Social trading: answers to questions

What is social trading?

Social trading refers to the art of cooperative trading. And it allows traders to observe and follow their colleagues’ trading strategies and copy them as their own using either copy or mirror trading.

How does social / copy trading work?

When you are in social trading, you either trade in partnership with the trading gurus or use their informed marketing strategies to your advantage. Joint trading involves obtaining trading ideas from professional traders for free or for a fee. On the other hand, using their strategies involves observing their trading behavior and replicating their trading strategies in your account.

Is there a difference between social trading and copy / mirror trading?

Social trading is an aspect of trading in foreign exchange markets that includes direct and indirect forms of joint trading. Copy trading, also known as mirror trading, is a branch of social trading that involves copying the trading strategies and behaviors of professional traders when analyzing the market and replicating them in your trading account.

How do I tell the best professional trader to copy?

Different brokerage firms have specific criteria that they use to identify professional traders. However, some of the factors to consider when choosing a viable copy investor include: 1. Their choice of markets 2. Aggressiveness in trading 3. Adherence to risk management techniques 4. Win rate and largest drawdown.

How Much Do I Need to Do Social Trading?

There is no standard cap on the amount of investment required to start social trading. In most cases, the minimum initial deposit and trading account balances required for copier traders should be set by the brokerage firm of your choice.

Does social trading put my trading account balance at risk?

Yes. While you can get information and even copy the trading strategies of professional traders, your trades are not protected from risk here. They are too often mistaken in their analysis, which puts both of you at risk.

Can I copy trades from more than one pro trader at the same time?

The number of trading strategies that you can copy at any given time depends on the rules of the forex broker. Brokers with the highest levels of transparency such as Myfxbook and Zulu allow you to closely monitor and even follow the trading strategies of more than one professional trader.

Do I always need to use the settings recommended by profit traders?

No, virtually all forex brokerage firms and their social trading platforms allow custom copied strategies. For example, if you feel that your preferred professional trader is overly aggressive with their positions, you can use risk management tools that allow you to customize your position to suit your trading style.

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