Social Trading Networks and How to Join the Conversation

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As social networking platforms like Facebook, Twitter, Snapchat, and Instagram became an integral part of everyday life; it was only natural for that trend to expand into the world of investing. Social trading networks provide a hub for traders to discuss strategies and share ideas. They follow the idea that the market as a whole does a better job at information analysis and price discovery than a single individual. It’s also a good way for new traders to connect with a larger community of people with a similar interest in the markets. Some social trading platforms even allow members to automatically execute trades from the site while giving successful traders the opportunity to earn commissions when followers copy their trades.

There are numerous social trading platforms, and each one is a little different. So, it would help if you looked at several to see which one best meets your needs. Here are a few of the most popular social trading networks.

1. eToro

eToro launched its WebTrader online trading platform back in 2009. The social trading component and CopyTrader features have been available since 2010. In 2015 eToro Integrated both WebTrader’s online trading capabilities and OpenBook’s social trading features into one intuitive and innovative interface.

A mobile version is also available for Android, iPhone, and devices. eToro combines the best of social networking in one location. It provides educational content and analyst reports for investors looking to research possible trades. There is also an active community of traders posting about the market and their trading strategies. You can follow your favorite traders and even set up your portfolio to automatically perform the same trades as them. Since eToro is also a brokerage platform, you can also trade through their network.

If you want to try eToro, there is a fully functional demo account available to use until you are ready to sign up and start trading. You can open an account with as little as $200, but eToro offers various incentives for investors to open an account with a higher balance. The eToro platform lets you trade currency, stocks, indices, commodities, and ETFs. You don’t pay any fees for trades other than the bid-ask spread and broker roll costs for keeping a trade open overnight.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

2. Ayondo

Ayondo was founded in Germany in 2009 and is one of the biggest social trading networks in Europe. Since it is based in Europe, Ayondo allows traders to open accounts in Euro and GBP in addition to USD.

Traders in this network tend to be focused more on day trading than in executing long-term investment strategies. Since Ayondo is also a brokerage platform, you can enter trades directly through their system. This is especially helpful if you want to follow one of the successful traders in the network. Ayondo will automatically execute their same trades in amounts proportional to the money available in your account.

Ayondo not only lets you copy other traders in the network but also let you earn money based on the success of your trades and popularity of your profile. Traders are ranked based on the time they are members, the number of trades executed, risk management, and portfolio performance. Ayondo has a free demo version available, so you can test it out before committing any money to the platform. To start trading, you’ll need to put at least 100 Euro into your account. You’ll pay the broker spread for trades executed as well as an additional fee for broker roll costs.

3. Tradeo

Tradeo launched its social trading platform in 2012. Initially, traders could only access the platform through an existing brokerage account, but now all trades can be executed through the Tradeo platform. You, however, can place trades for foreign exchange and contract for difference derivative securities. One of the things that Tradeo does well is making it easy to trade from within a research screen. There are trading options from within the social networking screens as well as the charting screens.

Although you can find and follow successful traders, you cannot automatically copy their trades like you can on other platforms. Also, Tradeo doesn’t pay commissions to traders who share their trades. You can get a fully functioning account for free if you want to see what you can do with Tradeo, but you’ll need to open an account with at least 250 EUR/GBP/USD to start trading.

4. Tradency Mirror Trader

The unique feature of Tradency Mirror Trader is that you can enable full, automatic mirror trading or semi-mirroring. When you allow semi-mirroring, you’ll get an alert when specified accounts place a trade. You can decide which trades you want to mirror and which ones you do not want to make. Tradency has a mobile app available, but it has limited functionality.

Unlike some of the other social trading networks, Tradency is only a software solution and not a brokerage platform. To use the system, you must have a brokerage account with one of the 40+ brokerages worldwide that pay to subscribe to Tradency. If your brokerage connects to Tradency, however, you’ll be able to use the platform to trade currencies, stocks, indices, commodities, contract for difference (CFD) derivative securities, gold, silver, and oil. Although anyone can share a trading strategy with other Tradency users, only those from traders with proven records are available for others to see.

5. ZuluTrade

Like Tradency Mirror Trader, Zulutrade is a social trading network but not a brokerage. To place a trade through the platform, you’ll need to sign up for an account with one of the 40+ worldwide brokers who support the Zulutrade software. You can follow and mirror trading strategies in foreign exchange, commodities, CFDs, indices, gold, and silver.

Zulutrade has a unique feature incorporated into its social charts. While looking at a security’s chart, you can make comments and discuss the chart with other users. So, you can interact in real-time with other users as market events happen. Zulutrade ranks traders based on historical performance, risk management, and follower comments. It is free to open an account with Zulutrade, and it is also free to follow traders on the platform. The only fees you have are those that your broker places on your account.

If you don’t want to open a new brokerage account but want to utilize a social trading network platform, check to see if your broker subscribes to Zulutrade or Tradency Mirror Trader. Of the two, however, Tradency has a greater number of securities and trading options. If you are willing to set up a new account, look at Ayondo, eToro, and Tradeo. eToro requires that you open an account using USD, but it also provides the highest number of options to traders. eToro has a web platform as well as an app, and you can execute trades in a wide variety of securities. You can follow other traders or share your strategies and earn bonuses for gaining a social following.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

For additional info, contact eToro at info@etoro.com

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