Social trading involves the sharing of strategies among Forex traders, thereby allowing Forex traders to learn from one another. Thanks to social trading, it is also possible for Forex traders to share trade concepts among themselves and much more. This way, a beginner in Forex trading can easily understand Forex trading ideas that can transform them into a more profitable trader.
The beginner trader can make more progress by participating in social trading than when they try to grow on their own and alone.
Social trading has to do with using the experiences and knowledge of other more experienced Forex traders to make a trading decision in your own trading. A beginner in Forex trading can also use the experience of these other Forex traders to learn how to become a better trader.
It is a normal practice for the trader to first investigate the past performance of the experienced trader before following the trades posted by that experienced trader. The past history will help to determine if that experienced trader is worth following or not.
Instead of just following the trading decisions of the experienced traders blindly, the investors can also use the said trading decisions to assess their own trading decisions and judge their verity.
Social trading allows an investor to make some cool money from Forex trading even without having any knowledge whatsoever about Forex trading. Some may think that social trading is only for those who know very little about Forex trading and cannot develop their own trading strategies. This is far from the truth, however.
Studies show that both new and old traders do take part in social trading. While the new traders see it as an opportunity to make money without having much knowledge about Forex trading, the old traders, on the other hand, use the opportunity to learn new trading tricks and strategies from more experienced traders.
So, both classes of traders do benefit from social trading. Social trading is a system of trading in which other investors or traders copy the trades of other more experienced traders. The investor copying the trade will make a profit when the experienced trader does and will also record a loss when the reverse happens.
Social trading has so many benefits but it is unfortunate that some Forex traders are not aware of these benefits. Be that as it may, many more Forex traders are realizing what they have been missing all these while by not paying attention to social trading.
As a result, social trading is getting more popular by the day. In this section, we will consider some of the points that have increased the popularity of social trading over the years.
Many beginner traders find this to be too good to be true and they just cannot resist the temptation of making free money from Forex trading via copy trading.
The broker accepts UK traders and it is regulated by the FCA, which is the acronym for Financial Conduct Authority. The company is equally regulated in Australia via the Australian Securities and Investment Commission (ASIC). As a result, it is safe for Australian Forex traders.
Traders from all other countries are served by a company in Cyprus, which is regulated by the Cyprus Securities and Exchange Commission (CySEC).
Regulated PlatformVariety of CoinsAvailable via App
when trading CFDs with this provider
There are several social trading platforms out there today and they all claim to be the best. However, you should take the time to properly inspect them before you register with any of them. In the remaining part of this write-up, we will enlighten you about how to make the right choice among the series of brokers that feature social trading out there today.
It will not be a bad idea to be a social trader yourself and have other copy your trade. If you have a good Forex trading strategy that has proved to be profitable over a protracted period of time, then you can qualify to set up a social trading service. We will enlighten you in this section about how to do that.
Go only for that particular platform that has all the features you desire in a Forex broker offering social trading. You will need to create an account the same you open a Forex trading account. Bear in mind that most brokers do not allow the use of a demo account for the service.
Anyone that copies your trades will record profit when you do and vice versa. The entire process differs from one person to another. However, the difference is not much at all.
There are different types of social trading accounts out there and you must carefully choose before you set up one. The actual market on which you are trading can determine the type to go for when setting up an account. The various types are highlighted below:
The tips provided below are especially for those who want to copy someone else’s account; that is, the investors and traders that can be categorized as copiers.
Before you start copying the trades of another Forex trader via social trading, you need to first determine what your trading goals are. This will help prevent confusion or overtrading, as well as, help you to keep a lid on emotions that usually prevail when trading Forex with real money.
You should have a plan before you start copying trades. Proper planning will help you to properly refine the process as you proceed. You will equally be able to pick a trader that makes you feel comfortable.
It is in your best interest to properly filter each of the traders before you start copying the trades from that trader. The filtering will help you to select only the best among the traders for copying. You should only go for the most optimal Forex trader to copy and not just anyone.
This will maximize your opportunity to make a profit. Consider the risk appetite of the trader and check if the returns are always more than the risk. Do not forget to find out how consistent the Forex trader is also.
You will find these parameters to be helpful in making the right choice among the many Forex traders that offer their trades for copying. These parameters will help you to make the right decisions when choosing an account to copy.
The trader you want to copy must be one that makes a profit consistently. You should steer clear of any of these traders that lack consistency. You should also determine the level of performance before you pitch your tent with any of the Forex traders before you start copying their accounts; it will keep you on the safer side.
Not all high performances are reliable. It is unfortunate that some high performances may be out of sheer luck. Consequently, you should consider more than just high performance when determining the right Forex trader to copy.
This is to say that consistency is more important than high performance when selecting the right Forex trader for copying. You should find out if the high performance is consistent or not. In fact, it is better to choose a consistent low performance in place of an inconsistent high performance.
This is to say that a trader that can only generate a 25% increase in account balance form about 300 trades taken over a year is far better than a trader that generates 40% from 2 trades within a week. This is because there is no assurance that such a huge return will be repeated over and again.
When copying another trader, it is in your best interest to place limitations on your account. This will help to limit how much risk your account is exposed to. It is not in your best interest to put all of your account balance in the care of a single trader.
That will amount to putting all your eggs in a basket, which is not a good investment decision. If the trader is a total stranger and you do not have complete knowledge of the trustworthy nature of this trader, then allowing then a 100% access to your account will not be the best idea.
When placing the said limitation on your account, you should not allow the trader access to up to 50% of your account balance.
The tips provided below are focused on those who provide their accounts to be copied, which are the popular investors and traders that own the copied account.
There are so many Forex trading platforms out there and many of them claim to be reliable for social trading. However, you should do your due diligence when choosing a Forex broker to register a social trading account lest you regret your choice.
Some Forex brokers provide helpful and intuitive tools that make social trading more interesting and convenient for the owner of the copied account. Some are ever willing to provide extra assistance that will make the setup process go hitch-free.
Some may even provide monetary incentives to the owner of the copied account. These are some of the very important things to consider when choosing a platform to register your copied account.
After setting up your copied account on a reliable broker offering social trading, it is time to apply the right strategy that will help improve your trust level among your followers.
Approaching the market in a unique way will see to it that you can get more copiers for your account. You can win them over by giving them the impression that you are different from all others.
You should not be in a hurry to make a huge profit overnight. You should rather be more focused on being consistent and you can win the trust of the copiers this way.
Many of them prefer a consistent trader to one that generates high results within a short period. It is better to start small and aim higher gradually.
It is good to have others copying your trades. It is a good way to earn extra income. However, you should avoid rushing the market as this can lead to avoidable mistakes that can erode any confidence that the copiers have in you.
It is possible to make money from social trading. The tips below will help you to make the desired regularly profit from social trading.
For all you know, the high performance may be as a result of luck and not due to the reliability of the Forex trading strategy used by the copied account. A consistent copied account may not make a huge profit over a short period, but such an occult can generate profit over a very long time.
It is better to opt for those copied accounts that had been generating consistent profits for months or years so that your Forex account can be in safe hands.
But you need to read reviews about them to know which of them can be trusted. When reading these reviews, it is better to visit neutral sources of information so that you can get reliable details about tat broker.
The details given above must have taught you a thing or two about social trading. You would have learned about how to choose the right copied account and how to set up your own copied account.
You should take every detail provided above very seriously as this will help you to make the most of your social trading experience. Not only beginners in Forex trading can benefit from social trading.
Even a seasoned Forex trader can still learn a thing or two about Forex trading via social trading. Do not forget that the Forex market is dynamic and you should be on the lookout for new ways to do things so that you can be consistently profitable in Forex trading.
Regulated PlatformVariety of CoinsAvailable via App
when trading CFDs with this provider
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