If you are too busy to follow news and monitor the charts all day, It is possible to participate in forex trading in an easier and less time consuming way. Social Trading allows you to connect with experienced traders, see their performance statistics (including gain percentages), discuss their trading ideas, learn from their mistakes and copy their success strategies. In essence, you make them work for you.
STEP 1 - FOLLOW TRADERS
Choose traders you want to follow or add to your watch list from the top traders. View their past performance stats, read their status updates on their strategies, see their live positions, analyze results and communicate with them. You can literally tap into the wisdom of the crowd.
STEP 2 - COPY THEIR TRADES & STRATEGIES
If you are satisfied with the results of the trader and you like his trading style, you can copy his trades with one click of a button. the best part is that the trades will be made prpoportionately to your account size - If he deposit 10% of his account into position (which might be 10,000 USD), then you can also open a position with 10% of your account (which might be just $100USD), thus significantly lowering your exposure to risk.
STEP 3 - MAKE PROFESSIONALS WORK FOR YOU
Now you can sit back and watch how experienced traders do the work for you . Your task is to carefully analyze their results and learn as much as possible from their trades. the ultimate goal of social trading is to build a portfolio of the best traders. You must have traders with different risk appetite and various currency pairs or commodities traded so you don't have all your eggs in one basket. It is highly recommended not to allocate more than 20% per trader. Also, before selecting a trader to copy, test him with virtual money.
THE BEST SOCIAL TRADING PLATFORMS
1. eToro
2. Tradeo
3. Zulu Trade
5 TIPS FROM PROFESSIONALS
1. BE CAREFUL WITH FIGURES THAT LOOK TOO POSITIVE
A positive profit margin does not always point to a lasting success, so it is important to investigate how well the trader managed over a longer time frame. test first with a virtual trading account
2. ALLOCATE A MAXIMUM OF 20% PER TRADE
It's not wise to put all of your money in one trade. Diversify risk by only trading 5 - 20% of your total deposit.
3. TALK WITH A PRO
Try to start a conversation with an experienced trader, either online or in person. Ask what amount they recommend for you to copy their trades, what stop loss they recommend, and any other questions you may have. With 3 million users worldwide you may find that your neighbor is one hell of a trader and later go out for a coffee to discuss future investment options.
4. AVOID "YOUNG ACCOUNTS" or "NEW ACCOUNTS"
If you want your investments to be safe, it is recommended to copy traders with at least 1 year of experience.
5. THE TRADER MUST MAKE PERMANENT PROFIT
Review figures of profit and loss of the trader. There are many cases where you can see an increase in the first quarter of the year, but a small drop in a single month.
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