In the previous article, we talked about delegating your investment and how you should approach the idea. Navigating the financial markets can be tricky when you don’t have the basics – or you are just getting started – and working with professional investment managers may be the better way to go.
However, delegating your investment is far from being the only option. Aside from getting help in investing your money, you also have the option to copy the investments of others; more specifically, the financial trades that others make in the markets.
Social trading is that other option. It is a way to join forces with fellow investors – including experienced ones – and trade together. You not only have the ability to copy the trades of professionals but also to learn from their positions.
The Best Social Trading Networks
The first thing you need to get started with social trading is to find a good social trading network. Here’s the good news: there are actually a lot of networks to choose from. InvestinGoal brilliantly summarises the top 10 social trading networks and important details about them.
At the top of that list, we have eToro, which is one of the leading brokers in social and copy trading. EToro’s proprietary platform is built from the ground up to make social trading easy. You can open an account with as little as $200 and begin copying the trades of others immediately.
ZuluTrade, on the other hand, focuses more on signals and the social side of the equation. You can choose your own broker and integrate ZuluTrade to the system. The ability to choose your own broker is actually a huge plus since you can stick with the broker that you are comfortable with the most.
Other networks like NAGA Trader and Tradeo have their own advantages and features. Choosing between these networks can be complicated, but there is a simple rule to follow. You simply need to go with the social trading network whose features and resources suit your specific needs best.
Getting Started with Social Trading
Getting started with social trading is just as easy. Yes, you still need to spend some time getting to know the platform and understanding how copy trading or social trading works, but you can learn at a much faster pace while observing other traders on the market.
Once your social trading account is created, you can choose to try trading with a demo or fund the account immediately. The latter allows you to bank real profits as you copy the trades of others, but it also means bearing real risks in the process.
Don’t worry because social trading is a great way to mitigate the risks associated with financial investments. Since you can draw information from multiple traders and experts, you are more likely to make the correct trading decision based on market conditions.
You also have the same risk management tools at your disposal. In other words, you can set your own target profit, set a stop loss to limit your losses, and scale the trades you copy according to your account margin. These are handy tools to have when you are just getting started.
To complete the set, social trading networks allow you to exchange ideas and communicate with fellow traders on the platform. You can ask questions, convey your analysis, and learn so much more about the financial markets you are investing in.
Becoming a Successful Social Trader
Social trading gives you the ability to learn about different financial investment instruments and opportunities, all without going through the usual process of trial and errors. This means you can aim to expand your investment portfolio without taking on more risks or losing your money in the process.
That said, it is still necessary to approach social trading correctly in order to be successful, starting with accepting the fact that social trading is not a way to bypass learning about the market completely. In fact, it is the exact opposite. By learning from the trades of others, you are gaining access to more resources that can help you understand the market better. Blindly copying trades and hoping for the best is not what you want to do at all.
Approach social trading correctly, and you will have your own trading strategy in no time. This too can be fully automated thanks to platforms like MetaTrader integrating custom scripts and automation tools into the trading experience they offer. You may even be the trader that others copy and learn from within a few months.
The rest is easy from there. You have complete control over whose trades you want to monitor and how to react to the signals they send. You also have the ability to deploy your own trading positions in between copying the trades of others. With the top platforms already listed on InvestinGoal, getting started with social trading is certainly easy.