Social trading is one of the fastest growing trends on Stocks, Forex, and other financial markets. But despite a growing number of social trading platforms there are still a lot of traders wandering (1) What is social trading? (2) Why is it so popular?” and (3) How to find the best social trading platform? Here is a simple guide that will answer your questions.
Social Trading: What Is It?
Social trading is a service that permits replicating the operative of experts’ traders. It generally requires little or no knowledge about financial markets, and just requires that the user make a right selection of traders to follow.
Tips to Find the Best Platform
- Size and Number of Users: Studies show that social trading network which offers a large number of trading techniques and styles give a greater opportunity for all participants to create their own balanced and profitable trading platform. So, before choosing any social trading platform, make sure that the platform has enough users to help you meet your goals.
- Tradable Financial Instruments: When choosing a social trading platform, it’s essential to consider the range of assets offered for trade. This is a pivotal factor since it will influence the level of diversification that speculators and investor can accomplish.
- Commission and Spreads Structure: Social platforms usually charge more commission on trades as compared to the retail broker. Though the difference is not much and social trading platforms exhibit greater benefits, you should choose if the cost is justified. Take your time to compare the commissions and spreads structure of different platforms before choosing the best one.
- Transparency: The most important factor to consider when choosing a social trading platform is transparency. This is the place where social networks can get very tricky and presents data in misleading ways. Do you thorough research before choosing any platform.