How do I become an investor in Social Trading?

Forex, Futures, Options and such Derivatives are highly leveraged and carry a large amount of risk and is not suitable for all investors. Please do not trade with more money than you can afford to lose. All content (news, views, analysis, research, trade ideas, commentary, videos or articles) on this website or this website’s subsidiaries does not constitute as “investment advice”. This is where social trading tools appear to be a better alternative, as you do not have to apply fundamental or technical analysis. Copiers are not supposed to have specific financial knowledge. All they have to do is to select a social trader (signal provider) and duplicate his or her trades.

  • Follow traditional trading strategies by diversifying between multiple traders and staying low risk on each trade (1-2% of your trading account value).
  • If a trader consistently underperforms or their strategy no longer aligns with your goals, consider unfollowing them.
  • The social trading market is still remarkably young and ready to explode even further.

It’s important to realize, however, that no copy trading signal providers can guarantee successful returns. Social trading not only allows traders to collaborate, share ideas and approaches, learn from each other, and find powerful professional support. Thanks to modern technologies, it has never been easier to become a “social trader”.

Learning Vs Passive Investing

Collective2 is a US-based automated trading system with over 78,000 members in their community. It doesn’t require any technical or financial background, and the service has been verified as US-friendly by FINRA. Founded in 2015, NAGA is a Fintech company that offers access to traditional financial markets, along with cryptocurrencies and virtual goods. AvaTrade also offers a range of automated trading tools, such as RoboX, Mirror Trader, MQL5 Signal Service, API Trading, and Duplitrade. As you can see, copy trading is just one form of social trading. You see, the wins come quick, but the losses can build even quicker.

is social trading profitable

It’s important to note that not all trading platforms with social features provide copy trading. has been reviewing online forex brokers for over six years, and our reviews are the most cited in the industry. Each year, we collect thousands of data points and publish tens of thousands of words of research.

What’s the Difference Between Social Trading and Copy Trading?

After creating your account, you will analyze the accounts you want to track, and then copy them. In most cases, the whole process can take less than 5 minutes to complete.

is social trading profitable

Copy trading platforms allow users to automatically copy trades in real-time using individually customized account settings and platform tools. People that make their trades available to be copied in real-time are known as signal providers. Once you’ve chosen a signal provider, you’ll need to decide to what degree you want to copy the signal provider, and how much capital to allocate. Most platforms allow traders to easily check out an investor’s portfolio, see their success and failures, and what their specific niche is. It’s crucial to check the trader’s credibility before you decide if you want to follow them.

Starter’s guide for strategy providers

That said, social trading platforms aren’t only for beginners who want to replicate trade ideas. – professional traders can benefit too, as high-performing accounts can charge a fee for traders to view their trades, or earn commission on profitable trades. The often more experienced traders who choose to share their trades can generate additional income by becoming influencers. Most social trading platforms pay traders a bonus based on the number of traders who are following and copying their trades. Social trading simplifies access to financial markets, allowing traders of all levels to exchange strategies and replicate each other’s trades. If you want to start copy trading, your first step will be to choose a copy trading platform.

is social trading profitable

That entrusted trader is accountable for numerous other investors within a given group. In 2010, eToro became among the first platforms that launched a “social trading” option in its software. The main focus of eToro, and later its competitors, was to allow customers to copy experienced traders and view the purchases and results of other clients. It is well known that trading and investing in the financial market are becoming increasingly popular due to simple access, affordable initial deposits, and attractive profits. Nowadays, there are several modern methods designed for traders who either can’t or do not wish to be involved in every part of daily trading. For example, they can use social or copy trading, PAMM, or MAM accounts.

What is an example of copy trading?

Social trading gives traders the unique opportunity to get information about the market from other interested parties. As it is based on collaboration between traders from all over the world, the basis of social trading is social networking. But instead of connecting with your friends and family on platforms like Facebook or Instagram, you can connect with like-minded individuals and exchange ideas, strategies and methods about trading. In addition, it is possible for any novice trader to copy trades from other experienced traders using tools such as eToro. Indeed, eToro, a pioneer in the social trading industry, is on track to go public on a $10 billion deal.

is social trading profitable

Is the trader using a consistent strategy or are their actions all over the place? The World Economic Forum described social trading as a low-cost, sophisticated alternative that allows for maximum control. Automated trading systems are a double-edged sword that carries both pros and cons. They are great for removing the chance of human error, but the lack of human monitoring means there is a higher risk during black swan events. Users appreciate ZuluTrade’s low minimum deposit requirement, especially those who want to give trading a try for the first time.

You can learn about their current trades, their trading strategy and their investment portfolio structure. Beginners should analyze all available performance metrics when deciding whether Tips On How To Invest In Cryptocurrencies to copy a particular signal provider. Understanding a given signal provider’s risk tolerance is just as important as measuring their average profits or their overall results.

is social trading profitable

However, we can also view social trading as the process of using social media to find trading ideas and even lessons. Follow traders with successful winning rates – Examine whether the trader is consistently succeeding. Note that win-rate at least 50% in the win/loss ratio is generally preferred and considered a solid performance. Try a demo account first – Before investing initial capital, especially for newcomers to social trading, register and try a demo account.

It is possible to trade all assets like stocks, cryptocurrencies, and forex provided that they are offered by a broker. In the internet, there are many applications and platforms that promote crowd sharing of financial matters. For instance, there are platforms which allow anyone to predict the next market moves. For decades, people have been participating in discrete mutual groups. In the past, individuals came together to discuss opportunities to invest and pool their funds for investments. Numerous investment clubs all across the planet were founded as early as the beginning of the last century.

For example, let’s say you invest $300 while your potential return is 15%. However, if you earn 15% from the $10,000 investment, your annual profit is $1,500. With an experienced social trader, it is possible to make many times higher profits thanks to profit margins. This is why it is very important to find a successful social trader to follow. Social Trading makes it simpler, as Investors can copy trades made by experienced traders while both earn from profitable trades. With an impressive suite of tools, control over your investments are firmly in the palm of your hand.