Social Trading Guide

What is Social Trading?


Social trading allows you to watch, follow and copy other successful trades.

Social trading (ST) has become the latest fashionable trend in the world of financial investing. Why has this occurred and what is ST all about? Social trading has the ability to enable traders, without any serious trading skills or experience, to create profits by trading the markets.

ST permits novices to observe what positions professional traders are initiating in real time and provide them with the opportunity to duplicate all trades of interest.

A number of social trading providers even allow their clients to study the trading history of experts in order for them to identify and select their favorites to follow.


The fundamental concept behind Social Trading is basically very easy to understand. Essentially, novices or those, who are still struggling to earn a consistent stream of profits from the financial markets, can look other the shoulders of experts who have proven track records of success. An interesting question to pose is why would professional traders agree to share their hard earned knowledge with strangers? The answer is that social trading providers encourage such skillful operators to do so by offering them substantial incentives. As such, these successful individuals acquire the opportunities to generate a second line of income from their efforts.

eToro Social Trading – Best Social Trading Website in 2013!

>> Read our eToro Social Trading Review Now!

etoro social tradingThis broker was one of the first to exploit the potential of social trading by developing the technology capable of networking traders from across the globe. The prime mission of eToro was to enable investors to combine their individual talents and skills in order to attain new levels of trading experience and success that many had previously thought was impossible.

Many revered authorities on this subject agree that eToro is the front runner in Social Trading as it presently boosts the largest online financial trading community in the world. This broker firmly believes that ST is the future of financial trading. As such, eToro is constantly researching and developing new tools and services that are capable of exploiting this investment mechanism to the full. In particular, innovative features such as GuruFinder and CopyTrader enable inexperience traders to reap rewards by riding on the back of their chosen professionals.

How does eToro Social Trading work?

This broker provides the equipment that enables you to customize your Social Trading experience. For example, if you are new to the financial trading, then you can commence your career by utilizing the following three eToro basic tools.

1.   Watch other Traders

This is the most basic element of ST as eToro supplies you with the live trading feeds of your fellow investors. Essentially, you can exploit this tool to study and identify those professional traders who are most capable of helping you generate a stream of consistent profits. In addition, you can acquire vital insights into strategies, new ideas and market trends.

2.   Detect, Select and Follow

Once you have located one or more experts, you can then use this eToro tool to link yourself to them and follow their trading patterns. Once this task is accomplished, eToro even provides the facilities enabling you to personally contact your selections. If you experience difficulties identifying a suitable professional, then you can consult eToro’s special tool, termed the GuruFinder’ that can assist you substantially in this matter.

3.   Copy Trades

After successfully completing the first two steps, you can now focus on making real money. To do so, you will need to utilize the eToro tool, called Copy. Essentially, this feature allows you to immediately execute any of the positions implemented by your chosen experts. In fact, eToro encourages you to develop a people-based portfolio using its CopyTrader facility which will enable you to recruit a team of professional investors who can trade your entire account for you.

What are the Benefits of Social Trading?

Essentially, ST can substantially reduce the steep learning curve required to successfully master trading the financial markets profitably. In doing so, this technique possesses the potential to substantially expand the client base of people willing to trade the financial markets. Prior to the advent of ST, you would have needed to expend a considerable amount of time and energy learning all the key aspects of trading. Now that requirement has been significantly diluted as all you need to do is study the past performances of expert traders and then select your favorites to follow. Consequently, ST is currently attracting a new breed of investor who wants to make money from the financial markets but without getting their hands dirty.

What is your first step?

If you want to exploit all the advantages of Social Trading then you must initially locate a broker which can provide you with access to this vibrant market. Basically, you will need to study and compare the tools and facilities of these companies in order to assess which one matches your trading aspirations and objectives best. After you registered with your preference, you will then need to make an initial deposit before you can commence trading. However, this sum is quite moderate as it can be as little as £50. Nevertheless, you should consider investing more than this amount in order to optimize chances of success.

Does Social Trading work?

Simply, the answer is yes. Many beginners claim that they have already enjoyed a level of success from leaning in real-time directly from experts. However, similar to all methods of financial speculation, you must understand that there are still significant levels of risk involved. Some social trading providers are presently attempting to counter this serious problem by introducing tools and techniques into their trading platforms that are capable of reducing the risk factor. Consequently, the general opinion is that Social Trading definitely has a place in the world of investing as long as a professional approach is adopted from the outset.

History of Social Trading

Before the advent of the internet, financial trading was reserved for elite traders and large institutions, such as banks and hedging funds, etc. Transactions were primarily conducted ‘over-the-counter’. With the introduction of the world-wide-web, electronic processing really gathered momentum leading to the emergence of a large quantity of on-line brokers. However, novice investors still needed to learn their trade in order to ensure success. The launch of social media sites, such as Facebook and Twitter, has radically changed this outlook as they laid to foundation for Social Trading. Subsequently, a new breed of broker was born that specialized in providing the services needed to perform Social Trading. The first company to take up the challenge was eToro followed rapidly by, Currensee and ZuluTrade to name just a few.

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