How do you go about choosing a social trading network that matches your specifications? Different social trading platforms offer varying features. When choosing a social trading platform, you need to develop a list of things you expect out of the interaction. These things will help you determine and choose which network is worth the investment. Below are a few tips to help you choose a social trading network.
1. Choose a Social Trading Platform with a Demo Account
A demo account is used for trading without using real money. The goal is to hone your skills and learn how to trade without losing money. An excellent social trading platform allows you to simulate real trading by offering pretense money. That way, when you are confident in your skills, you can deposit real money and trade.
The demo account should also allow you access to a broad range of financial instruments from futures, stocks, and options to cryptocurrency and CFDs.
2. Choose a Social Trading Platform Founded by a Trading Expert
Not all social trading platforms are there for the right reason. It takes expertise, dedication, and the willingness to see others succeed to design a social trading network. Therefore, research the management of the platforms you have shortlisted. Choose one with trading expert founders. It enhances the platform’s credibility. Our platform was founded by one of the industry’s top trading experts with years of experience and dedication. This makes us the most reliable social trading network traders prefer.
3. Choose A Trading Network with an Automated Trading System
Are you held up and have no time to trade? The idea of social trading or copy trading helps you imitate other expert traders’ signals. Fortunately, some systems are designed to let users automatically copy their peers’ trading signals and habits, whether it’s beginners or pro traders.
As such, you have confidence in your trading, especially if you are copying a trader with a good track record. Confirm if it is possible to copy other followers, for example, if trades that they copy will automatically be copied in your accounts.
The platform should monitor all activities of all traders to which you are connected on a real-time basis. Your similar deals should also be executed automatically on your brokerage account at all times.
If the trader you are copying is using an automated system and strategy. Try finding out if the trader monitors the system and tries to make manual intervention if some extreme market conditions happen, for example, Greece default. Not all automated systems are perfect, based on historical events.
Therefore, nobody can predict how the system will behave under future market conditions. However, expert traders will know when to make adjustments.
4. Choose A Network with an App
Not everyone does their trading on their PCs. Trading should be at one’s convenience, so trading, among other activities, is being integrated with smartphones and tablets. An excellent social trading platform should have a mobile app version.
A social trading app will allow you to copy trade while on the move, and trading is easily accessible.
5. The Social Trading Platform Should not Limit Users to Certain Regions
Some instruments traded on social trading networks, especially Contracts for Differences (CFDs), are unavailable in the United States. Moreover, some social trading platforms lack the proper licenses to operate in the United States.
Fortunately, some platforms are available for US residents and other nationalities.
6. Reasonable Investment Requirements
Choose a social trading platform with a reasonable minimum amount needed to copy a single trader. Most networks allow you to invest from less than $300. Some go higher than that. This depends on what you can manage at a particular time.
Another consideration is the additional cost the network charges per trade you copy, in addition to the spread. Also, check the monthly or annual fees that the social trading platform charges for managing or servicing your account.
If you are copying a trader who trades four times the amount your account balance can trade, the result is always proportional.
7. Choose a Platform that allows your freedom as a trader
Before choosing a social trading network, check to ensure there are no long-term contracts and obligations. The trading network should allow you the freedom to freeze your trading accounts instantly and make withdrawals whenever it is convenient for you.
8. Choose a Platform with a Working Forum and Support
A smooth customer support system means you can contact the network’s support team via the social trading app, email, or on their websites. A working support team will help you resolve your issues quickly, help reduce complications and answer your queries.
Moreover, is there a platform or forum where you can interact with your other traders? Live discussion is an added feature since traders can share real-time information, tips, and tricks.
Some traders also prefer to link to the social trading platform via their Twitter or Facebook accounts. A social platform, support team, and the ability to link to social media renews traders’ confidence in the trading platform.
9. Availability of Instruments to Trade
Choose a trading network that allows you to access different financial instruments to follow or copy trade. Financial instruments are usually classified into five major categories: forex, bonds, equities, and commodities.
The price at which the financial instrument is traded depends on its supply and demand. As such, choose a social trading network that offers sufficient instruments to follow or copy trade.
10. Choose a Network with licensed brokerage companies
A good choice for a social trading network would include one which collaborates with established and reputable brokerage companies. These companies should be licensed and regulated by government bodies.
Additional Tips and Considerations
1. In what language can you view the social or copy trading platform?
2. Which methods are available to fund your account?
3. Do you have direct access to the relevant social trading network website?
With copy trading (social trading), you can make significant returns from following the right audience. Significantly, you can also make huge losses, mostly if you copy amateur traders. When choosing a social trading platform, ensure you have a checklist to guide you in making an informed decision. Most importantly, ensure the network has a good support team that will help you in case of anything.