8 popular social trading platforms.
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Created: July 10, 2020 Updated: November 9, 2022.
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CAUTION : This article is for informational purposes only and should not be construed as investment advice. We also warn that automatic trading is of high risk. In addition to technical issues, there may be a human factor on the side of a followed trader.
Social trading is a fusion of social networks and online trading on the financial markets. It boils down to copying (mirroring) experienced traders’ deals. Unsurprisingly, it has quickly gained traction with novice traders as it does not require sophisticated decision making. Yet keep the risks in mind. Social trading platforms are the gateway to this approach.
The most challenging thing is to choose a befitting signal provider to follow. By selecting the right trading platform and signal providers, duly dealing with risk management, one can raise profits, or at least prevent the loss of deposit funds. For financial terms, notions and specifics – find the FAQ section at the end.
3 trading concepts and differences.
Mirror trading, social trading and copy trading are often confusingly thought of as the same thing. Let’s elaborate on the actual differences.
In mirror trading an algorithmic trading strategy (robots) is applied. In case you loved this article and you would like to receive more details relating to
binary option copy trade kindly visit our own web page. Transactions take place on trading servers, not on the user (investor) side. A user evaluates automatic strategies, selects one, and monitors it in his account.
Copy trading is similar, except users follow real traders who share signals via a trading platform that logs all transactions. An investor views it and chooses to repeat whichever action. A trader sending signals is called a signal provider, though he can use an auto-trading bot as well. Transactions take place on a trader’s device.
Social trading is a common umbrella term for copy and mirror trading strategies. We may perceive it as an exchange of ideas about markets and trends. Traders share their insights and operations, comment on the actions of others, etc. It mainly takes place in social networks, instant messengers, and niche websites such as TradingView .
The best platforms for social trading.
We’ve selected 8 diverse social trading platforms in terms of trading concept (mirror, copy), regulation (UK, USA, Cyprus, etc.), minimum deposit requirements ($1, $200, $500), signal providers (dozens to thousands).
#1 eToro.
Warning . 68% of retail investor accounts lose money when trading CFDs with eToro. You should consider whether you can afford to take the high risk of losing your money. Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees. Also, this content is not intended for US users. eToro USA LLC does not offer CFDs, only real Crypto assets available.
eToro Group Limited was founded in 2007 in Cyprus (with offices in England and Israel). Positioning itself as a web-based trading platform, it is primarily a CFD and Forex broker, and, one of social trading platforms since 2016, inherently. It’s Copy Portfolios feature involves Machine Learning technology to optimize performance.
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Unlike most copy trading platforms, eToro does not offer signal providers and brokers separately, eToro is a broker in itself. Despite regulation in the UK (FCA), Australia (ASIC), and Cyprus (CySEC), eToro is not listed on any stock exchange, does not provide annual reports, and does not have a parent bank.
To start working, one has to bring a minimum deposit of 50 USD. For US clients are available only real Cryptos and ETFs products only. Statistics for each signal provider is open to each user, and it is informative and visually pleasing.
eToro warns that social trading tools it provides are just for informational purposes. Also, we like the fact that it actively cautions about the risks of losing savings. However, the inability to limit the risks when copying signal providers is a significant drawback.
Pros.
Is among top social trading platforms Informative web page Easy to get started.
Cons.
Still in the early stages No risk limitation for social trading.
#2 ZuluTrade.
ZuluTrade was founded in 2007 in the United States. In March 2015, it received the European portfolio management license. ZuluTrade is an online social platform for copy trading, granting access to investment strategies of Forex trading experts, performance ratings. And, of course, allowing to monitor and copy other traders. Trading includes stocks, binary options , goods and indices (NASDAQ).
The platform lets you manage trading with several unique features such as Zulu Guard, Lock Trade, and Zulu Script.
Lock Trade – to check transaction execution after receiving a signal. Zulu Guard – to automatically disable a signal provider if strategy changes. Zulu Script – to create scripts with specific criteria for auto transactions. Zulu Rank – an algorithm ranking traders by multiple factors.
The minimum deposit amount depends on a broker working through ZuluTrade, e.g. AAAFx, Pepperstone, FXCM, etc. Some require as little as $1, yet the average is 200-300 USD ( Broker list ). ZuluTrade also supports MetaTrader accounts. As for fees and commissions, brokers charge a fee for linking an account to ZuluTrade – up to 3 pips .
The distinguishing feature of ZuluTrade is the number of traders to copy. Although we could not find the exact number, it exceeds several thousands, possibly tens of thousands. Another important feature is the ability to create a portfolio of interacting traders who trade similar strategies. A portfolio can also be shared publicly.
There are 2 types of accounts:
binary option copy trade classic – trade as a signal provider and/or use other signal providers, and profit-sharing (follower) – for beginners to copying others. Signal providers receive compensation when followers make profit, and a penalty in case of loss, respectively. Both types of accounts are also available as demo.
To wrap up, ZuluTrade is not a trading platform. Investors connect MT trading accounts to ZuluTrade – available as Android, iOS and web application. It provides statistics and risk assessment.
Pros.
Leading copy-trade service Works with the AAAFx broker without commissions Transparent signal provider statistics.
Cons.
The risk of losing capital Unavailable for US residents.
#3 Darwinex.
Darwinex (formerly TradeSlide) is a British broker headquartered in London and managing social trading assets, founded in March 2012. As any well-regarded broker, Darwinex is regulated by the UK financial market (FCA). It’s social platform is called DARWIN and
it provides both mirror and copy trading tools.
Stats for each algorithm are quite comprehensive. Trader strategies can be evaluated in terms of risk, performance, experience. A great advantage is the risk limiting option available, namely setting a max loss amount per month, e.g. $100.
The signal copy service by Darwinex differs from conventional social trading platforms. As you are invited to copy trading strategies, the initial index is 100, and it increases or decreases (in contrast to Profit/Loss ratio in other brokers).
