The Basics of Social Trading
Forex social trading is a social environment for active Forex traders to interact in real time. Forex social trading provides substantial benefits of sharing knowledge with others. It allows online trading by traders thanks to the help of others by comparing and copying their traders, strategies, and techniques. With the top social trading platforms that are offered today, beginner traders can follow expert traders while those more experienced can improve their trading by selecting and signing up to one of the many Forex social trading platforms that are available in the Forex market today.
Social trading is a trend that’s been around for some years. However, it has gained in its popularity of late because of the increased trading activity and the need of Forex traders to depend on the experience and knowledge of the more savvy investors. It is attractive to everyone the knowledge that they can connect with other Forex traders using the network.
Before the arrival of social trading, investors had to depend on fundamental or technical analysis to develop and form their investment decisions. By using Forex social trading investors and traders can integrate social indicators from trading data-feeds of other traders with their investment decision-making process.
Top Social Trading Platforms
The top social trading platforms provide a place for traders to interact with other, monitor their trades, and reach a decision as to whether they are worth duplicating. By copying trades, the traders can learn which strategies work and which ones don’t work.
Also, many of the top social trading platforms include copy-trading. It is sometimes referred to as auto-trading, with capabilities in their social platforms where investors can copy or mirror the trades automatically from the other traders on the networks in their own trading account. Forex social trading brokers display on a real-time listing of other traders’ activities and achievements directly on their websites to enhance the success of a trader.
There are some social trading platforms, like the eToro, which let a trader select to follow a particular master trader who already has an extensive list of copiers. When the master trader opens a new position, all his followers do the same. This then widens the trading opportunities for the trader.
Selecting the Best Social Trading Platform
Since the basis of social trading platforms is the ability to follow and copy as many traders as is possible worldwide, the top social trading platforms are those that offer the largest and the most attractive social trading community of Forex traders. Also included would be the Forex brokers that provide the most efficient copy trading capabilities. This would allow the traders to place more trades at any give time. Finally, the ability for synchronizing order executions between a few trading accounts (between a signal provider and followers) is also a feature that can push a social trader broker to the top of the rankings.
How to Choose the Best Social Trading Platform
Because there’s so much competition in the social trading market as well as having countless platforms to choose from, it can be difficult to know which option will work best for you. Here are a few things we suggest keeping in mind before you decide on the right platform for your social trading:
Use a regulated social trading platform. The regulatory body develops rules and services protect the integrity of the market, as well as traders, and investors. Because of possible safety concerns, accounts should be exclusively opened with regulated brokers.
While selecting a social trading platform, it’s possible just to concentrate on one type of asset if you choose. However, you should keep in mind there are many types of investment alternatives offered as well, such as Forex, Stocks, CFDs, ETFs, or trading in options or futures.
The best brokerages can provide a huge selection of currency pairs. However, it is most important is that they provide the variety of pairs that interest you. While there are many currencies available for trading, there are only a few get the majority of the attention, and as the result, trade with the highest liquidity.
The trading platform is the investor’s portal to the markets. So with that in mind, look for a platform that is easy to use, straightforward and offers an advanced collection of analytical and technical and tools, to enhance your trading experience. If you are going to be trading on-the-go, look for a social trading platform with an excellent mobile trading app. It is best to know what your platform requirements are before signing up and investing funds.
For more information on selecting the right trading platform for you, please see our tutorial: What To Look For When Choosing A Trading Platform
Social trading happens 24 hrs a day, so customer support should be available at all times. You’ll want to be able to speak with a live support person. The representative’s ability to answer your questions regarding spreads and leverage, as well as company details is very telling. The details of a good social trading platform should be out in the open for everyone to see, either online or otherwise.
Your ideal platform for social trading should be able to offer either multiple account options or provide you an element of customizability. Look for a social trading platform that offers competitive spreads and easy deposits/withdrawals.
Fees & Interest
Buying, selling and trading online costs money. However, unlike buying stocks or bonds, brokers usually charge a percentage. You may consider looking for an online broker that charges a flat rate fee instead of the percentage model.
An online trading platform should provide you with all the necessary information about the interest charged when you take leverage. Although there isn’t a huge difference in the interest rates between online stock brokers, it is something to be aware of when choosing a specific broker.
For more information on selecting the right brokerage or trading platform, please see our tutorial: 6 Critical Things to Consider When Choosing a Broker.