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.
Best social trading platform on the market
Excellent choice of options for crypto traders
High floating leverage + fast execution
Social trading system that works with dozens of brokers
Crowd trading that lets you follow trading trends
Best broker for social traders and crypto traders : 75% of retail CFD accounts lose money.
Best all-around: high floating leverage + fast execution.
Social trading system that works with dozens of brokers.
Crowd trading that lets you follow trading trends.
5.0/5 in this category
Best broker for social traders and crypto traders : 75% of retail CFD accounts lose money
eToro was among the first online brokers to venture into social trading. Its business model based on copy trading attracted more than 13,000,000 traders, one of the largest ones among all brokers. Another benefit is that eToro is among the best cryptocurrency brokers. It features 93 assets, a cryptocurrency wallet for mobile devices, and its sentiment indicator for digital assets based on Twitter activity.
Advanced traders lack trading tools, and eToro does not offer the MT4 trading platform. Therefore, followers mostly copy below-average portfolios. CopyTrader and CopyPortfolios serve copy trading well, making eToro one of the leaders among social trading platforms. It is ideal for millennial traders to follow others using their mobile devices. The pricing environment is higher than most competitors.
5.0/5 in this category
Best all-around: high floating leverage + fast execution
FXTM provides one of the best social trading platforms with more than 2,000,000 clients and an excellent cost structure. It is also one of the most accessible ones with a minimum deposit of $10. Other benefits include maximum leverage of 1:2000, a 30% deposit bonus up to $250, 47 payment options, and the Loyalty Program, limited to $10,000. Big Four accountancy PricewaterhouseCoopers Limited (PwC) confirms the trader-friendly execution statistics. New social traders will benefit from the FXTM guide to increase returns. It maintains one of the best overall trading environments with a limited asset selection.
VPS hosting offers automated traders a necessary tool, and manual traders may use the FXTM Pivot Points Strategy to gain an edge. FXTM provides six add-ons for the MT4 and MT5 trading platforms, ensuring traders operate from a competitive environment, which benefits followers. Mobile traders have a distinct trading platform in FXTM Trader, boosting its appeal to social traders. It became one of the leading social trading providers for traders from emerging and frontier markets.
4.5/5 in this category
Social trading system that works with dozens of brokers
ZuluTrade remains a social trading leader and delivers one of the best social trading platforms to the expanding sector. Followers have more than 25,000,000 strategies to copy, and ZuluTrade lists 35+ brokers that use its technology. It connects to the MT4 trading platform, the market leaders with automated trading solutions, and allows demo accounts to register as signal providers. The compensation structure is attractive for traders to sign-up but remains competitive for followers. ZuluTrade provides excellent diversification opportunities. All trading related metrics depend on the broker, as ZuluTrade is only the technology and services provider.
Trading tools including ZuluGuard, protecting followers from non-performing signal providers, and Automator, offering fully autonomous social trading, present social traders with a competitive edge. The fee-based Combo Plus adds another excellent service. In 2015, ZuluTrade received the EU Portfolio Management License, making it a licensed portfolio management company. Other social trading platforms lack this regulatory approval. It resulted in the 2017 acquisition by Chinese-based Formax Group, positioning ZuluTrade for expansion as one of the best social Forex trading platforms.
4.5/5 in this category
Crowd trading that lets you follow trading trends
Trade360 deploys its proprietary CrowdTrading technology, available inside its WebTrader. It reads like a news feed and alerts followers of trading activity and order volume changes among Trade360 clients. A button allows followers to open a position in the direction identified as the most profitable outcome. The MT5 trading platform offers social traders an automated solution via MQL5 Trading Signals, which comes with subscription fees. Trade360 ensures conflict-free trading with its STP order execution model.
New traders will benefit from a competitive educational section. Despite being regulated in Australia and Cyprus, most social traders will follow traders from the unregulated entity. The minimum deposit of $250 offers maximum leverage of 1:400, but the high fixed spreads result in an uncompetitive commission-free pricing environment. Regrettably, Trade360 asks for a minimum deposit of $5,000, an industry-high, for complete access to products and services. The asset selection remains restricted, except for an average equity CFD choice.
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 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.
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.
A professional-grade trading platform supports all types of traders and offers vast configuration options to suit their style.
Superior technology delivers better performance and improved pricing and order placement, which increases profitability.
Financial markets move fast, and the trading platform must feature lightning execution speed, especially for scalpers and high-frequency traders.
Security is something many new traders take for granted from a well-established trading platform. Always check the provided security features.
Depending on the assets, 24/5 or 24/7 trading is available at all trading platforms.
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.
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.
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.
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.
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.
New traders want to try different approaches, and advanced ones adjust as their portfolio expands. The best platforms offer flexibility so that followers can create the portfolio they desire.
One resurgent trend in Forex trading is social trading. Over the past year, demand from mostly new retail traders to follow traders online has accelerated. Forex brokers across the globe have taken notice and are adding social trading platforms to their product and services portfolio. While following traders and Forex gurus is a simple task, the most challenging part remains to find the best Forex traders to follow. Forex brokers usually maintain a list of tools to help you narrow down the list of signal providers and portfolio managers so that you can find what you seek. Some of the key identifiers are the days the strategy is active, how many followers it has, the average annualized return rate, a risk score, and the assets under management. New traders who wish to follow traders online and copy their trades must remember that past performance is not a guarantee for future success.
Social trading, or copy trading, remains a controversial topic, and the long-term success is debatable. Regrettably, too many retail traders believe that copying well-followed social media Forex traders is a foolproof approach to trading. It is essential to understand that most signal providers are retail traders themselves, and while they may have more experience than a new trader, they are not professional portfolio managers. It does not mean that they are not capable, as a few outperform their competition, but those interested in locating the best Forex traders to follow must conduct their due diligence. It will require a significant amount of research and, ideally, communication with the forex signal provider. Copying a trader where the long-term goals align is paramount to the success of the copied trader and the copier. Always make sure to take a look at different social media platforms, and consider the trading costs in-depth, to avoid using a social trading provider based on popularity rather than merit.
In a sense, choosing a copy trading platform is slightly more complicated than choosing a regular Forex trading platform. In addition to looking at all the usual features, such as regulation, spreads, leverage and pairs offered, it's highly important to look for a platform that has an ample choice of traders to follow, and of course, traders that you feel comfortable with.
The social trading sector features four distinct sub-sectors, catering to various demands of social traders.
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.
In copy trading,Copiers will select a trader to follow and duplicate all trades.
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.
I recommend evaluating the following pros and cons of social trading before deciding if social trading is right for you.
- Collective knowledge gained via the trading community for improved trading decisions.
- Trading histories allows followers to research the right traders to copy and engage with for optimized results.
- Watch & Learn depends on the social trading platform and the level of engagement between traders and followers.
- Confidence-building through active communication with strategy providers.
- Emotion-free decisions as the social trading platforms copy positions from traders to followers.
- Can risk be limited? Unfortunately, no. Social trading carries significant risks to consider.
- 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.
- False sense of security is one significant problem and often results in new traders skipping the educational part of trading. It is a requirement to succeed, irrelevant to the strategy.
- 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.
What is the best social trading platform?
The best social trading platform features a large and active trading community with competitive research tools.
What is a social trading platform?
A social trading platform allows traders to interact, share ideas, copy trades, and discuss financial markets.
What does social trading mean?
Social trading usually refers to copy trading, where members in the community follow traders in an automated trading environment.
What is social trading in Forex?
Social trading in Forex allows followers to copy other traders and participate in markets without learning how to trade. Following traders at one of the best social Forex trading platforms will improve the results.
Is social trading legal in the US?
Social trading is technically legal in the US, but almost no brokers offer it to US persons due to problems making social trading work with US laws mandating FIFO (first in first out) and banning hedging.
How do you use social trading?
You find traders you have faith in, then set your social trading account to copy their trades. Ensure you limit risk and diversify between a range of traders. Finally, monitor the results and be ready to “fire” traders who are not performing as well as you expected them to.