Social Trading Platforms

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. New social networks have sprung up to offer financial pundits the technology to invest in the markets.

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. It combines discussion and analysis with some innovative options for traders, allowing you to either invest in promising individuals or CopyFunds™ which group the most active or successful traders to allow you to spread your risk between a number of rising stars. 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!

 

The Best Social Trading Brokers + Trading Platforms

Rating Bonus Description Minimum Deposit Regulation Visit
5
Verification Bonus
$50
+40% Deposit Bonus
  • Generous Cashback Rewards for every trade
  • Leverage the wisdom of the crowds to inform your positions
  • Fast, simple signup

$250

CySec

Visit Broker
Review
5
  • The leading Social Trading platform with 4.5m traders
  • Follow other traders or be a leader and earn
  • Personal service and VIP perks

$200

FCA, +

Visit Broker
Review
4


  • Social Trading, Spread Betting and CFDs
  • Great statistics on traders to follow
  • Authorised by the Financial Conduct Authority (FCA)

$100

FCA

Visit Broker
Review

What is a Social Trading Platform?

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.

By taking time to find traders who fit your own goals and profile of risk you can outsource your own trading. 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. 

Once you start copying a trader's strategies the platform will automatically open a position each time your guru does. 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. By networking, sharing news and swapping tips on the markets you can learn and refine your own strategy.

 

Best Copy Trading Sites

There's a broad choice of trading platforms that focus on social networking and copying. 

eToro is one of the most visible and highly trusted platforms in the category. 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. Tradeo's 'trader search' highlights the traders making unrealistic gains of 6,000% or more. 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. 

Making money as a Guru leading followers

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. By providing your own signals and allowing people to copy your trades you can earn perks and hard cash.

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.

eToro offers its top Popular Investors a 100% spread rebate on their trades, as well as a monthly cash sum. This can be as much as 2% of the funds invested by their followers. 

Ayondo's Top Trader program offers the chance to earn up to $5 per lot traded by your followers. Tradeo offers nothing, but Zulutrade will offer signal providers 0.5 pips per lot traded in profitable months. This will vary according to the spread and currency, but the average earnings are $4USD per lot.

Tips For Making Money On Social Trading Networks

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. It's also wise to diversify between instruments like binary options, indicies, commodities and stocks.

Crowd Trading: An alternative to following?

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: by monitoring the market flows and the postiions others are taking, its possible to glean an insight to what might happen next. Platforms such as Trade360and Tradeo allow you to monitor the 'market sentiment'. 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.

English

Related Articles

  • Founded in 2007, eToro is the world’s leading social trading platform. During its inception, eToro’s founders set out to create an online trading...
  • Intuitive trading software is becoming very popular, especially in the Forex world. Autotrader Forex brokers are websites that utilize software that...
  • Trade360 was founded in 2013 as the world’s first ever CrowdTrading platform. Based on the principle of ‘the wisdom of crowds’, the company’s Live...
  • Ayondo is for active traders who are looking to develop winning trading strategies in the Contracts for Difference (CFD) market. 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. There are also...

Featured Brokers

 
 

Risk Warning

 

Your capital is at risk. Trading in Forex and Contracts for Difference (CFDs) is highly speculative and involves a significant risk of loss.  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.

About ForexTrading.Company

Forex Trading.Company was established to provide global traders a deep and insightful source of information on forex trading, its key strategies and indicators. With guides for everyone from beginner traders in Bangladesh to advanced strategists in Hong Kong we want the world trading community to benefit from our in-depth broker reviews, features, and commentary. We list the world's top regulated and authorised brokers suitable for a global audience.

We aim to think global, act local with our website, so that whether you're in Asia, Europe or Africa you can gain from our content on the world's biggest market.

About Us & Contact