In the past, social trading was more likely to refer to wild parties thrown by brokers and traders. Nowadays the phrase refers to a new form of democratized money managers.
If you're looking to get into copy trading we think there's no better place than eToro's social network. To help you find the top traders on their platform we've included a nifty search engine below - check it out and see some of their star performers!
Copy trading platforms allow web-based investors trade based on the information provided by others. The social element comes from copying the trades of other traders, who may be professionals or amateurs. If you choose your traders well you can profit from the successful trades they make.
Usually when you copy a trader you set an amount to invest in their strategies. Some networks limit this amount to a fixed percentage of your capital, to help avoid a wipeout should a trader lose. Other systems offer email or phone notifications giving you more control.
The main difference between social or copy trading and 'mirror' trading is that the signals are from fellow humans. Mirror trading is automatic trading based on signals created by algorithms or 'forex robots'. As well as being able to copy trades, a major benefit of these social networks is the ability to discuss the markets. You can follow traders without copying them. It's also one of the biggest trading network for both copiers and investors.
There is a focus on the networking side of copying over highlighting strategies. Etoro has recently made efforts to improve its 'People Search'. This makes it easier to find traders suited to long term gains rather than highlighting riskier short term profits. It's simple to open a demo account and get a feel for the follower system before investing real money.
Tradeo and Ayondo are two more popular social trading networks. Of the two we found Ayondo's trader search the most in-depth, with real world risk metrics that go far beyond etoro's. Tradeo has a slick interface but it appears to be more geared towards the 'get rich quick' mindset.
This implies a risk level more akin to gambling than trading. ZuluTrade is another option, though less accessible for beginners. ZuluTrade provides a complete copy trading feature and is compatible with major brokers. This allows you to mirror trades using the broker of your choice. Finally there is SignalTrader, which offers automated mirror trading across a range of instruments. You can trade in different markets including forex, stocks, commodities, and bonds.
It's not just a hands-off trading opportunity for people with more money than time. There are significant advantages for experienced or professional traders. Most trading networks are aware their advanced traders are one of their biggest assets. As a result, Gurus with a large following are treated well by the brokers. Tradeo offers nothing, but Zulutrade will offer signal providers 0.
The social trade revolution doesn't necessarily increase your odds of becoming richer. It all boils down to following the right people and trading the right markets. It's not enough to just see a high profitability rating on a trader for you to entrust your hard-earned money at their hands.
Know how they trade and what risk management strategies they practice. A trader that gets lucky a few times and manages to triple their account in days can be a bad bet for the long run and vice versa. Use hard numbers that can be found on the Performance section of most trading platforms. They provide a graphic way of displaying key performance metrics. These including the average pips won, max trades open per day or week, and the account's drawdown.
Try to distribute your available capital into different financial assets and professional traders. This gives you a higher chance of making money in social trading by capping risk and capitalizing on different price movements.
The CFD brokers keep innovating, and it wasn't long before someone decided to find a third way between manual trading and copy trading. For those who wish to benefit from the insights of a social trading network but still maintain control of their own capital and trading style, crowd trading offers an interesting alternative.
The premise is simple: This allows you to see how other traders are feeling about the current pricing and which way the market might move, allowing you to take a position for or against the mood. It is worth exploring what the sentiment analysis of each platform is based on - for this to be effective a larger sample size is essential.
Ideally this should include institutional investors as well as retail traders. Your capital is at risk. The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. This website is provided for informational purposes only and in no way constitutes financial advice. A featured listing does not constitute a recommendation or endorsement. Company was established to provide global traders a deep and insightful source of information on forex trading, its key strategies and indicators.
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Skip to main content. Find the top traders to follow on Etoro If you're looking to get into copy trading we think there's no better place than eToro's social network. Featured Brokers IQOption review.
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Its mission is to Social networking sites are a great way to follow and connect with family, friends, entertainers, and to stay updated on news events. The leading Social Trading platform with 4. Generous Cashback Rewards for every trade Leverage the wisdom of the crowds to inform your positions Fast, simple signup.More...