Irrespective of whether you’re a seasoned forex trader with more than several years of experience under your belt or a novice trader looking forward to earn more, social trading can always help you. Social trading has been here for a while and it can open up best trading opportunities for everyone. Through the social platforms, along with the help of the forex brokers, traders can imitate the trading habits of experienced investors who share their information on trading with the rookie traders.
Retail forex traders are allowed to watch the financial habits of professional traders and make similar trades from their personal social trading app or platform. With the proliferation of social platforms like Zulutrade, eToto and Ayondo, experienced traders can also reap several benefits.
Forex social trading – How the process works
Now that you’re introduced to the fact that social trading opens up a world of opportunities for all kinds of traders regardless their experience in the industry, you must be thinking of how to start off with it. Here’s how you could social trade the foreign exchange market.
Firstly, you would require choosing one of the best platforms for social trading that lets you copy trade. In fact, the main characteristic of a trustworthy social trading platform is having forums for sharing ideas of trading, strategies and their historical performance. As soon as you locate your experienced trader who can boast of a positive track performance, you may begin to immitate his trading operations.
Secondly, you have to devise the most lucrative strategy for trading the forex market from any of your leading traders and incorporate the same into your investment portfolio. It is then that that the trading platform will supervise all the activities of trading that you’ve chosen to immitate. All these will be done real-time. The forex trades done by the experienced investors will be included in your brokerage account automatically.
Thirdly, based on the risk level you can tolerate, you may choose to copy trades via a definite pre-set amount irrespective of the size of position opened in the copied account. On the other hand, you may even open trades sizeably to your brokerage account. You will be able to balance the same level of risk as it was with the copied account.
Comparing and contrasting brokers in forex social trading
Every social trade broker will have their own USPs to sell but you have to compare and contrast them in order to settle with the best. Here is a quick guide on the things to watch out for:
- Costs of trading
Fees & spreads: Fees is undoubtedly one of the most vital factors to check while choosing a broker. Usually it’s free to open an account but later on brokers charge fees for other services.
Minimum deposit: What is the minimum amount that you have to deposit in order to start trading? Brokers that cater to the rookie traders don’t make huge demands but there are others as well. Check that before deciding.
Withdrawal & deposit: The way in which money is both credited and debited from your account is one more vital thing to check. Do they use an old-school bank wire which has increased security or do they use modern services like Skrill, Paypal or Neteller?
- Forex social trading platform
User-friendliness: Brokers tend to use a platform that is designed for them but you have to choose an interface that is user-friendly for you as a trader.
Performance: If you’ve settled with a platform that you’re satisfied with, look under the bonnet. Check whether it works the way you want it to.
Configurability: The platform that you choose should be free of clutter, clear and should have a logical layout. Buttons should be in a sensible place.
Speed: How fast can you trade as compared to other platforms? Don’t go for a good-looking interface that is not speedy enough.
Security: Does the social trading platform guarantee you that you’ll never be a victim of identity fraud? Do your homework.
In a nutshell, forex social trading can always be one of the best ways of generating passive income. Nevertheless, ensure that you recognize the risks involved in trading as it your hard-earned money.
