Whether you’re a new trader looking to make some extra profit from the online markets, or an experienced financial trader with decades of experience under your belt, social trading can help you. In this guide we have reviewed the top social trading platforms for 2019 and found that ZuluTrade is by far the best trading platforms out there. Getting started with them is fast, easy, and free. Read on to find out how to get started.
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What is Social Trading? Understanding the Online Trading Phenomenon
Social trading is not entirely new. In fact, the idea behind social trading has been around for decades. However, the mix of online financial markets and social networks has birthed an entirely new wave of possibilities where platforms can allow for facilitated ‘copy trading’. Exchanges such as ZuluTrade enable the possibility for social trading, and external third-party sites allow for the sharing of strategies, ideas, trade concepts, and much more, which enables any beginner trader to understand ideas and get the hang of things a lot faster than they otherwise would be able to.
This guide will dial in on Social Trading, conducted on a variety of financial markets.
Social trading is a concept; it involves using other traders and investors and their decisions as a base model in making decisions in your own investing or trading techniques. As a result, it is more of a mindset, which can be translated into a process for both new and veteran traders and investors.
Understanding what social trading is isn’t difficult. It is simply looking at one trade, completed by user 1, and using that information on judgment for one’s own trade. The process is commonly cross-referenced as ‘copy trading’ as well. An example can be used to understand the process even deeper. Take the following into consideration:
User 1 sees a profitable opportunity in buying Apple (AAPL) stock. User 1 links his account to a social trading platform that posts his trades when they’re made. User 1 buys Apple stock, and the trade is immediately posted to the social trading platform. User 2, who is an avid user of the platform sees that User 1 has made many profitable trades in the recent past and decides to also buy Apple stock. This process is known as copy trading, otherwise referenced as social trading.
User 1 and User 2 have both successfully engaged in social trading by doing this. Why is this important? There are multiple reasons for this, namely, because if you’re not knowledgable in trading, or a beginner, you can immediately get guidance in your trades from other more experienced people. Social trading is done specifically different using various terms on every platform, however, fundamentally the core process is traditionally the same on each platform.
Social trading contains a few pillars to it as well. You can create an online account that other users can follow, and you can use this account to share different ideas, strategies, and more. You have the option to build a following; it enables you to partake and interact with a community of like-minded traders and investors that are also trying to maintain profits in the markets. The concept of ‘social trading’ is really a multi-structured facet, one that we’re here to help you understand.
1. eToro – Market leading broker built on social trading innovation
There’s no doubt eToro is the best social trading platform on the market. Founded in 2007, eToro boasts over 10 million users and allows you to purchase the underlying assets crypto and stick, as well as trade them as CFDs with leverage.
eToro is best known for its CopyTrader feature. This allows you to follow top performing traders and copy their trades automatically, so that when they trade, you trade. This is an excellent way for beginners to start trading, and it’s also ideal for more experienced traders looking to learn new strategies and strengthen their portfolio.
eToro’s 50 top traders for 2019 saw an average yearly profit of 29.1%, and the CopyTrader tool allows you to copy all of the best investors’ traders. When looking for traders to copy, you can check out the Editor’s Choice section, where you’ll find popular investors that are worth following.
You can also use the search and filter tool to find traders that deal in your area of interest. You can filter traders by market, return, risk more and more. There are no management costs or extra hidden charges of using the CopyTrader, so all users can try it out.
Another unique aspect of the eToro platform is the social news feed. This allows you to keep up to date with the traders and financial instruments you’re interested in, interact with other members of the eToro community and open discussions, discuss strategies and learn new things.
You can post your own updates and tag people or instruments, share posts on your feed and comment on other community members’ posts, just like on a social media network. Gradually, your feed will become tailored to your interests.
On top of its social trading features, eToro has several other qualities that put it above the competition. These include a crypto wallet where you can securely store your coins, 24/7 customer support Monday to Friday, and a wide range of assets include crypto, stocks, forex, commodities, ETFs and bonds. You can trade over 800 stocks and more than 15 cryptocurrencies on eToro.
eToro is regulated by several financial authorities, including CySEC, FCA and ASIC. EToro is also available in the US, currently offering crypto trading, and US users will be able to buy stocks on the platform later this year. If you want to learn more about it, check out full eToro review.
- Excellent CopyTrader tool
- Trading community feed
- Crypto trading available to US users
- $5,000 account minimum for CopyPortfolios
2. AvaTrade Mirror Trader – Offers three types of copy trading
AvaTrade is another online trading platform that allows users to copy trades through its Mirror Trader platform. The AvaTrader Mirror Trader offers a variety of financial instruments, including forex, cryptocurrencies, commodities, CFDs and stocks.
One of the beneficial aspects of the AvaTrade Mirror Trader is that it offers three copy trading options - automatic copy trading, semi-automatic copy trading and manual copy trading. With automatic trading, you select traders that match your trading preferences and risk level and then the Mirror Trader does the rest.
With semi-automatic trading, you can view all the positions taken by your selected trader in real time, and then choose the positions you wish to copy. After the trades are copied, you’re able to track them and close them at any time. There’s also the option to let them run and close automatically when the followed trader closes their trade.
Finally, manual trading is essentially the same as regular trading, just with access to the knowledge and strategies of high performing traders. You can use all the information available to develop your trading strategies and copy select trades. AvaTrade users also copy algo trading strategies that are developed by experienced traders and developers.
The option to choose between these different copy trading options is definitely a nice benefit of using the AvaTrade Mirror Trader. However, as an overall social trading platform, it lags a little behind eToro.
- Automatic, semi-automatic and manual trading
- Helpful education tools
- 24/7 crypto trading
- Customer support can have slow response times
- Not US friendly
3. NAGA– Impressive social platform with community features
NAGA is an interactive social trading platform that offers all the main financial assets across several platforms, including a mobile app. There’s a cryptocurrency exchange and a crypto wallet, as well as some impressive social trading tools.
One of the key functions is the auto trading feature, which allows you to learn from top traders and replicate their moves in the markets. You can check out the stats and then set the exact investment amount for each traders.
If you’re a high performing trader at NAGA, you can get paid bonuses when your trades are copied. Traders have user profile pages that summarizes their activity, and you can even set trading objectives and achievement goals to give you something to aim for.
Another social feature of NAGA is the news feed, where you can get exclusive market insights, news and create custom community posts. You can also engage with other traders’ posts and learn new things along the way.
- Straightforward trade copying tool
- Bonuses for copied trades
- Cryptocurrency wallet
- Not US friendly
- restricted leverage if you're not a professional client
what’s the number one platform to get started with social trading??
Hello liam76. Thank you for getting in touch. We consider eToro to be the number one platform for social trading. Like all social trading platforms, it allows you to view the trades placed by the top investors active on the platform and you can place the same trades. It is a great opportunity for inexperienced traders to start developing their own trading strategy. Other than this feature, eToro is a fully regulated and trusted exchange, offering secure and efficient services. Its sign up process is very quick and easy, it offers a great variety of assets that you can choose from and it offers PayPal, among others, as a payment method to improve safety during transactions. Good luck!
is there some strategy to make the most out of my social trading experience?
Hello rebe51. Thank you for your question. It’s still online trading, but the kind of strategy is different, because you no longer have to choose what asset to invest on, but the trader to invest on. After all, once you select the trader to copy, the system will place the same trades that they place. To select the right trader, you should look at their past successes to see if they have potential for profitable trades in the future. Make sure you choose how much you want to invest for each trade, and start off with small amounts. This is pretty much all you can do in terms of strategy. Best of luck!
do you recommend any specific markets to copy trades?? I really want to give social trading a go and want to make sure I get it right!
Hello alia98. Thank you for your question. The biggest market for social trading is the Forex market at the moment and that is probably because a lot of top investors trade forex considering that the market currently has the largest overall volume. Largest volume means more liquidity and more liquidity means fasted execution of trades, which is why forex trading is so popular and why top investors trade with it and why inexperienced investors copy their trades. Keep in mind, that this does not mean we recommend trading forex, but simply that this is what most traders do. I hope that will help you in your decision.
what kind of social trading accounts are there??
Hello stan31. Thank you for getting in touch. There are quite a few social trading account types that you can choose from, such as Forex standard and mini accounts, CFD accounts, copy accounts and copied accounts. As the name suggests, the first two are used for forex trading. The difference between them is that while for the first one lots are traded for $100,000 each, for the second one they are traded for $10,000. CFD accounts focus on CFD trading and then there are copy accounts and copied accounts. In the first one, you are merely copying the trades of other traders, whereas if you have a copied account your movements are visible and can be copied. These accounts are rewarded based on how many people copy their trades.
what kind of things should I look for to choose the right social trading platform for me??
Hello este05. Thank you for your question. The things you should look for more or less depend on what you are looking for in a broker. The first thing to look for is platforms that have the social trading option, because there are not many out there that do. Once that is done, we recommend choosing one that is fully regulated by agencies like CySEC, ASIC or FCA just to make sure that the broker’s activities are being monitored. The rest pretty much depends on your preferences. You will have to take into consideration whether you are looking for a broker with low fees, a good asset variety, many payment options, low initial deposits and so on. It is very rare to find a broker offering all these things, but we believe eToro to be the one getting the closest to that.
Hello there. I’ve been thinking about signing up on Ameritrade but I am afraid that my account will get hacked. What should I do?
Hello Christopher. Thanks for getting in touch with us. First of all, rest assured that Ameritrade is an excellent platform that has adopted some great security measures to prevent that from happening. What you can do, just to be sure, is to go on the Ameritrade website and have a look through their legal section or their terms and conditions to see if they have a refund policy in case of hacking attacks. If not, you can simply contact customer support and ask if they have one. If they do, then you can be sure to get your money back in the unlikely event that your account gets hacked. Good luck!
Does social trading mean that I will be able to lower the risks and make quicker profits?
Hello Nathan. Thank you for your question. I am afraid I cannot give you a definite answer though. The thing is that online trading is a risky activity for anyone, even professional users. That means that a top investor has the same possibilities of getting a trade wrong as you do. Of course, it is more likely that the trader has done some accurate research first, but the stock market is so unpredictable that research is not always enough to guarantee profits. So the answer is, you may see quicker profits because you are not necessarily required to do all the hard work of market analysis, but the risks remain. I hope that helps.
Hello. Thank you for this review. Finding some accurate information on what social trading is and what it’s useful for was not easy. Good job! Do I need a specific amount of money to be able to access the social trading space?
Hello Daniel. Thank you for the nice words, they are very much appreciated. As for your question, you are not required to pay any specific additional amount to be able to access the social trading space, at least when it comes to the brokers we have reviewed so far. The only amount you should be aware of is the minimum deposit required set by the broker you want to sign up on. For example for eToro, you have to pay at least $250 to be able to sign up and access the social trading area. The same goes for AvaTrade if you pay via credit or debit card and $500 if you pay via WireTransfer. I hope that answers your question.
Hello. I’ve never traded online before and I have just created an account on eToro. Can someone explain how to find the traders and trades to copy?
Hello Stephanie. Thank you for getting in touch. Once you’ve signed up on eToro and deposited your funds in it, you will find a “copy people” tab that you can click on. Once you do that, you will see a list of traders and their portfolios showing how much risk they take, how much their return has been and how many copiers they have. If you click on “copy trades”, you will be able to see all their trades and their past performance. If you click on “copy”, you will place the same trade as the trader you selected and you will have the option of deciding how much you want to invest. Beware though, once you do that, the next trades will be placed automatically to copy that trader. I hope that’s clear. Good luck!
What does social trading mean?
Hello Carl. Thank you for your question. The idea behind social trading is to speed up beginners’ learning process when it comes to online trading. It basically allows you to view the trades placed by professional traders so that you have the option of placing the same trade. It is a way for newbies to begin developing a trading strategy by taking inspiration from the best traders around. This also means that you do not have to spend nearly as much time doing research on what is the most profitable investment to make because you can simply do what investors with more experience than you are doing. eToro is an example of a platform that allows social trading. Feel free to check out our eToro review.