Traders can be filtered by performance, trade frequency, the assets they trade — any element of their trading style. Some might look for those with long term results — others might prefer the people making big profits in the last few days. Once configured, each time a new trade is opened or closed , the follower will also have their trade opened or closed at the same price. Apart from the size of the investment, everything else is identical.
Traders can copy or follow as many different people as they like, and mirror all of their trades. Of course, they still have the flexibility to stay out of particular trades, or end the copying altogether. There is no commitment and the follower is in complete control. Of course, the description given so far is very one-sided.
Following other traders is what has attracted the vast majority of people to social trading. There is however, another side to the coin — those traders who are followed themselves. Without those talented, profitable traders, there would be no-one to follow, and the model would break down very quickly.
So what is the motivation for traders to try and attract followers? Firstly, traders are initially just looking to be profitable for their own benefit — obviously. They are opening and closing positions with a view to getting a good return on their investments for themselves. Assuming they are successful however, why trade with a social trading platform? Well, the broker will generally reward traders who are followed in significant numbers, with a share of their trade volume generated.
The broker can then reward the trader with a cut of that commission. The brokerages know they need to attract good traders to ensure there is actually people to follow — so a good trader can quickly ramp up their own profits by trading well, attracting users and generating greater trade volume.
In truth, social trading should appeal to a broad range of investors. Most people will fall into one of these categories;. So it is clear that most people will fall into one of these groups — and social trading suits all of them. It is perhaps the middle group — aspiring traders — who might be reticent about social trading.
They do not particularly want to follow, they want to make their own choices — but why not get the best of both worlds? There is no reason why a trader could not be both copied — and still copy others. Forex social trading is the sharing of trading information — whether tips, signals or opinion — but specific to the Forex markets. Social trading will generally include foreign exchange assets anyway, but is occasionally referred to separately. Most brands that offer copy trading, also offer demo accounts.
So find a brand via a broker comparison tool or website, and try copy trading via a demo account with zero financial risk. Toggle navigation. Compare brokers Reviews Binary. Social Trading. Social trades are shared between traders, creating a wealth of market sentiment data. Individuals can follow the trades of others, or choose to lead, and share their own trades.
What exactly is social trading? Copy trading allows novice investors, with little time to trade themselves, to profit from the knowledge of other, more experienced, traders. Copy Trading can be loosely described as trading in a social way, sharing information, trades and performance with others.
More specifically, it allows traders without the time or knowledge to trade full time themselves, to follow the trades opened by more experienced traders. Those experienced traders also benefit as their broker might give them preferential commission or cashback on the trading volume they generate via their followers. What is Forex social trading? If in a couple of months a lot of the readers try out the platform and decide as to whether or not the platform is as successful as claimed, then maybe this verdict will change.
Normally it is best practice to err on the side of caution when it comes to these types of platforms. A good idea can be to get in touch with a developer or member of staff for the platform and see how long it takes for them to respond. To sum everything up, it is no advised for you to sign up and make a deposit with the Copy Trade platform at this moment in time. There is a feeling about it that the software may be a scam so you want to play it safe and see what the verdict is from others.
Your email address will not be published. Copy Trader No Comments. Review of Copy Trader Upon first going to the website of Copy Trader, you will receive a welcome message from an attractive looking woman who is trying to get you to join the members only area, There is also an introduction video that can be watched but there is not much value to be had by sitting through it.
Conclusion Copy Trader is not something that can be recommended at this moment in time. Pros: Free Cons: No information about the workings of the software. Author Recent Posts. Follow us. John Miller. Author at 7 Binary Options. John Miller is the main author of content here at 7 Binary Options.
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This kind of diversification is one of the best tools in your box. Identifying the best traders comes down to choosing the one who has logged the most trades and secured the most wins over a decent timeframe, and you should select backup traders to too.
These happen when a pair of assets are influenced by the same set of catalysts. The reason for doing this should be fairly obvious. The last and probably most significant piece of advice to share about binary options copy trading is to make sure you always keep control of your trades and your traders. Your platform will include risk controls which are there to help you guard against avoidable losses.
Using automated trading robots for binary copy trading is risky. If you do go down this route then make sure to manage your risk level by limiting total losses or limiting the number of consecutive losses. Binary options copy trading can be a route to success if you manage it sensibly. You need to pick the best trading platform and then become an active copy trader using some of the above tips to guide you. Following a successful trader without due caution is a path to ruin. Treat binary options copy trading like you would any other investment.
Be prudent and patient and you will succeed in time. Call me back. Please input your phone number with country code and we will immediately contact you. How to start? Open an account. Copy trading is just like any other kind of trading; you have to spread your risk around. Blindly copying is not the way to go. For this reason alone it is a smart idea to follow more than one trader but there is still risk in that.
This way you are diversified in two ways;. When looking for a trader to follow build a list of possibilities for each asset. If you were the coach of a football team you would want to have a first string and second string right? The same idea applies here.
When this happens its time to rotate them out of your portfolio and rotate in a fresh trader. When choosing assets try to avoid unwanted correlations. Correlations are when two assets are affected by the same catalysts. It is impossible to avoid all correlations, the market is intricately entwined, but you can avoid obvious ones. The reason is simple; it defeats the purpose of diversification.
My suggestion is for a copy portfolio to look something like this;. The final tip and perhaps the most important is to manage your trades and your traders. Use the risk controls provided by the platform, they are there for a reason. If not, even with a great platform and a good trader, you could come back to find your account wiped out. Copy trading via a robot increases risk. Automated trading means you lose complete control of your trading. There are risk management tools that can be put in place — for example limiting total losses, or the number of losses in a row.
It is vital these tools are used. If the service does not offer them, look elsewhere. Copy trading is OK.