Social trading is a forex trading strategy that gives less experienced or beginner traders and investors the ability to copy, share, mirror, and replicate the trades and strategies for more experienced traders or experts. A lot of newbies in the forex market find it very difficult to trade or invest in financial instruments like commodities, precious metals, stocks, indices, currencies, and CFDs. The trade of these instruments requires tactical understanding in the use of charting tools, moving trends, and analytical reports. A trader needs to stay up to date with economic news and other factors that may affect the rate of a currency. Those that lack this understanding of how to invest and when to invest find it very difficult in making high returns or profits and end up gathering losses in all rounds hence, social trading.
Social trading is conducted in a social trading network where expert traders share various trading ideas, strategies and trading results. In this network, traders interact with each other, share forex trading related ideas and predict possible market situations in real time. With these, less experienced traders can trade forex with stable trading decisions while setting aside fear and greed. In a social trading platform, all that is required is to identify a successful trader, copy his trading strategies and trade effectively.
Benefits of social trading
Fast access to reliable forex trading information
When a forex trader takes part in social trading, the stress of researching important forex trading news, the time used to conduct effective forex market analysis and following price action analysis chart with all the technical indicators will be eliminated. A social trading platform functions by providing necessary trading information from experts across the globe. In addition, information can be gotten from professional traders in a one on one conversation.
Quick trading skills development
Social trading gives forex traders the ability to harness trading skills faster than expected. Social trading works with the trading strategies of trading experts. This means that any trader can learn how to effectively trade forex quickly and effectively by merely following the instructions provided in a social trading platform.
Earn why you learn
Social trading gives forex traders the ability to learn every aspect of trading the forex market, including the aspect of getting to know the dynamic nature of the market and its ups and downs. In addition to learning how to trade, traders also earn a large amount of money just by copying the trades of experts. With this platform, a trader need not have all the knowledge in the word before making some cash.
Forex trading community
Social trading provides a platform where traders interact with one another, share various beneficial trading ideas and give out important news on how the forex market functions. Here, traders of different skill levels come together for communication purposes, asking trading related questions while answers are being provided by professional traders.
Get access to verified results
Every social trading platform publishes the live/real trading account of professional traders. There are no demo accounts or virtual accounts being portrayed only real and functional trading accounts displaying trading strategies and trading results. This means that forex traders who engage in social trading get access to verified trading results where they can make adequate choices on the strategy that produced the best result and copy it.
Ability to diversify trading risks
In social trading, a forex trader has access to a platform full of different forex trading strategies. This advantage gives them the ability to diversify their trading risk. They can use various trading strategies with the best result thereby eliminating the disadvantage found in relying on one source of strategy.
Social trading brokers
There are a lot of social trading brokers who provide user-friendly and advanced technologies used by forex traders to copy real-time forex trades and signals of more experienced traders. These brokers provide a system by which the signals and strategies of forex trading system providers can be replicated in the trading accounts of forex traders. Examples of these social trading brokers include:
Darwinex
Darwinex is a reliable social trading broker who capitalizes at providing forex traders access to more than one thousand two hundred trader-developed strategies which are traded in form of securities on their trading platform. This brokerage firm allocates funds worth up to four million dollars among successful traders who provide the best performing trading strategies on the platform. Here, the expert's strategy becomes a physical asset which can be bought by an investor and in turn, he/she can include it in a trading portfolio. The value of the underlying asset increases in volume due to earnings generated from the strategy managed by the investor. Darwinex provides forex traders with sophisticated and automated trading risk control tools.
Ayondo
This social trading brokerage firm functions by stimulating the robustness of forex trading strategies provided by expert traders and used/replicated by less experienced traders. The broker provides a good number of professional trading and copying instruments used for the purpose of trading and offers traders an easy environment for the trade of securities. Although Ayondo broker does not permit the interaction of investors with one another, it rewards them by increasing the value of their commission as far as they operate safely, trade with precautions, limit trade risk, and drawdowns.
Tradeo
Being a transparent social trading broker, Tradeo is an online broker with a highly developed social trading platform which offers traders and investors the ability to see the trade orders and trading signals of more experienced traders on a single chart. This broker gives traders the possibility to operate personally in a social way. Its trading platforms give traders the ability to activate the copy trading function on their most preferred trader and replicate signals and strategies automatically. The brokerage firm also provides a demo trading account where the signals and strategies can be tested in other to ascertain the rate of success it may produce. Traders can also test run all available trading platform with the demo account.
eToro
eToro is a social trading platform that gives forex traders the ability to interact with professional traders while following their strategies and copying their trades. This social trading platform includes trading features like News Feed, Copy Trading and demo account for forex traders. These features are being used by forex traders to monitor and manually copy the trades of expert traders and carry out an automatic trade copy on behalf of the traders.
You can find a more comprehensive and up-to-date list of social trading brokers right here.