what is Social Trading?
it’s a completely transparent way of seeing what other investors are trading. The financial markets are in effect, a product of the wisdom of the crowd. Social trading means you get to see what the most popular trades are, when they are being made and how much is being traded. It’s a way to channel the sentiment of a social community. Of course, this transparency and the scale of the community is limited to the platform you choose.
What does this mean? Simple. You get to see what everyone else in your social trading community is doing. You can discuss the markets with experienced traders, do your own thing or follow the masses.
For investors that are new to trading, it’s an opportunity to learn. For investors that don’t want to trade but want access to the CFD markets for short term transactions, there’s Copy Trading,
Right, now I’ve explained the idea behind social trading – I’ll move on to Copy Trading
OK. So, if you are like me and don’t have much success trading the financial markets, nor the confidence to follow your convictions, help is at hand. It comes in the form of Copy Trading. The concept is fairly straightforward.
Once you open an account with your preferred social trading platform, you’ll be able to find all the transparency I mentioned above. Crucially, you’ll get to meet other traders. You’ll see what markets they are trading, where they are from and what kind of risk level their trading behaviour is rated.
This is where the copy trading comes in. You can search for traders from across the world who match your trading criteria and see what kind of trader following they have built. Having identified like-minded traders, you can follow them and watch their trades in real-time.
So, it turns out you find a trader that trades the markets that interest you with the skill and guile of a ninja. That’s how you would trade them right?
Here’s the good news – you can copy them. Every transaction they make.
You’ll need to assign a budget to that trader and that’s it, you’re off and running. Your budget doesn’t have to match that of the trader you are copying. You can choose your own budget, whether that’s larger or smaller, and your platform should replicate each trade proportionately.
If you don’t like a trade that your trader has made, that’s no problem. You can stop the trade from taking place on your account. Ultimately, you have control.
What’s in it for the trader you are copying I hear you cry? What is their incentive to let me in on their ninja trades? Well, it all boils down to rewards. A trader that is consistently doing well and building a large following will get paid a monthly fee for trading on the platform, on top of any profits they make from their own trades. A win – win eh?
Here’s a nice widget from eToro that shows you the how their most popular traders are performing over 1 month, 3 month, 6 month and 12 month periods. You can get to know a little more about each trader by hitting the copy button.
So how do you Start ?
Getting Started with eToro : Step by Step
1. Join eToro – Social Trading Network
It’s very simple & free. You can use either your Facebook account , Google account or with your details like username, password, email & phone number.
Now you don’t require to make deposit straight away if you don’t want. But you can only copy someone if you have min a $100 in your account. It’s better to start with $200 or $300 which allows you to copy 2 or 3 traders to diversify your portfolio.
You can deposit either through any major credit cards or any choice of alternate payment systems like such as Skrill, PayPal, Neteller, and WebMoney. You can deposit using following currencies at present : USD, EUR, GBP, JPY, AUD, CAD
eToro also runs various promotional offers time to time.
You must first verify your account to claim this bonus. It’s a simple process. You need one Government issued ID (front and back scanned colored copies are required). It’s also mandatory to verify your phone number. Once this verification process completed, you’ll get an email with your Promotion code!
3. Get Understanding in using eToro Openbook
Newsfeed – Similar to Facebook, you get to know all activities for traders you are following.
Portfolio – This is the place to view all your open trades and monitor your performance.
Watchlist- Here you can add people or markets you are interested in knowing more. You can have multiple lists.
People – This section allows you to filter people to whom you would like to copy based on various criteria.
Markets – Place to trade or research various markets like Forex, Stocks, Indices, Commodities and EFTs
Best Forex Demo Resources and usefull Links
- Trade Coffee Online | CFD Trading
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- CryptoCurrencies Trading explained
- Bitcoin Brokers List for Bitcoin Education and explanations
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- Bitcoin Brokers Review | Where should you Trade Bitcoin
Trading Forex, Stocks and CFDs carries risk and could result in the loss of your deposit, please trade wisely.