How to Choose the Best Social Trading Platform

How to Choose the Best Social Trading Platform

Social trading is a relatively new trend. It has created new opportunities for people to share information with each other. By using a social trading platform, you will be able to follow accounts and keep track of trades on a micro-trading level. Moreover, you will be able to find a trader whose trading approach matches your own.

When choosing the best trading platform, it is important for traders to examine the platform’s reliability and social trading possibilities. During the complete assessment, consider the following aspects:

Broker’s Size and Number of Users

Social trading platforms let you benefit from others’ trading talents. The more users there are, the more things there are to go around. Additionally, the growing variety of trading styles creates more opportunities for all network members to develop well-balanced copy trading. So when it comes to social trading, the size really matters.

When a platform involves many traders, the variety of trading styles is usually narrower. Eventually, you might see a lot of “copy trading bubbles” as many traders in the network just start copying each other. Thus, each one has less risk of going bust.

For this reason, risks of shady trade manipulations are reduced to a minimum. There are also fewer conflicts of interest and other problems people associate with online trading.


Commission Structure for Copied Traders and Popular Investors

Every social broker decides which commission to impose on investors. This mainly refers to copied traders. For example, ZuluTrade offers a fixed commission to all its copied traders. That is, as a famous social trading broker, it gives $5 to traders whose items have been copy-traded.

Investors and traders should be familiar with different commissions provided to copied traders. This knowledge will affect the way they handle their portfolios. ZuluTrade offers a bunch of features and forex trading resources. eToro provides traders with a whole set of benefits:

  • Fixed monthly payments based on the investor’s level
  • 2% commission on the amount under management (AUM)
  • Extensive rebates reaching up to 100%
  • Monthly marketing allowances
  • Quarterly education allowances
  • Allowances intended for annual events

Compatible Brokers and Trading Platforms

ZuluTrade has been mentioned before as a solid trading facilitator. And this is true, as it connects to different forex brokers via the MT4 trading platform. Therefore, traders receive their own broker’s MT4 trading resource to trade with ZuluTrade.

At the same time, eToro has its own trading platform for trading with the others. This platform is more suitable for social trading than MT4. However, many users still prefer using an MT4 expert advisor due to its greater convenience.

Whether the Broker Allows Automated Social Trading

Some social brokers such as ZuluTrade get expert advisors involved in automated trading. This way they optimize their trading capabilities.

Both manual trading and automated trading have their own positive and negative sides. Both copied traders and copiers may express different preferences and opinions about automated trading. So they should check whether automated works or doesn’t work for their social broker.

Transparency in Social Trading

The best social trading platform has different amounts of information about each trader. Some of them give basic overviews while others get deeper into details.

A few platforms reveal a user’s entire trade-by-trade trading background. Due to regular updates, the previous data gets transformed into statistics, including charts and graphs. This way it is easier to estimate each trader’s performance.

The best platforms tend to provide statistical data to reflect each trader’s performance. All the data is based on previous results, which can easily boost traders’ operations by getting more copiers involved.

When looking for the best social trading platform, make sure to pay attention to a trader’s detailed portfolio. This is a valuable source of information you can’t afford to ignore. It shows you what tools you can use to diversify your portfolio. In this context, you can estimate the risk score. This is a crucial aspect of the social trading process. After all, you won’t get too far unless you’re using social trading platforms that have extensive features.

Learning from Other Traders by Way of Social Trading

Social trading has become a great way to learn from the success of other traders. Their knowledge and expertise can teach you how to make your own money. But you will need to choose the proper platform. It’s not as easy as it seems, considering the growing market competition. But with the above instructions, you have a better chance of making the right choice.