What is social trading?

Social trading first emerged in 2010. It allows investors to access a social trading platform and automatically replicate the trades executed by available professionals on the platform. Social trading platforms include comprehensive rankings with integrated data about each available professional, detailing their work patterns, performance, loss limits, risk management plans, capital, personal profiles, and work experiences. This information provides insights into the results of their work and allows for comparisons with other available professionals.
social trading

Social trading, or copy trading, is considered one of the most widely adopted technologies and working systems in the financial market within a short period. It enables traders to share work tactics and trading strategies among themselves, allowing the replication of trades made by a professional on their platform through your own trading account.  

For novice traders who are still in the learning phase of successful trading strategies, copying trades from experts and professionals serves as a way to explore new market analysis methods. Through copy trading, instant communication with tens and hundreds of traders worldwide is possible, regardless of their location, to obtain the best suggestions for optimal trading. In many cases, it is considered an efficient shortcut to success, requiring less effort in analysis and monitoring.

Becoming an expert trader requires going through numerous experiences over a considerable period. The possibility of failure is very real if the investor is not armed with tools and techniques that aid success, a task that is not simple. The experts being followed in copy trading may have extensive experience in the field, along with access to advanced tools, software, and technologies that may not be available to everyone. They could either be individuals with profound expertise or represent specialized companies providing such services.

Through the expert’s trading strategy, one can diversify income sources and distribute risk percentages according to the different financial instruments being traded.

How is social trading conducted in the forex market?

Through various social trading platforms, you have the option to select one or more experts based on your evaluation and review of each expert’s profile. After examining each expert’s profile, you can set up your trading account to copy their trades, usually through a few simple steps defined by the platform settings. The expert is compensated based on the brokerage fees, profitability achieved, the number of followers, and other factors.

This feature provides almost all the advantages of traditional account management with a reduction in management costs. It also offers increased transparency and easier expert replacement according to your investment goals.  

Once you decide to copy the trades of a chosen expert, you can review the past or ongoing experiences of other users, observing their ratings to determine the amount you wish to invest. It’s worth noting that you have the option to stop following the trades of the selected expert at any time. Additionally, you can communicate with them, inquire about their trading strategy, and seek clarification.

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