Social trading emerged around 2010 and became a favorite among younger traders who prefer to engage with their community and learn to trade from each other. We've conducted an in-depth review of the social trading sector and identified the best social trading platforms.
- Eightcap, Competitive pricing + excellent daily videos.
- BlackBull Markets, Best ECN trading environment, with scalping and hedging.
- AvaTrade, Highly regulated, choice of fixed or floating spreads.
- Pepperstone, Great ECN execution on MT4 platform.
- MultiBank Group, Deep liquidity with no trading restrictions.
Best Social Brokers Comparison
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Regulators | ASIC, CySEC, FCA, SCB | FMA, FSA | ASIC, BVI, Central Bank of Ireland, FFAJ, FSCA, KNF, MiFID | ASIC, BaFin, CMA, CySEC, DFSA, FCA, SCB | ASIC, AUSTRAC, BaFin, BVIFSC, CIMA, CySEC, ESCA, FMA, MAS, TFG, VFSC |
Year Established | 2009 | 2014 | 2006 | 2010 | 2005 |
Execution Type(s) | ECN/STP, Market Maker | ECN/STP, No Dealing Desk | Market Maker | No Dealing Desk, NDD | ECN/STP |
Minimum Deposit | |||||
Average Trading Cost EUR/USD | 1.0 pips | 1.3 pips | 0.9 pips | 1.1 pips | 0.1 pips |
Average Trading Cost GBP/USD | 1.2 pips | 2.0 pips | 1.5 pips | 1.6 pips | 0.5 pips |
Average Trading Cost Gold | $0.12 | $0.90 | $0.29 | $0.20 | $0.02 |
Trading Platform(s) | MetaTrader 4, MetaTrader 5, Trading View | MetaTrader 4, MetaTrader 5, Trading View | Other, MetaTrader 4, MetaTrader 5, Web-based+ | MetaTrader 4, MetaTrader 5, cTrader, Trading View | MetaTrader 4, MetaTrader 5, cTrader |
Islamic Account | |||||
Negative Balance Protection | N/A | N/A | |||
| Visit Website | Visit Website | Visit Website | Visit Website | Visit Website |
Eightcap
In Summary Competitive pricing + excellent daily videosSocial traders rely on active trading communities where they can share and discuss trading ideas and strategies. Eightcap ranks among the best choices as it connects trading accounts to TradingView, where 30M+ traders engage in one of the largest and most active online trading communities. TradingView also features live streams, and trades get a powerful charting package with swift functions to share Forex charts with the community.
Unlike copy trading, social trading requires manual trade placement. Therefore, social traders benefit from fast execution, an absence of requotes, tight spreads, and deep liquidity, which Eightcap provides in its MT4/MT5 trading platforms.
Pros & Cons
- Low minimum deposit and high leverage of up to 1:500
- Competitive cost structure
- Excellent technology infrastructure and seasoned management team
- Daily research and quality educational content
- Limited leverage in some areas
BlackBull Markets
In Summary Best ECN trading environment, with scalping and hedgingBlackBull Markets was founded in 2014 in New Zealand. Like many antipodean Forex brokers, BlackBull Markets is an ECN broker, offering raw spreads and commissions. They are regulated in New Zealand by the Financial Services Providers Register (FSPR) and offer a maximum leverage on some Forex currency pairs as high as 500 to 1. In addition to their global headquarters in New Zealand, BlackBull Markets also has presences in the form of branch offices in New York and Malaysia. BlackBull Markets offers a relatively tight range of tradable assets: 27 Forex currency pairs and crosses, gold, silver, crude oil, natural gas, and 6 major equity indices. That should be sufficient for those traders with more focused strategies not requiring wide diversification.
Pros & Cons
- ECN/NDD execution model with deep liquidity
- Institution-grade pricing for retail traders via proprietary price aggregation
- ZuluTrade and Myfxbook for social trading
- Leverage of up to 1:500
- Limited deposit options
AvaTrade
In Summary Highly regulated, choice of fixed or floating spreadsAvaTrade is one of the largest Forex / CFD brokers and well-known for offering their clients a choice of fixed or floating spreads. They have a very high and strong level of regulation. AvaTrade is directly regulated in Ireland (and by extension, the European Union), Australia, Japan, South Africa, and the British Virgin Islands. Outside the European Union, Ava offers maximum leverage on Forex currency pairs as high as 400 to 1. AvaTrade offers trading in over 55 different Forex currency pairs, 17 commodities, 20 equity indices, 14 cryptocurrencies, plus 66 individual stocks and shares. 2 bonds and 6 ETFs are also on the menu.
Pros & Cons
- High-quality educational offering via SharpTrader
- Excellent choice of trading platforms catering to various trading needs
- Broad asset selection and cross-asset diversification opportunities
- Well-regulated and trusted broker with oversight from a central bank
- Trading costs competitive but nothing special
Pepperstone
In Summary Great ECN execution on MT4 platformPepperstone, founded in 2010 and headquartered and regulated in Australia, the U.K., and Dubai, is probably the most well-known ECN Forex broker in the world. As an ECN broker, Pepperstone offer raw spreads and low commissions. Taken together, Pepperstone’s “Razor” account offers one of the most competitive costs of trading in Forex that you will find anywhere. In addition to their global headquarters in Australia, Pepperstone also have presences in London, England, where they enjoy full regulation by the Financial Conduct Authority (FCA), and in Dubai, where they are regulated by the Dubai Financial Services Authority (DFSA).
Pros & Cons
- Excellent choice of trading platforms consisting of MT4/MT5, and cTrader
- Market-leading MT4/MT5 upgrade package, Autochartist, and API trading
- Social trading support via Myfxbook, MetaTrader Signals, and DupliTrade
- Leverage of up to 1:30 and superb trade execution
- Demo accounts have 30-day time limits
MultiBank Group
In Summary Deep liquidity with no trading restrictionsMultiBankFX complies with 10 regulators and operates offices in 20 countries, ensuring clients have an unmatched global network with deep liquidity pools across major financial centers and in core emerging markets. Traders get the MT4/MT5 trading platforms, which fully support algorithmic trading, and a proprietary copy trading service. The asset selection consists of 55+ currency pairs and 20,000+ equity CFDs and ETFs, while cryptocurrency traders get eleven highly liquid coins. MAM/PAMM accounts cater to traditional retail account management, VPS hosting to algorithmic traders, and FIX API trading to advanced trading requirements featuring custom solutions. A high-paying partnership program also exists.
Pros & Cons
- 20,000 assets offering broad coverage of financial markets
- Raw spreads from 0 pips and maximum leverage of 1:500
- MAM/PAMM accounts and proprietary copy trading platform
- ECN trading with deep liquidity and no requotes
- Access to raw spreads requires a $5,000 minimum deposit on the ECN account
What is Social Trading?
The emergence of cryptocurrencies and digital assets rekindled the interest in social trading platforms. It followed decreasing growth for several years. Millennial traders who prefer using their mobile phones flood the scene and account for the primary growth sector. Dozens of social trading platforms cater to the growing demand. They offer traders the option to copy their preferred traders with the push of a few buttons. Some communities are active and share trading ideas, discuss financial markets, and offer limited educational content. Others focus more on copy trading without much interaction between traders and followers.
The appeal of social trading attracts many new traders who lack knowledge and resources. Many ignore the fact that between 70% and 85% of retail traders lose money, making social trading prone to copying those losses. A 2015 report by the World Economic Forum (WEF) labeled social trading platform as a disruptive low-cost alternative to traditional wealth managers. According to a 2017 study by St. John’s University, traders with followers are more vulnerable to the disposition effect. It also creates a false sense of confidence among followers and copiers, promotes excessive risk-taking, and result in losses in most cases. While social trading may deliver select benefits, traders interested in using it successfully must conduct their due diligence, possess market knowledge to spot potential mistakes by the traders they follow, and monitor portfolios.
Social trading allows traders within the community to discuss financial markets, share trading ideas, and learn from each other. It is popular among new millennial traders, as it requires limited to no decision making. Social trading platforms enable traders to follow and copy others, but copiers should not ignore the risks associated with this approach. Between 70% and 85% of retail traders operate at a loss. Followers then copy losses across the social trading network.
Selecting a Social Forex Trading Broker
Selecting the right social trading broker will pay dividends to traders. Following traders on the best social trading platforms can improve diversification, lower risk, and elevate profit potential. Social traders must understand the costs involved to calculate their risk-reward ratios. Transparent brokers will list them on their websites, and traders must understand them. The following three will have a direct impact on your profitability.
Spreads & Fees
Many brokers increase the mark-ups on assets to compensate strategy providers. Performance fees may also apply, depending on the social trading platform. All brokers charge swap rates on leveraged overnight positions, but they can vary and make a notable difference. Traders should also familiarize themselves with indirect costs like withdrawal fees and currency conversion charges, in addition to the usual spreads and/or commissions charged.
Minimum Deposit
Traders can often start with as little as $100, but they should select providers with a similar portfolio size to follow.
Deposit & Withdrawal
I highly recommend using third-party low-cost payment processors and locate a social trading platform that supports them.
Ease of Use
Trading is demanding, but the trading platform should not be. A user-friendly and intuitive trading platform can improve trading efficiency and better results.
Configurability
A professional-grade trading platform supports all types of traders and offers vast configuration options to suit their style.
Performance
Superior technology delivers better performance and improved pricing and order placement, which increases profitability.
Execution Speed
Financial markets move fast, and the trading platform must feature lightning execution speed, especially for scalpers and high-frequency traders.
Security
Security is something many new traders take for granted from a well-established trading platform. Always check the provided security features.
Trading Hours
Depending on the assets, 24/5 or 24/7 trading is available at all trading platforms.
Asset List
Once the portfolio grows, traders require a more substantial asset list to achieve cross-asset diversification, take advantage of more opportunities within each class, and keep their risk profile at acceptable levels.
Account Types
Trading from the right account type is as important as the strategy. The standard account is where most brokers offer all features, but it is suitable for traders with a portfolio above $10,000. Traders with less capital can consider a mini account, while a micro alternative is for traders with less than $1,000.
Margin & Leverage
Leverage is an excellent tool for traders if used in conjunction with risk management. A low margin requirement grants more flexibility to traders and results in a competitive edge.
Account Currencies
An account in the currency based on the most traded assets in the portfolio will lower currency conversion costs and currency fluctuations. Advanced traders maintain sub-accounts in numerous currencies.
Social Trading Forms
The best social trading platforms feature all four points noted below to offer traders and followers a platform for success.
Follow & Lead
It forms the core of any social trading platform. It also promotes a greater understanding of financial markets and provides educational benefits for new traders.
Volume
The size of the trading community matters. Diversification and access to various trading strategies will define the outcome of followers.
Amount of Data
Followers must have in-depth data about the traders they wish to copy. It will allow informed decision making and avoid unsuitable or high-risk strategies.
Flexibility
The best social trading platforms offer flexibility so that followers can create the portfolio they desire.
While following traders and Forex gurus is a simple task, it remains challenging to find the best Forex traders to follow. Forex brokers usually maintain a list of tools to help you narrow down the list of potential portfolio managers. Some of the key filters are:
- Days the strategy is active
- Number of followers
- Average annualized return
- Risk score
- Assets under management
Remember that past performance is not a guarantee of future performance. Copying a trader whose long-term goals and risk tolerance align with yours is the best route - avoid using a social trading signal provider based on popularity rather than merit.
Other features that you should consider include:
- Minimum Deposit: - Though many copy trading platforms have a low minimum deposit (perhaps as low as $100), it is important to consider that you will likely need significantly more capital in order to test different trade leaders' strategies and to find which once work best for you.
- Currency Paris: - Not every broker offers trading access to the same currency pairs. If your trading strategy is focused around a specific pair or group of pairs, make sure that an ample number of trade leaders are focused there.
- Regulation: - Make sure to check the regulatory status of any potential copy trading broker carefully before depositing.
- Charges, Spreads and Fees: - While there isn't usually a charge associated with copy trading, there is almost certainly going to be a fee associated with the trade execution. In addition to the spreads which are charged by every Forex broker, some brokers also have withdrawal charges and other hidden fees (such as overnight fees) that can impact the income you'll enjoy from each trade.
How Do I Start Social Trading?
- Decide:
- how much money you can afford to risk
- what type of trading strategies you want to follow
- which asset classes you want to trade
- how much you wish to risk per trade
- Check the social trading brokers listed on this page to create a shortlist that meet your minimum requirements determined in point 1.
- Open demo accounts with your shortlisted brokers and explore the details of their offering. Try to find out their typical spreads, commissions, and overnight fees, and compare them. Regulation is also very important.
- Explore your shortlisted brokers social trading offering. Is there a better selection of traders to follow at one of them?
- If you still cannot decide on the best broker for you by this stage, try to break the tie by considering “nice to haves”, such as choice of trading platform, ease of access to customer support, etc.
- Now you have chosen a broker, continue to trade socially with them in a demo account for several months until you are profitable over a 6-month period. Find the traders you wish to follow by checking their historical metrics and explore allocation methods. Beware of traders with very even returns who never seem to take considerable losses – they are probably using fragile trading strategies or leaving losing trades open to avoid taking losses.
- Leave your demo account and fund a real money account.
Social Trading Concepts
The social trading sector features four distinct sub-sectors, catering to various demands of social traders.
Mirror Trading It allows traders to copy a strategy rather than a trader. More advanced traders use it. Mirror trading requires more capital amid high trade frequency in a fully automated environment.
Copy Trading In copy trading,Copiers will select a trader to follow and duplicate all trades.
Social Trading Traders will discuss and share ideas, but trade placement is manual.
Signals & Tips Many traders publish them free of charge, brokers offer them, and paid-for signal providers also provide them. It is manual trading without interaction between traders and followers.
Advantages & Risks of Social Trading
Advantages
- Trading histories allows followers to research the right traders to copy and engage with for optimized results.
- Confidence-building through active communication with strategy providers.
Risks
- Hidden aspects of the traders who provide signals can add risks. Social trading platforms offer performance details but no information about the capital or diversification of the portfolio.
- Overconfidence usually leads to excessive risk-taking and long-term losses. Social trading sounds excellent on paper but is only as good as the traders in the community.
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