Best Social Trading Platforms

The forex market intimidates many a novice trader, especially given the fact that more than 80% of all FX traders end up making losses. However, there’s an easier way to learn the ropes while greatly minimizing the risk of loss. Enter, social trading. This allows traders to interact with professionals in the field, view their trading history and learn from their trading practices. This way, one mirrors the actions of their mentor in order to achieve success as they learn their way around the markets.

What are the best social trading platforms?

TechBerry

This is a social trading platform that doubles as an automated expert adviser (EA). TechBerry uses deep learning algorithms to scour the trades of more than 100,000 traders on its platform. It then employs AI to select only the best trades, which are then analyzed to create an ideal trading strategy. Users wishing to employ this strategy need only pay an annual subscription to access it. Notably, it also offers loss protection, which is a unique feature among social trading platforms. If you’re concerned about its legitimacy, worry not, for it is licensed by the FCA, FSA, FINRA, CFTC, CySEC, and BaFin. 

Verdict

Best for automated social trading

ZuluTrade

This is a platform that focuses solely on social trading, and does not offer brokerage services. However, it partners with a variety of renowned brokers who you can use to place your trades. This means its users have access to a variety of assets, including crypto and derivatives. To copy trade, you need only pick a trader, set up your risk management, and the rest is done automatically. 

ZuluTrade uses an algorithm to rank traders on the platform by their profit yields. This way, any novices looking to copy a trader can easily search for the top performers. The platform is free of charge, but it offers a profit-sharing account that costs $30 monthly. 

Pros

• Offers automated trading.
• Offers trader ranking for easier access.
• Suitable for beginners.
• Allows one to set up their own risk management.

Cons

• Does not offer brokerage services.

Verdict

Best for beginners.

NAGA

This is a trading platform that allows users to trade forex, crypto, indices, ETFs and more than 1,000 other assets. It features its own social trading platform known as Autocopy. On Autocopy is a leaderboard to help traders find the most profitable strategy providers. These strategy providers earn instant payouts every time their trades are copied. 

Pros

• Wide variety of tradable assets.
• Leverage of up to 1:1000 for international clients.
• Features a mobile app for trading on the go.

Cons

• Charges a flat fee on all copied trades.
• Does not have UK certification.

Verdict

Best for professional traders.

eToro

This is a household name in the world of social trading. It has a variety of services on offer, as well as several tradable assets to choose from. Their interface is extremely user friendly, and you can easily find social trading networks on the Discover tab. What’s more, it has a CopyTrader feature for tracking the performance of the top signal providers. Interestingly, the social trading feature is free to use.

Pros

• Easy to track signal providers’ performance.
• Charges 0% commission.
• Fully regulated and available in most countries.
• Offers a demo account.

Cons

• Limited number of cryptos and ETFs on offer.
• Not available in every country.

Verdict

Best overall for social trading.

Darwinex

This is one of the more innovative social trading platforms in the market. Usually, to copy a trader, you would need to purchase their Darwins. The more expensive their Darwin is, the more successful the trader. These values are determined using a state-of-the-art AI system. Rather than show a trader’s strategies and performance statistics, they are ranked using these Darwins, which fluctuate in line with their live performance.

Pros

• Offers an exchange platform with copy trading features.
• Compatible with MT4 and MT5.
• Several tradable instruments on offer.

Cons

• Not available in the US.
• High minimum deposit requirement.
• Offers no futures or stocks outside the US.

Verdict

Best for self-directed traders.

FXTM

Founded in 2011, this is one of the market leaders in forex and CFD copy trading. Its social trading feature lets you trade signals from seasoned experts on the platform, and you only pay them if the trade results in a profit. You can easily search for top performing traders on the platform and select those that match your personal goals. These searches can be customized to include factors such as risk level, profitability, funds under management, or even a combination of these factors. 

Pros

• Dedicated customer service, available 24/5.
• Variety of educational and research tools.
• User friendly interface.

Cons

• High fees for CFD trading.
• Charges inactivity fees and 50% withdrawal fees.
• Has limited tradable assets on offer.

Verdict

Best for copy trading for those requiring investor education.

Vantage

Launched in 2009 in Australia, this is a leading forex and CFD broker that also offers social trading services. Users can access over 300 currency pairs, commodities, share CFDs, indices and several other instruments. Vantage is one of the few companies offering ECN brokerage, which typically charge the lowest spreads. What’s more, users are not restricted to MetaTrader platforms as it supports a variety of third-party platforms and tools.  

Pros

• Regulated by ASIC, FCA and AFSL.
• Segregates CFD client funds to guard them against cyber-attacks.
• Low minimum deposit.
• Offers leverages of up to 1:500.

Cons

• Their educational material offering is not extensive.
• Limited range of tradable assets.
• Investor protection is only offered to UK clients.

Verdict

Best for high-volume traders. 

Social trading pros and cons

Pros

• Allows you to liaise with some of the best traders in the industry.
• Provides you with valuable market insights from several other traders.
• It’s an excellent way to sharpen your skills and learn the markets as you go.
• Offers additional income if you’re a signal provider.

Cons

• It’s very easy to ignore your own research and trade with the crowd mentality, especially for new traders.
• Automated trading can cause some traders to get lenient, meaning they never gain the knowledge and skills required to expertly navigate the markets. 

What is social trading?

This is a trading style that works a bit like social media. Inexperienced traders interact with experts on the platform, learn their strategies and thought processes, which helps them make better trading decisions. Some of these platforms will allow automatic copying of trades, while on others you’ll have to manually choose which of your mentor’s trades to replicate.  

Social trading: how it works

As aforementioned, a social trading platform is akin to a social media site like Twitter or Instagram. Expert traders post their trading account details, and they amass followers depending on their success rate. Novice traders can then interact with them to better understand their strategies, post comments, or even outright copy their trades. The experts could in turn charge a fee to every follower who copies them, or the platform itself could pay them for the traffic they generate. 

Who should use a copy trading platform?

These platforms are suitable for beginners, as they offer a fool-proof way of improving their profitability in the markets. They are also suitable for expert traders, as they could earn from having their trades copied. Intermediate traders could also use these platforms to gauge market sentiment and obtain valuable market insights. Regardless of the level of trader you are, there is something to be gained from utilizing a social trading platform. 

Is social trading safe for beginners?

As a matter of fact, it is one of the safest ways of onboarding oneself to the forex trade or the trade of any other speculative asset. However, there are plenty of scammers, and before you settle on any one trader to copy, you should do your due diligence. We will tackle the actual factors to look out for later in this article.

How much money can you make through social trading?

As aforementioned, 80% of all forex traders end up making losses. By employing social trading, your odds of making a profit from your first trades increase dramatically. Since you will benefit from insights of seasoned experts, you’re much more likely to make informed trading decisions. However, always do your own research before opening any positions. 

How to start social trading

Before you can start social trading, you will first need to identify a suitable platform. There is no shortage of these platforms, and each of them will have a variety of features to offer. You will want to choose one that offers a community that shares advice and trade ideas, trade signals, insights into market sentiment, and of course, the option to automatically execute copied trades. Let’s look at some of the key factors to look out for in a social trading platform. 

How to choose a social trading platform

Assets offered

When social trading first came into fruition, it was mainly focused on forex trading. Nowadays, you can apply this trading style to practically any financial market. Depending on the asset you wish to trade, you should look for a platform with a wide variety of assets on offer, whether it be currencies, stocks or crypto.

Detailed info

Before you can follow a trader, you will want to make sure that their reputation is backed up by statistics. You will need such information as their trade history, win rate, as well as testimonies from some of their followers. You will want to choose a platform that provides as much information on its traders as possible. 

Trading fees

No matter the asset you’re trading, you will be exposed to trading fees on every transaction. These fees could eat into any potential profits, so you should choose a platform with the lowest trading fees. Additionally, you should look out for other applicable costs for copying other traders, or using automated copy trading services. 

Minimum deposit

Oftentimes, some of these social trading platforms will put a cap on the minimum amount you can put down to trade with them. Depending on your financial ability, you will want to choose a platform with low minimum deposits, as you don’t want to be trading with more capital than you can afford to lose.   

Payments

Usually, these social trading platforms will have arrangements in place to compensate their popular copied traders. Some will offer them fixed commissions, while others will require their followers to pay a membership fee. Whichever the setup, you should be well aware of it so you can manage your portfolio accordingly. 

Copy trading tools

Some social brokers will allow automated copy trading, where you link your account to that of a seasoned expert and their trades are automatically replicated on your account. For others, you have to manually enter the trades you wish to copy. The choice of broker will thus depend on your personal preferences. 

Demo account

As a beginner, you will definitely want to try out sample strategies on a demo account before putting money on the line. Your social broker should have allowances for trying out social strategies on a demo account. 

License and regulation

Usually, most of these financial markets are filled with scammers who are only out to dupe unsuspecting investors of their funds. One way to avoid falling prey to such is ensuring the broker you go with is duly regulated and licensed by the relevant statutory body. If they are licensed in several regions, the better for you.

Customer reviews

The best way to determine the legitimacy of a platform is through unbiased customer reviews. The more reviews there are, the better. Ideally, these reviews should be on third party websites, so that you can be sure they are not cherry picked to falsely advertise an inaccurate picture. 

Number of users

Typically, the number of users on a social trading platform speaks to its legitimacy and profitability. This can also be applied in choosing a trader to copy, as the most successful traders will usually garner the largest following. A large number of users on a platform also gives you a wide variety of traders to copy from and/or interact with. 

Social trading: summary and verdict.

Social trading has a lot of advantages for novice and experienced traders alike. If you’re the former, before you can execute any suggested strategies or trades, try them out on a demo account first. Review their live performances and analyze the statistics of the developers you intend to copy. Additionally, you should keep a watchful eye on all applicable fees, as the copy fees, auto-trading subscriptions and the likes could eat into your profits. Most importantly, always do your own research before opening any positions, as this is the quickest way of learning the ropes and becoming an expert trader.