Social trading continues to gain momentum. Uncertainties on the economic front coupled with inflation have attracted many investors to this practice allowing each investor, novice or experienced, to replicate a portfolio. It is still necessary to understand the workings of it.
Trading in the age of social networks
An innovative and digital principle
If the subject of social trading interests you, there is no doubt that you are already a social media aficionado. In this type of training, the basic principle is to apply what made the success of social applications, to the financial markets. In other words, you will be inspired by the strategies of experienced traders by replicating their positions over time.
The different forms of social trading
There are mainly three forms of social trading:
- copy trading : fully automated. Here, all the positions taken by the trader are reproduced identically in your portfolio, respecting your initial criteria.
- Trading signals : transmitted mainly through a Telegram channel.
- Packaged products: portfolios of assets selected beforehand, and which can be copied freely or in a controlled manner.
Copy trading. Presentation and limits
Copy trading consists of identically replicating the portfolio of an experienced trader or an investor who is on the rise on social networks.
Nevertheless, copy trading remains risky, with the same issues (benefits/risks) as traditional trading. Admittedly, you are confirmed in your choice of allocations and trades, via the endorsement of an exegete, but that does not protect you from taking a broth on the markets.
Also, remember that the stock market is driven by external factors, not just the talent of a proven financial market trader. The markets are also sensitive:
- growth statistics,
- statements by the Federal Reserve or the European Central Bank,
- unemployment figures…
In the end, even by copying the positions of another person, you can drink a bitter potion, in the end, at least, if you have not trained yourself beforehand. This is especially true if you use leverage without understanding the ins and outs.
Social trading: in which markets to invest?
With social trading you can invest in:
- the actions,
- raw materials,
How does social trading work?
You have already understood that it is easier today to become a social trader thanks to the emergence of new fintechs, including Avatrade is one of the main ambassadors.
Avatrade, is one of the first Forex trading in France allowing you to use a platform of comprehensive social trading or simply adopt a few features. It’s up to you.
You can use a platform integrated social trading with the function of mirror trading. So if a trader executes an order, you can automatically copy that position. The interest for the reference trader will you tell us? It’s very simple: that of perceiving popularity and emoluments.
How to get started in social trading now?
Avatrade offers a platform for copy trading allowing traders, experienced or beginners, to participate in the financial markets.
The platform makes it possible to ensure that their transactions of online trading be carried out by experienced traderscompanies and seasoned professionals who have proven themselves by winning thousands of transactions.
Nevertheless, before starting in social trading, here are some tips:
Better find the optimal social trading site!
You might as well push open an open door: you will have to choose a licensed and regulated broker completely secure. Avatrade, for example, ensures that its clients’ funds are held in segregated accounts with major international banks. As a reminder, Avatrade is approved by five different international regulations.
Zulutrade, the platform to get started in social trading
Avatrade offers one of the best copy trading platforms in 2022: Zulutrade and MQL5 signal services, which are easily accessible to all traders, even beginners.
Choose your signal provider
Once your account is active, the platform copy trading generates a list of signal providers, which will help you in your choice of trades. This strategy should pay off, at least if you stick to a few important steps like:
- the goals you want to achieve,
- the financial instruments you want to trade,
- the amount of capital you can lose…or not!
Once you have honestly answered these few questions, everything will become easier on Avatrade.
Social trading on MT4
Additionally, the trading platform, Metatrader 4 or MT4has a function called “customer sentiment” which will allow you to study both:
- market sentiment
- historical charts showing the past performance of other traders.
This service allows you to display the percentage of traders who hold or have held an open position to buy or sell on a specific asset.
With Avatrade, you can have access to your social trading on IPhone or Android, tablet, PC or MacBook. All you need to do is sign up and start the social trading adventure. Avatrade is a easy to use trading site and opening the account is intuitive, simple and fast.