader deviates from normal behavior

•         Maximum allowed drawdown settings

This ensures that even with diversification, no single trader can cause unrecoverable damage.

👉 Details on platform protection and broker safety are available on the Broker Licenses page.

 

5. Monitor and Optimize

Diversification doesn’t mean “set and forget.” Instead, review your portfolio performance every few weeks:

•         Replace underperformers

•         Scale into consistent strategies

•         Adjust capital weighting gradually

•         Check correlation between traders’ results — if all move the same, you may not be as diversified as you think

SMARTT makes this process easy with daily stats, trader dashboards, and integrated risk monitoring.

 

How SMARTT Makes Diversification Easy for Beginners

Most beginners don’t have the tools, experience, or confidence to manage multiple strategies manually. SMARTT solves this by:

•         Giving access to a curated pool of top traders

•         Letting users customize allocation and risk per trader

•         Offering full automation of execution — no manual orders

•         Providing rich, intuitive dashboards for transparency

•         Supporting multiple brokers, including regulated partners like Exness and AvaTrade

It’s a smart gateway for building a true multi-strategy portfolio, even with modest capital and zero technical skills.

 

Final Thoughts

Yes — you absolutely can build a diversified trading portfolio using only copy trading strategies, as long as:

•         You choose a reliable platform with rich data and controls

•         You select a variety of trader profiles with minimal overlap

•         You allocate capital strategically

•         You actively monitor and rebalance when needed

With a platform like SMARTT, diversification through copy trading becomes not only possible, but it becomes structured, scalable, and safe.

Whether you’re starting with $500 or $5,000, diversification is no longer reserved for hedge funds. You can now build it with a few clicks, zero code, and full control.