If you have ever bet on sports, you likely found sites which give tips on what you should bet. It's similar to social trading in the world of trading.
Social trading definition
Social trading is a trading strategy when you copy someone else's trades. It's suitable for people who don't want to invest too much time to find good trading opportunities or strategies.
What is a social trading platform?
A social trading platform is a service that let's you copy other people's trades and actually do social trading.
How social trading works?
The way social trading works from your perspective is simple. In the platform of these brokers you just search among other traders who share their strategy, trading ideas, and historical performance. After you find the most suitable trader for your needs you can replicate their activity by one click.
The flip side of it is that you need to be careful when selecting the trader to be followed. Check their historical performance and also the risk level they are taking to have realized that historical performance.
Not every broker provide this service, so you have to find a good one, for example, eToro.
Etoro - Best Social Trading
|Summary||eToro is a global social trading broker. It is regulated by top-tier regulators, like the UK FCA.|
|Recommended for||Beginner traders and those interested in social trading (copying other traders’ trades)|
1. Fees –
eToro's trading fees are low, while non-trading fees are high. Inactivity fee exists, but it is ok. Currency conversion and withdrawal fees are quite expensive. eToro charges a conversion when you deposit or withdraw money from your account in a currency other than USD.
2. Account opening –
Account opening is enjoyable and super fast. eToro serves almost all countries except a few: USA, Canada, Japan, Brazil, Turkey, North-Korea, Iran, Cuba, Sudan, Syria. The minimum first-time deposit is $200 for all countries, except for Israeli residents ($10,000).
3. Deposit and withdrawal –
It is easy to deposit with a lot of options, including credit cards. However, there is a withdrawal fee, and only USD accounts are available.
4. Web trading platform –
eToro’s web trading platform is nice looking and easy-to-use. Ok, we say it out loud: eToro's platform looks like a platform should in 2019. Getting your fee report is a bit of a pain.
5. Markets and products –
At eToro you can trade with CFDs and forex. There are also real stocks and ETFs, and many cryptos. It also offers social trading and "CFD funds".
66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
What is copy trading?
Copy trading is a trading approach in which you copy parts of someone else's strategy. Copied elements can include but are not limited to order types, assets and allocations.