Social Commerce

Social Trading Brokers

What is Social Trading?

Since the advent of online trading, the social aspect of the activity has represented a natural and powerful draw for investors looking for shortcuts to easy profits. Social commerce has gone through several incarnations over the years and at this point, it’s safe to say that it’s here to stay.

For many beginners, it provides a clear path towards some success, and also towards a real understanding of how profitable trading should work.

There are several online operations that are built exclusively on user financial data generated by those users. They cover various business models. According to one study, around 80% of online brokers offer some form of social trading. In fact, social commerce has permeated the entire industry from the ground up.

The most basic social trading channel comes in the form of social media signal groups. There are operators like eToro , who have built an entire business based on social interaction among traders, themselves, with a proprietary platform.

Recently, conversation-based workgroups focused on commerce have emerged as well, with specially developed and designed platforms, which allow members of such groups to collaborate on a level never seen before.

Benefits of Social Commerce

The appeal and top selling point of social commerce is that it creates a sort of symbiotic relationship between those who provide useful data and those who use it. It also represents an easy ‘entry level’ option for beginners and novices – learn from others, evaluate how they make decisions and improve your own trading – all while hopefully making a profit on other people’s strategies as well.

With the right copy trading strategy, those who master their trades, can make quite a bit of money. Traders can profit not only from their trades, but also from those that follow. Brokers will reward popular traders financially. Either through better trade terms, or direct commission.

Followers will find that the benefits can be twofold. First, an easy way to invest can produce good returns. However, his followers can learn from the profitable traders they follow. Following others can provide great learning opportunities. However, success depends on choosing the right social traders to follow.

What Sub-Genres Does Social Trading Have?

The most popular form of social trading is print trading. Copy trading is all about using the social networks of mass traders. This allows followers to have their accounts directly linked to expert trader accounts. The “expert” trades are then automatically copied and replicated by the software.

This kind of social commerce requires no input on the part of followers, which explains its popularity. The size of the investment is adjusted to the followers. So professional forex traders who place trades of more than £10k, can still be followed by newbies who only risk a few kilos.

eToro is arguably the largest and most advanced trading network. It provides a number of trading features, member profile analysis tools and implemented monetization options. It is a total copy trading package. Therefore, eToro is the destination of choice for millions of traders in 150 countries around the world.

Online Trading Made Simple

When social trading was first introduced, it was designed to make trading available to anyone with a web browser. The goal is to make trading and investing easy, fun – and profitable. Early pioneers of social commerce ensured their platforms where intuitive and user-friendly. The platform is constantly improving, offering new tools and improvements. Concepts like ”  one click trading  ” for example (eToro feature). The broker also places emphasis on providing clients with free educational tools, and explaining the concept of social trading. Demo accounts are a popular way for traders to familiarize themselves with the ideas.

On the most advanced platforms, traders can open “buy” or “sell” positions. They can also set “stop loss” and “take profit” orders. This is a strong risk management feature. They automatically stop transactions when certain targets are reached. Similarly, a “trailing stop-loss” will keep the trade open, but adjust the stop loss upwards if the trade makes a profit. Very helpful where traders do not monitor their positions all the time.

Social Trading on eToro

Offering a sophisticated, yet simple trading platform since 2007 and offering more than 5 million users in 140 countries – the world’s leading social trading platform is now eToro. The platform has more than 1,000 assets to trade. They offer clients powerful charting and analysis tools to manage their online accounts, and a variety of social features.

In 2010, eToro launched their first social trading platform. Since then it has grown to become part of the platform. The firm allows traders from all over the world to interact, learn from each other, copy each other, and view each other’s portfolios. The Roubini Think Lab has predicted that by 2021, one in four traders will use social trading and investment services.

Copy Trading Explained

Copy trading has grown exponentially since the first idea emerged. Reflecting the growth of social media and the ability of information to be shared instantly, copy trading (or ‘social’ trading as described above) allows traders to quickly share their trading ideas and strategies with anyone who is interested. Those who follow these traders can duplicate their trades and profit from them automatically.

The basics

Sometimes referred to as copy trading or social trading, the idea gained traction quickly as new investors were able to watch, learn from – and copy – experienced traders. They can recover their success and place the same trade, the same at the same price. The instant nature of these trades means followers don’t miss out on price movements – they can configure their accounts to place  the same trades – at the same time  – as the traders they follow.

Social trading is very interesting for traders making their first steps in the investment world. It is often sold as a method for those new to investing to get involved without much research or prior trading experience. But is there more to copy trading than that? Read on to find out ….

How Does Trading Work?

When a trader decides that they want to use a copy trading platform to follow another, they need to find the right trader to follow. This can be done using various methods. Traders can be filtered by performance, trading frequency, assets they trade – any element of their trading style. Some may look for those with long-term results – others may prefer people who made big profits in the past few days.

The above window gives you the opportunity to run this search process

Once a user has found someone to follow, in one click, they can make sure they open each and every trade that individual makes. The actual amount involved can be adjusted accordingly – so one can follow a millionaire forex trader, making huge trades – perhaps as little as £1 per position. Once configured, every time a new trade is opened (or closed), followers will also open their trade or close at the same price. Apart from the investment size, everything else is the same.

Traders can copy (or follow) as different people as they like, and mirror all their trades. Of course, they still have the flexibility to exit certain trades, or end copying altogether. There is no commitment and his followers are in complete control.

The Best Brokers Offer Copy Trading

Become An Expert And Get Copied

Of course, the description given so far is very biased. Following other traders is what has attracted the majority of people to social trading. However, there is another side to the coin – the traders who  follow it  . Without talented, profitable traders, there will be no one to follow, and the model will break quickly. So what is the motivation for traders to try and attract followers?

First, traders initially only want to be profitable for their own profit – obviously. They open and close positions with the aim of getting a good return on their investment for themselves. If they are successful but why trade with a social trading platform? Well, brokers will generally reward traders who are followed by a significant amount, with the amount of trading volume they generate.

If a trader places one trade, which makes the broker £1 in commission or through the spread, that’s well and good. What if the same trader makes the same trade, but is then followed by 1.000 users, who all place the exact same trade, making the broker £1000? The broker can then reward the trader by deducting the commission. Brokerages know that they need to attract good traders to ensure that there are people following them – so good traders can quickly increase their own profits with good trades, attract users and generate larger trade volumes.

Who Can Make Best Use of Copy?

In fact, social trading should appeal to a variety of investors. Here are three different descriptions of ‘traders’ and how they can take advantage of the best social trading platforms. Most people will fall into this category;

• Traders who want to follow others
  • The most obvious and most common group of traders. People who may not have the experience, knowledge or time, to analyze the market or asset and place trades at the best price. Why not just follow other profitable traders? [  Follow or Copy  ]
• Aspiring traders, willing to learn
  • Many traders want to learn more, and quickly admit that they are not very profitable traders – yet . However, long term, they may want to make all their own decisions and place their own trades. For now, they can mix up their trades, while learning from more experienced traders – and profiting from them. [  Take the lead  ]
• Profitable trader, increasing returns
  • Established traders, perhaps profitable elsewhere, can see the appeal of additional income simply to follow. In terms of risk management, knowing that any given trade will generate a certain income is relatively rare. At worst it might cover trading costs, at best it would significantly increase profits. [  Lead  ]

So it’s clear that most people will fall into one of these groups – and social commerce fits all of them. It may be the middle group – aspiring traders – who may pretend to be social trading. They don’t want to follow it, they want to make their own choices – but why not get the best of both worlds? There is no reason why traders cannot be  copied  – and still  copy others  .

What is Forex social trading?

Forex social trading is the sharing of trading information – be it tips, signals or opinions – but specifically for the