What are the social trading services? Some examples of the most well-known platforms for social trading

What are the social trading services? Some examples of the most well-known platforms for social trading

Socialization sometimes means learning. And the learning sometimes means copying. We, the humans, are the social beings, and we can’t imagine our lives without copying the actions of somebody more experienced then we are. That’s the principle of the social trading – copying the transactions of the experienced traders by the beginners. In this article we will observe this phenomenon of the modern stock market.

What is the social trading?

As we have mentioned, the social trading is a sort of trading where less experienced traders copy the transactions of more experienced ones. It can be used manually through the trading signals or automatically.

Why is it useful?

Many people don’t have enough time to learn trading properly or to trade every day for a couple of hours. So, the social trading, or copy-trading, can be their way to benefit from trading and earn their passive income without spending much time to develop their own trading strategy. They just copy the transactions of more experienced traders through the framework of social trading.

Also it can be useful in education. Following the skilled trader’s strategy 

Why is it useful for signal providers?

“But why the experienced traders allow others to copy their trading strategies”, you can ask. So, they are interested in it. The copy-trading services allow the signal providers, or managing traders, to get commissions from the profits of the traders who copy their deals. The managing traders’ commissions can be up to 70%. So, here the managing traders realize that the more followers their trading strategy has, the more profits they collect. That’s a good motivator to allow these strategies to be copied.

What can be the conditions of social trading?

Social trading can be provided on both special social trading platforms and some traditional trading platforms. For example, the trading platform MetaTrader 5 allows you to copy another traders’ strategy for 1$ per day. 

As we have mentioned, copy-trading can be manual or automated. Also some platforms allow you to copy deals of more than one managing trader. Moreover, usually you can close automatically opened position if you’re not sure that it will gain you profit. 

Examples

So, not to be unfounded and to show you what the social trading services actually are we will show you some examples of the most well-known of them. 

eToro

eToro is perhaps the most well-known service for copy-trading. At least it is one of the first copy-trading services ever created. The eToro company states it was the first one. The name of this firm is devoted to the “bull” trading strategy – buying assets and selling them on the higher prices. Trading conditions of this service are listed below. 

Websiteetoro.com
DevelopereToro
Year of foundation2010
CountryIsrael
Minimum deposit50-200$
Max. leverage1:5

eToro is one of the most popular copy-trading services which unites more than 20 million investors and traders from different countries. So, it is one of the biggest communities of managing traders and beginner investors all over the world. It provides customers with user-friendly interface of the website and their own copy-trading app. eToro service is regulated by 3 several financial agencies: the UK Financial Conduct Authority (FCA), the Australian Securities and Investments Commission (ASIC) and the Cyprus Securities and Exchange Commission (CySEC). But unfortunately it has no automated trading strategies yet.

The trading instruments available here are:

  • Stocks;
  • ETFs;
  • CFDs;
  • Cryptocurrencies.

eToro has mobile app and its own platform for social trading.

HeartBeat

HeartBeat is one of the newest but perspective copy-trading services. It allows automated copy-trading to its customers. it’s important to note that followers can close automatically opened position on their own. The description of the company is here:

Websitehrtbt.co.uk
DeveloperScale Tech LLC
Year of foundation2021
CountryUSA
Minimum deposit
Max. leverage

HeartBeat also allows a system of achievements for managing traders. For example, the service gives an asterisk icon in the managing trader’s profile for 100 subscribers of his or her trading strategy. But unfortunately it doesn’t allow many trading instruments yet. The trading instruments available here are:

  • Stocks
  • Currencies

Also HeartBeat provides a lot of analytical materials about the trading instruments which are available on the platform. It allows web trading only yet.

AvaTrade

AvaTrade is one of the oldest services for online trading and social trading. It has offices in Ireland, China, Israel and UAE and follows the rules of these countries’ regulators, which makes it one of the most reliable brokers all over the world. The trading conditions of it are stated below.

Websiteavatrade.com
DeveloperAvaTrade Ltd.
Year of foundation2006
CountryIreland
Minimum deposit100$
Max. leverage1:400

As for the copy trading, AvaTrade offers a lot of social trading platforms including its own platform AvaSocial. Also this firm has its own mobile app and offers a lot of educational materials. The trading instruments allowed by AvaTrade are:

  • Currencies;
  • Cryptocurrencies;
  • Stocks;
  • Commodities;
  • Futures;
  • Indices;
  • Bonds;
  • ETFs;
  • CFDs.

Summary 

Copy-trading services enable a lot of inexperienced traders to automate their trading and to gain income from the stock market. No doubt it can be risky, but starting to trade on the stock market without proper knowledge and experience is rather more risky than trusting professionals. For the managing traders it can be very profitable, because they gain huge commissions up to 70% of the profits of their followers. Of course it’s not a perfect system, but it can be useful and profitable for both beginner investors and experienced traders. This business includes millions of people, so this means that many people consider social trading profitable and useful.

We have observed only three services – eToro, HeartBeat and AvaTrade – but there are a lot of another ones. Try new or well-tried old social trading platforms, don’t be afraid to change them and perhaps you will find the one that satisfies you as soon as possible.

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