Even The Best Suck Sometimes
Social and copy trading is a fast growing segment of the on line investment community. Connecting with traders, sharing ideas and community support are only a few of the reasons why. Primarily it is for the chance to make money. Newbies, inexperienced traders and/or those who simply don’t won’t to worry about can choose to follow and copy better traders while those more experienced can post trades so that others can follow them. Not all social trading is the same and not all social trading platforms have the same features. This is a guide into the things you should look for when trying to choose a platform, and a trader to follow.
- Sign Up – What are the requirements to sign up? Do you have to pay a fee? Do you have to have an account with a “preferred broker”? Once you do sign up what kind of access to do you have? These are important questions to ask. The best social copy trading platforms are free with a simple registration and come with full access. Of course you will have to deposit with a supporting broker in order to use the feature but access to the site should not require it.
- Profiles – Of course there will be some sort of profile but how good is it? I have seen sites where you don’t get much more than a name and a listing of trade statistics. Perfect if you are trading baseball cards but not much help when you want to make money. For real, useful, social interaction a full profile is the best. As a trade copier look for information on the person or companies background, trade history, number of followers, approach to trading and strategy. The more details you can get the better, you do not want to blindly follow any old yahoo off the internet. You should also be sure to provide plenty of information on your own profile, you never know who may want to follow you.
- Forums – Forums are the heart and soul of the social interaction on the internet. Forums allow traders to connect with each other and provides a structure for discussion, analysis, education and trading. Make sure that there not only is a forum, but that it is being used. Look to see how it is structured and if it is actually supporting trader education. This is also a good time to check up on other members profiles to see how the platform is being used by others.
- Educational Materials – What kind of materials are available? Are there any? This can be a sign as to the focus of the platform. A website filled with articles on strategy, tools, trading techniques and other information useful to traders is a sign of a platform dedicated to trader education, not simply making money from your trading.
- Demo Account – A demo account is crucial for traders of any level. I have been trading for over a decade and still use my demo account to test ideas and sometimes just for fun. A social trading network should have an available demo platform so the newbies can test out those traders they wish to follow before dedicating any money to trading. Not only that, demo accounts are invaluable tools for learning and that is what true social trading is all about.
- Copy Trading – Definitely make sure that copy trading is available. You’d be surprised at some of the “platforms” I have run across. The best platform will let you connect to a wide variety of brokers/platforms for trade execution. Some are already attached to a broker so you would have to join up with both to use the platform.
- Trade Management – Trade management is key to any form of trading. Most copy trading platforms allow to follow a trader or group of traders but you do not have much control over WHAT they are trading. If you were to follow TraderX you follow all of his trades, good and bad, regardless of the assets you want exposure to. Look for a platform that allows you to not only pick a trader, but the trades you follow. This way if a popular trader is good at one asset but bad at another you can choose to only follow trades on the good asset.
There is one platform I know of that meets all of these criteria. It is Communitraders 2.0 Binary Options Social Trading Network. This is a full service social and copy trading network with value for all traders, not just binary options. This is the network I use for maintaining the Geek Account, my personal trading blog and weekly tips. If you are thinking about joining a social trading network for any purpose I highly recommend checking out Communitraders.