How to Social-Trade Like a Pro
Social trading is creating a big buzz across the financial markets right now. By having the ability to see, learn from, and copy the trades of others, new and existing investors gain a lot of insights and can work together in conquering the financial markets they are in.
There are still risks associated with social trading, but even those risks are easier to mitigate. You just have to know how to approach social trading like a pro, and we have the tips and tricks for you to use in this article.
The Right Network
Choosing a social trading network is important because it determines a lot of things about your social trading experience. InvestinGoal.com compiles a list of the top 10 social trading networks, and that list is the first thing you should visit if you want to get started.
You can see multiple social trading networks and the features they offer. Having the important details laid out the way they are on InvestinGoal certainly helps because those details make choosing the right network to join easier.
For example, you know that ZuluTrade is one of the best networks to use if you want to avoid opening a new account or changing brokers. ZuluTrade can be used independently and supports the same advanced features like copy trading and binary option social trading.
Know What to Look For
While a lot of traders are approaching social trading as a way to copy the trades of others, copy trading isn’t the only way you can benefit from the networks. There is a bigger advantage to be gained from actually taking the time to learn about the trades that others make.
You can, for instance, learn about the general direction of the forex market – or a market for a specific currency pair – by taking a look at how top traders in the market open their positions. You can also study market reactions to news and announcements this way.
Using demo accounts from networks like eToro, you can simulate different situations and learn about the things to look for from the traders you observe. It doesn’t take long to start noticing how certain traders approach the market, which helps you to find the right traders to follow based on your own trading style.
Another thing about social trading that you can leverage like a pro is the size of the trades. You have the option to scale your trades based on the traders you follow and how they open their positions. Traditionally, you set a scale and stick to it for every trade.
To boost profitability, however, you can actually scale every position differently. Opening 0.1 lot of one position and 0.5 of another depending on the source of the signals and market conditions can help you bank more pips or points without straining your margin too much.
Be flexible, adapt to the traders you follow and use social trading like a pro. You have so much to learn, plenty of insights to analyse, and more resources to help you stay profitable in the financial markets.