Forex $ocial Traders
 

           

2 Social Trading Tips That Will Help You Make More Money

In this article we would like to discuss few social trading tips you should consider and apply before you start risking your own real money on copying some traders on any social investing network.

Social Trading Tip #1: Test the waters first

It doesn´t matter if you choose eToro, Zulutrade or any other social trading network. Before you put your real money at work we strongly recommend you to test the waters first.  What we mean by that?

Well, in  order to be able to trade or copy trade on social investing network you need to get familiar with the platform and all features it offers.

virtual money

Therefore it is a good idea to try their demo account and play with virtual money for a while. However, it is important to act like you would be trading or copytrading with real money.

That means, if you have $1,000 dollars to invest, allocate only $1,000 on your virtual demo account too. Even if there is $10k or $100k on it.  So if you select couple of traders you would like to copy, only allocate $1,000 to copy them.

This way you will create a similar conditions and feelings as you will have when you switch to a real money account.
Also you will not have any unrealistic expectations as you would have if you traded on $100k virtual account and then switched to a small $1k real money trading account.

Social trading tip #2: Do not put all your eggs in one basket

Social trading should not be gambling. Old saying “Do not put all your eggs in one basket” that applies in classic trading can and should be held in mind also in social trading.

eggs in one basketOften when new copiers see at a performance of top forex trader they feel a strong temptation to take all their trading capital and use it to copy that single trader because they are greedy and want to double or triple their investment as soon as possible. Best in one or two months.

But that can be the most costly copy trading mistake you can make. We have been monitoring top social trading networks eToro and Zulutrade for many years and one  thing we have learnt about social traders is that high percentage of them is able to generate excellent trading performance in couple of months or one year.

Of course that attracts thousands of followers and copiers. But those same “profitable” social traders can very soon blow their trading accounts and also accounts of their copiers because they were using very risky trading strategies that are not sustainable in the long term.

We do not want you to lose all your trading capital, therefore please keep this social trading tip in mind when you will be selecting top traders to copy.

Select at least five copy traders but it is recommended to have even more of them in your copy trading portfolio. Also you need to diversify copy traders by assets they trade. Copying all stock traders is same mistake as having copying only one.

For example, on social investing network eToro people can trade different assets like: Forex, cryptos, stocks, commodities, indicis or ETFs.

So when you will be thinking about who to copy on eToro simply take a quick look at their statistics and check what assets they prefer to trade.

On this screenshot you can see that this copy trader prefers to trade stocks as almost 75% of his trades are stocks.
Some 18% are cryptos and the rest are few ETF, commodities and indicis trades.

Our suggestion to you is to take advantage of our social trading tips and select at least 5 etoro best traders to copy who each trade different asset class. One for Forex, one for cryptos, one for stocks, one for commodities and one for indicis or ETFs.

That way you will lower possibility of losing your trading capital and on the other hand increase your chances to make more money by copy trading etoro best traders or traders on other social investing networks.

Last Words

Social trading can be very profitable but on the other side it hides many obstacles and risks.

If you are only about to enter world of copy trading and investing networks make sure you apply both social trading tips explained above.

If you do so you will avoid many beginner mistakes, protect your hard earned cash and set yourself on the right path of capital growth.

Warning: All trading involves risk. Only risk capital you’re prepared to lose. Past performance does not guarantee future results. This post is for educational purposes and should not be considered as investment advice

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