Trading in financial markets is not exactly an easy thing to do. It requires lots of market knowledge and expertise. Otherwise, you could easily end up losing your money. This risk of having your entire investment wiped out is what keeps most people away from trading. Over the last couple of years, however, a new trading way that opens trading up to everyone has gained popularity. We are talking about social trading and which are the best social trading platforms.
Those who have never heard about social trading before are a new kind of trading that combines online trading with some aspects of social media.
With social trading, you can identify and follow experienced traders, just like you would on social media, and learn from them. Also, you have the option of seeing their trades and duplicating them on your account. Some social trading platforms will even allow you to set up your account such that when a trader you are following makes a trade, the same trade is automatically and immediately executed on your account.
Trading Newcomers Can Start Here
By allowing people to copy more experienced traders, social trading has made it possible for anyone to make money, even if they have zero trading experience, provided they follow the right traders.
Also, it provides experienced traders with a chance to make an extra coin on the side. As an appreciation, the experienced trader receives some compensation for each copied trade.
Social trading has several benefits. First, it encourages collective knowledge by allowing novice traders to learn from the more experienced traders. Second, by copying successful traders’ trades, social trading allows novice traders to learn as they earn. Not only are you learning the strategies that experienced traders use to make successful trades. You also have a better chance of making money while at it. Social trading is also a great way of allowing novice traders to build trading confidence since they can watch and learn from others.
Skip Emotions
Finally, social trading allows novice traders to make trades without their judgment getting clouded by emotion. Trading can be a very emotional endeavor, and unfortunately, many traders lose money because they allow emotion to get in the way when making their trading decisions.
With social trading, novice traders can make emotion-free decisions with the confidence that the experienced trader they follow has done proper analysis on the trade.
If you want to get started with social trading, you will have to choose a trading platform to use. With dozens of social trading platforms to choose from, choosing the right one for you can be a little difficult, especially for a beginner who has never used a trading platform below. To make things easier for you, we have compiled a list of the five best social trading platforms. These are:
eToro
This is the best and most popular social trading platform. While they were not the first to delve into social trading, eToro has mastered social trading to a Trade. eToro works almost like a social media platform, complete with a timeline where users can interact with their friends and followers and see each other’s activities, including their trades. Users can then manually copy trades from their favorite traders.
eToro also has a feature known as CopyTrade technology, which allows the trades of followed traders to be copied and automatically executed on a user’s account. eToro also offers a free and unlimited demo account. Here users can practice before trading with real cash.
One of the best things about eToro social trading is the quality of their copied trades. For a trader’s trades to be copied by other users, they must place the trade. Followed traders are not allowed to place fully automated trades. This means that whenever you copy someone’s trade and manually place their trade.
eToro is also heavily focused on ease of use, making it a great social trading platform for beginners. In addition to forex, it also allows users to trade in a wide range of other tradeable assets.
Pepperstone
This is another popular and impressive social trading platform. One of the best things about Pepperstone is its compatibility with a wide range of third-party platforms and tools. For social copy trading, Pepperstone users can use platforms like ZuluTrade, RoboX, MirrorTrader, and myFxbook from MT4. Pepperstone also gives users access to the native forex signals market available on platforms like cMirror and MT4. Pepperstone is also compatible with several other third-party platforms and tools such as DupliTrade, Chasing Returns, AutoTrade, cTrader, cAlgo, and so on.
In addition to forex trading, Pepperstone also allows users to trade in other tradeable assets. However, its range of tradeable assets is not as wide as that of eToro. To make it easier for users to make technical and fundamental analyses, Pepperstone gives its users access to various third-party analysts’ content.
Users’ love about Pepperstone provides excellent customer service, and its fees and prices are quite competitive compared to other social trading platforms.
FXCM
FXCM is another great trading platform for experienced. Both high-volume traders and beginner traders looking to learn and earn from the more proficient traders’ experience.
For users interested in social copy trading, FXCM offers several options, including access to third-party platforms such as ZuluTrade, MT4, and NinjaTrader.
For novice traders trying to learn and improve their trading strategies, FXCM offers a lot of educational content, including articles, videos, and webinars.
It also provides a wide range of research tools, including a pattern-recognition scanner, a market screener tool, access to news from Investing.com, access to premium content from Trading Central, and so on.
Like the other platforms covered in this article, FXCM allows users to trade in other assets in addition to forex. However, its range of tradeable assets is narrow compared to some other platforms covered in this article. FXCM allows users to trade in 39 currency pairs and 32 CFDs. FXCM also has an app store that gives users access to various technical indicators, add-ons, and automated trading bots. Finally, FXCM has a team of knowledgeable and dedicated technical support staff. FXCM is ready to help you in case you run into trouble.
Darwinex
While Darwinex is a relatively new player, they have still managed to build a name for themselves in the social trading scene within the short time they have been around.
Darwinex’s approach to social trading is quite different from other social trading platforms’ approaches. Unlike other social trading platforms, where users can see the strategies of traders they follow. Darwinex hides traders’ strategies behind something known as Darwin’s strategies, which other traders can buy as an asset.
The more earnings these Darwin strategies generate, the more valuable they become, allowing traders who have these Darwin strategies in their portfolio to make money as well.
Darwinex provides a wide range of research tools that users can use to sort through the available Darwin strategies (over 4000) and choose Darwins to invest in.
Darwinex gives users access to 41 currency pairs, 5 cryptocurrencies, 6 metals contracts, 10 indices, and 244 single stocks. It also gives traders access to the MetaTrader platform for self-directed traders.
FXJunction
Our list’s last platform is FXJunction, a social trading platform that is hugely focused on creating a community of traders. At the platform, users can share trading strategies and ideas and learn from each other. Like most other social trading platforms, FXJunction allows users to view traders’ trading signals they follow. If you come across a trading strategy you like, you can then automatically replicate it on your account.
FXJunction maintains a list of validated traders that you can follow. These traders are known as Signal Providers. To follow these Signal Providers, you will be required to pay a fee known as the AutoCopy fee. These fees make it possible for FXJunction to pay the validated Signal Providers whose trades have been copied. This means that if you become a Signal Provider, you can make some additional money on the side by having other users copy your trades.
While FXJunction is free, you will need an account with MT4 or MT5 to trade on FXJunction.
Wrapping Up
Social trading has made it possible for inexperienced traders to make money through trading by copying more experienced and knowledgeable traders.
When it comes to social trading, many trading platforms to choose from can be overwhelming for a beginner.
With this list, we have narrowed down the options for you. Hopefully, this has made it easier for you to choose a platform that will work well for you.
While any of these 5 social trading platforms are a great choice, We would recommend eToro. The platform has consistently maintained its position as the best social trading platform over the last couple of years.