Whichever financial asset you intend to trade, be it stocks, forex, crypto or CFDs, you will require skills and expertise to successfully maneuver the markets. The truth is, majority of people who trade these speculative assets end up making losses. A few years ago, a study showed that a chimpanzee throwing darts was more successful at picking stocks than a majority of Wall Street analysts. With this in mind, it would seem that the odds are stacked against beginner investors. However, there is a way to solve this hurdle. Enter, social trading.
List of the best social trading platforms
- TechBerry
- eToro
- FXTM
- ZuluTrade
- NAGA
- Vantage
- Pepperstone
1. TechBerry
Why do we choose TechBerry?
Launched in 2015, this is a FIDC regulated social trading platform, that coperates with dozens of different regulated brokers. TechBerry’s technology offers access to automatically generated Forex strategy, based on professional traders that share their stats with the company’s AI. For social trading, the platform uses AI to track performance and order flow of 100 000 active traders. After processing the enormous amount of data TechBerry makes up its leading subscription-based product for individuals, under 6 various membership options, with 14 days free trial available.
| Pros | Cons |
| Licensed by the FDIC | No manual trading |
| Compatible with MT4 and MT5 | Has a high initial deposit |
| Offers loss insurance | |
| Free trial |
Verdict
Best fit overall for individuals in Forex.
Rating: 5/5 | Full Review
2. eToro
Why do we choose eToro?
eToro is a household name in the social trading industry. It boasts over 20 million users in 140 countries. It has a variety of traditional assets on offer, as well as crypto, indices and ETFs. Its interface is very user-friendly and one can use the Discover tab to find networks of like-minded traders. Using its CopyTrader function, one can also track the performance of leading experts, analyze their history and closely follow their trades. What’s more, it is free of charge to access all of eToro’s social trading features.
Core features
- Offers a variety of educational material.
- Has over 3000 tradable assets.
- Has a minimum deposit requirement of $10.
- Can be accessed on web or through their mobile apps.
| Pros | Cons |
| Easy to track top performers. | Limited number of supported cryptos |
| Allows copy trading in one click. | Not available in every US state, nor every country. |
| No commission on trades. | |
| Licensed, and available in 140 countries. | |
| Plenty of educational and research material. | |
| Offers a demo account. |
Verdict
Best overall for social trading.
Rating: 4.5/5.
3. FXTM
Why do we choose FXTM?
Founded in 2011, this is a leading social trading platform for forex and CFDs. On it, you can use the FXTM Invest feature to search and select traders that match your trading style. You can customize these searches according to their profitability, risk level, funds under management and returns, or a combination of these features. You can then choose to copy one or several traders, as well as how to allocate your funds per strategy provider. Notably, you only pay the strategy provider if the copied trade results in profit.
Core features
- Supports demo trading.
- Compatible with MT4, MT5 and the FXTM Trader platforms.
- Available on Windows, iOS and Android.
- Allows leverages of up to 1:1000 depending on the asset traded.
- Wide range of assets on offer.
| Pros | Cons |
| Offers a demo account. | Charges withdrawal and inactivity fees |
| Numerous research and educational materials. | Charges high fees for CFDs. |
| Offers leverage. | |
| Offers some of the tightest spreads. |
Verdict
Best for investor education.
Rating: 4/5.
4. ZuluTrade
Why do we choose ZuluTrade?
Launched in 2014, this is a social trading platform that boasts more than a million users and trading volumes north of $800 billion. There are many renowned professional traders with a proven track record whose trades you can copy. You can access such information as their profiles, the amount of money they trade with, the amount of money held by their followers, as well as their annual ROI.
Core features
- Allows automated crypto trading with their AutoTrade feature.
- Supports stocks, forex, commodities and more than 40 other assets.
- Has a low minimum deposit of $1.
- Compatible with both MT4 and MT5.
- Can be accessed on web as well as on their iOS and Android apps.
| Pros | Cons |
| Well suited for beginners. | Does not offer brokerage services. |
| Allows automated trading. | Has limited number of assets on offer. |
| Offers a trader leaderboard ranked by performance. | Does not offer leverage. |
| Allows one to set up their own risk management. |
Verdict
Best for diversified automated copy trading.
Rating: 3.5/5.
5. NAGA
Why do we choose NAGA?
This is a leading social trading platform that offers a wide variety of tradable assets. With NAGA you can trade forex, stocks, commodities, ETFs and crypto. It has a dedicated social trading platform called AutoCopy. Here, you can find more than 9,000 expert traders who are carefully selected through multistage processes.
Once you click on a strategy provider, you can see their trade history, their number of followers, their win rate, loss profile, who they follow as well as who they copy. The platform charges a flat fee of $0.5 per copied trade, which us paid out instantly to the strategy providers.
| Pros | Cons |
| Wide variety of tradable assets. | Flat fee for copying trades. |
| Offers leverage. | Not regulated in the UK. |
| Allows copy trading on the go from their mobile app. |
Verdict:
Best for professional traders.
Rating: 4/5.
6. Vantage
Why do we choose Vantage?
Founded in 2009 in Australia, this is an ASIC-regulated broker and social trading platform. On it, users can trade over 300 currency pairs, commodities, stock CFDs and indices. Notably, it offers ECN brokerage, which allows it to offer tight spreads. Additionally, users are not restricted to the MetaTrader platforms as it is compatible with several third-party platforms and tools.
| Pros | Cons |
| Licensed by ASIC, FCA and AFSL | Limited educational material |
| Low minimum deposit of $200. | Investor protection is only offered to UK clients. |
| Offers leverages of up to 1:500 | Limited selection of assets on offer. |
| Segregates clients’ funds to prevent loss by hacking. |
Verdict
Best for scalpers.
Rating: 4/5.
7. Pepperstone
Why do we choose Pepperstone?
Launched in 2010, Pepperstone is a world-renowned brokerage platform that is licensed by FCA, BaFin and ASIC. It does not offer its own proprietary social trading platform, but partners with three popular copy trading platforms. These are MyFxBook, MQL5 and DupliTrade. As for tradable assets, it offers forex and CFDs.
Core features
- Licensed by UK’s FCA, Germany’s BaFin and Australia’s ASIC.
- Supports MT4, MT5 and cTrader.
- Offers copy trading on three platforms.
- Offers educational and research material.
- Offers a demo account.
| Pros | Cons |
| Low spreads for forex | High minimum deposit for copy trading on MyFxBook and DupliTrade. |
| No withdrawal or inactivity fees | |
| Copy traders have three platforms to choose from. |
Verdict
Best for both new and experienced traders.
Rating: 4/5.
Meaning of social trading
Imagine a social network much like Twitter or Instagram, except it is populated with traders of speculative financial assets. Such a platform would be useful for beginners, as they would interact with seasoned traders, get advice, ideas, and a breakdown of what goes into creating the strategies that they use. Such a platform is called a social trading platform. Thus, social trading involves the interactive sharing of ideas and strategies, which help inform traders when to open and close positions. Some of these platforms will even allow traders to copy each other’s trades.
Social trading: how to earn with it
Social trading begins by providing a platform where traders of different expertise levels can interact. The professionals share their account details such as their trade history, strategies, as well as their live trades. Other users can then comment on their strategies, seek advice on how to tailor such strategies to their personal needs, or even outright copy their trades.
The more successful a trader is, the more followers they tend to gather. Such professionals with a large following earn by either charging their followers a fee for access, or the platform pays them a commission for generating traffic on their site.
How to get the most out of social trading
If you’re a beginner, you can use social trading to ensure that you make profits even as you learn your way around the markets. As a pro, you can increase your income through social trading by letting others copy your trades at a fee, or copying other experts. However, whichever class of trader you are, you should never open any positions before doing your own research to corroborate the suggestions you receive.
Should you use social trading platforms?
As a beginner, a social trading platform will enable you to learn the ropes as you follow the strategies of experts in the trade. This allows you to make money even as you learn. Additionally, some platforms will allow you to copy trades either manually or automatically using bots.
As a seasoned trader, you could also benefit from social trading. For one, if you choose to share your strategies and signals, you could earn passive income from anyone who follows you. What’s more, you could increase your profits by engaging with other experts with an impressive track record.
Social trading platforms will also enable you to track your performance. This way, you can identify your strengths and weaknesses, and work towards improving your profitability. Additionally, you can build a diversified portfolio of traders to copy, depending on the assets you’re trading. Even without knowledge in particular assets, you can profit from them by riding on another trader’s expertise.
Choice of platform: main criteria to consider
Regulation and license
The financial markets are rife with scammers and malicious individuals masquerading as brokers. The best way to ensure the safety of your funds is to transact only with brokers duly regulated and licensed by the relevant statutory bodies. If you can find a social broker that licensed in multiple jurisdictions, the better.
Financial security of customer funds
There are brokers who will take additional measures to ensure the security of their clients’ funds. Some of them will use segregated accounts, while others will provide loss insurance. For crypto brokers, they may use a combination of hot and cold storage to prevent losses from hacks. You should find out which security measures your broker is taking before investing with them.
No hidden fees and commissions
Social trading platforms may charge higher spreads than most brokers, but oftentimes, this is a small price to pay for the steady profits you get to enjoy. Others will have you pay a fee to every trader you copy, while others will have you pay a subscription to access their services. Whichever the case, you should find out all applicable fees and commissions as these could eat into your profits.
Control of your portfolio
Some of these platforms will have you link your account to that of the trader you copy, and all their trades will be automatically replicated on your account. Despite its advantages, the professional may have higher risk tolerance, or even more capital than you, which justifies their decisions. To prevent prematurely blowing your account, you should choose a platform that offers you the flexibility to tailor the strategies you copy to your own personal needs and goals.
Transparent trading conditions
If you intend to use social trading to inform your trading decisions, it would be beneficial to have as much information about the traders you intend to copy as possible. You will need access to their extensive trade history, as well as testimonials from their followers. For this reason, you should choose a platform that offers the most transparency on their strategy providers.
Choice of assets
Initially, at its inception, social trading was meant for trading forex. Nowadays, platforms are offering more and more assets, which have enabled their users to diversify their portfolios on the same platform. For best results, you will want a platform that offers a wide variety of assets, which will allow you to widen your exposure.
Copy trading tools
There are several tools that you will require when copy trading. For instance, a leaderboard that ranks traders by their success rate could help narrow down the professionals to follow. A good search function can also help you find traders proficient in different asset classes. It could also help you find traders by their position sizes, or any other factors that align them with your personal trading preferences.
Popularity of the broker
Usually, people tend to gather around where they see the most success. It is more likely that a platform with more users offers the best trading conditions for their clients. What’s more, if a platform has many glowing reviews, especially on third party websites, this could be a sign of its legitimacy.
Payments
Different platforms will have different payment structures for their popular/copied traders. These structures may very well influence the way these professionals set up and manage their portfolios. Some of these structures could lead them to taking unnecessary risks just for the payout from the platform.
User friendliness
As a beginner, you will obviously want to use a platform that’s easy to navigate. This will help you easily identify the traders you wish to copy, and obtain all the relevant information on their trading techniques.
Compatible brokers and trading platforms
Most platforms will integrate with MT4 and MT5, while others will have provisions for using their own, or other third-party trading platforms. Whatever platform you’re conversant with, you’ll want to make sure your chosen social platform is compatible with it. Same goes for brokers, as most social trading platforms that don’t offer brokerage services will have a list of supported brokers.
Tips and tricks
Demo account
As a first-time social trader, it is advisable to try out the strategies you wish to imitate on a demo account first. This will help you gauge their profitability before risking your money on them, and will also help you figure out how best to tweak them to your personal preferences.
Diversification
As a rule of thumb, it is always wise to diversify your portfolio when investing. Even in social trading, you should have more than one trader who you take advice from, as well as multiple assets you’re trading. In fact, you should create a network of mentor traders who you can learn from and gain different insights. This minimizes the risk of making a large loss from any one asset or trade.
Conclusion
Social trading is an interactive way of learning the markets, especially as a new investor. It has the obvious advantage of increasing your chances of making a profit even in unfamiliar markets. What’s more, the sharing of ideas among market participants can give you valuable insights into the market sentiment.
