Trading market instruments is not an easy task for everyone. If you are a beginner trader just starting on the learning curve you would appreciate the help of expert traders and the opportunity to copy their trades. Social trading is one such avenue that allows you to learn from the approach used by expert traders and use their methods successfully.
The format is increasing in popularity due to the rise in the number of retail investors attracted by the lucrative market liquidity and zero-commission trading benefits. Further, the increase in data transparency revealing unbiased performance reports enables traders to understand the risks and benefits clearly. Let us see more about this innovative platform.
6 best social trading platforms for 2022
What is social trading?
It is defined as an investing method that allows users to copy the strategies of other expert traders. Users who do not have the time to find the right strategies and opportunities will find the social trading format useful. They can observe their peers and experts and follow their methods via copy or mirror trading.
The best part of the format is you need not know about how the financial markets work. You can also save money you spend on hiring dedicated investment managers. A social trading platform denotes a service that allows users to copy the trades of other expert traders enabling them to do social trading.
Review of the best social trading platforms
1. TechBerry
TechBerry is the pioneer in offering over 10% each month amongst social trading platforms. It has partnered with multiple regulated brokers and comes under the insurance of FIDC banks. There are absolutely no losses with the platform as the loss reimbursement can go as high as 100% for the Infinite plan. The neural algoritihm within TechBerry calculates data incoming from over 100k accounts and uses it to create a highly profitable strategy for sustained profits.
Key features
- A free trial is available
- Excellent social trading services
- Minimum deposit starting from $5000
- Neural trading algorithm
- Personal manager to answer your inquiries
- Full loss reimbursement at Infinite
- Brokers are regulated by CySEC, FCA, MiFID, AFSL, and ASIC.
Pros:
- Averages 11% each month
- FIDC insured banks to hold deposits
- Service fees as low as 15%
- User-friendly platform
Cons:
- No information on the strategy
- Only supports MT 4/5 platforms as of now
2. eToro
A pioneer in the social and copy trading field, this broker is based in Israel. The service has more than 10 million users spread over 140 countries worldwide. Users get access to more than 1600 asset classes that include bonds, stocks, commodities, currencies, derivatives, and crypto. It has gained an excellent reputation for providing user-friendly and diversified features. It boasts a huge trader community with features such as comment, like, and follow similar to social networks.
Key features
- Unlimited number of demo accounts
- Excellent copy and social trading services
- Minimum deposit starting from $50
- Zero commission fee on ETFs and stocks
- Wide range of asset choices
- Dedicated crypto trading service
- Is regulated by CySEC, FCA, MiFID, AFSL, and ASIC
Pros:
- Commission-free trading for stocks and ETFs
- An unlimited number of demo accounts
- Plenty of features
- User-friendly interface
Cons:
- Withdrawal fee
- Not for experienced traders
| Minimum Investment Amount: | $10 |
| Withdrawal Fee: | $5 |
| Withdrawal Time: | 2-10 business days |
| Founding Year: | 2007 |
| Customer Support: | Live chat, email support |
Summary for eToro
The best social trading platform provides access to a wide range of assets, and lets you share ideas, discuss strategies, and more. Its security, regulation, and huge community are the major advantages it has over its competitors.
3. FXTM
FXTM is a globally trusted broker trading CFDs, stocks, and FX with members from 200 countries worldwide including Asia, Africa, Europe, and Latin America. It started its copy trading service in 2016. Since the launch, the company has actively expanded its features to enable a user-friendly service. The platform allows users to choose from the accounts based on their individual trading requirements.
Key features
- Access more than 250 financial CFD tools
- Regulated by CySEC, FSC, and FCA
- Commission-free trading
- Cross compatible with mobile and desktop formats
- Zero spreads on all FX major pairs
Pros:
- Supports multiple accounts
- No commission fees
- Well-regulated
- Has plenty of educational guides
- User-friendly interface
- Multiple methods for deposit and withdrawal
Cons:
- Product portfolio is very limited
- Limited strategy managers
| Minimum Investment Amount: | $100 |
| Withdrawal Fee: | $10 |
| Withdrawal Time: | 24 hours -2 business days |
| Founding Year: | 2011 |
| Customer Support: | Live chat, email, phone |
Summary for FXTM
Commission-free trading, a wide range of resources, zero spreads, and multiple supported account types are major benefits for users. Novice traders can benefit from the features offered in this best social trading platform. However, the profit share for the managers is very high, up to 30%.
4. NAGA
Naga provides more than 1000 assets, including FX, stocks, crypto, and CFDs. The company has been providing copy trading services since 2015. It is part of the NAGA Group AG, based in Germany. There are more than 500 thousand active users and passive investors enjoying the services of the company. It offers a proprietary platform and third-party trading platforms like MT5 and MT4 for use from your mobile and desktop. A dedicated mobile app is also present.
Key features
- Regulated by the FCA and CySEC
- Has clients from over 40 countries in Europe and globally
- Offers web and mobile platforms
- Naga Autocopy features lets you find top traders and mirror their strategy and trades
- Provides free trading resources including webinars, ebooks, and tutorial videos
Pros:
- Educational resources
- Wide range of supported assets
- Proprietary platform, MT4, MT5
- Well-regulated
- Has PAMM, MAM, and social trading features for passive income generation
Cons:
- High commission fee on profitable trades
- Not available to traders in the UK and US
- Limited payment method present
| Minimum Investment Amount: | $250 |
| Withdrawal Fee: | No charge |
| Withdrawal Time: | 2-10 business days |
| Founding Year: | 2015 |
| Customer Support: | Live chat, email, and phone |
Summary for NAGA
For beginner traders, there are plenty of benefits that Naga offers. The demo account and simulation feature allow users to try the strategies without risk. Professional traders will also find the services satisfactory, especially the extensive assets, feature-rich web platform, and good leverage. The auto copy feature, the ability to share, learn, and discuss strategies, the wide range of tradable assets, and good support are major upsides of this platform. However, it is not available in many countries, including the UK and the US.
5. ZuluTrade
Being launched in 2007; this is another pioneering broker offering user-friendly services. It is based in Greece and Japan. It offers more than 10,000 traders to select from. The platform has search features that allow you to find the trader that suits your needs. It offers an extensive array of strategies. Important tools that keep the service competitive are Zuluscripts, Zuluguard, and Automator.
Key features
- Provides hassle-free investing via its portfolio management service
- Regulated in the USA, Japan, and EU
- Provides an unlimited number of demo accounts
- Has classic and profit-sharing account features
- No integrated broker is present. Instead, the company partners with several global brokerages
Pros:
- Unlimited demo account
- Portfolio management service for new and seasoned traders
- Multiple copy trading accounts
- Offers more than 30 brokers
Cons:
- Does not have an integrated broker
- High profit-sharing percentage
- No educational resources present
| Minimum Investment Amount: | $100 |
| Withdrawal Fee: | Depends on the broker |
| Withdrawal Time: | Depends on the broker |
| Founding Year: | 2007 |
| Customer Support: | Live chat, email, phone |
Summary for ZuluTrade
ZuluTrade offers an efficient infrastructure for copy trading that allows users to assess the performance of the expert traders and other details of brokers. Social trading features are not as extensive, but newbie traders will find them useful.
6. Vantage
Vantage offers a copy trading feature by pairing with AutoTrade, an account mirroring service that allows you to copy from top FX trading systems. It also partners with Duplitrade and ZuluTrade, besides Myfxbook, to offer social trading. Besides the copy trading feature, the service allows access to statistics and in-depth analysis. Vantage has over a decade’s experience in the market and is based in Sydney. It has more than 1000 employees across its 30 global offices. It offers FX, Shares, Indices, Commodities, and CFD trading features.
Key features
- Low trading fees with its RAW ECN account
- Offers MT4, MT5, Web Trader, and a mobile app for trading
- Education tools related to the FX market, analysis, and Forex trading psychology
- 50% welcome bonus
- Lightning-fast execution
- Free market insights
- Negative balance protection
- Integrated with ZuluTrade and DupliTrade
- Regulated by CIMA (Cayman Islands Monetary Authority)
Pros:
- Has integrated Trading View, ZuluTrade, and DupliTrade features
- Free demo account
- Learning tools
- Regulated by CIMA
- Intuitive trading app
Cons:
- Limited number of supported assets
- Requires a big minimum deposit for active trading with the RAW and Pro ECN account types
| Minimum Investment Amount: | $200 |
| Withdrawal Fee: | $0 |
| Withdrawal Time: | 3-5 business days |
| Founding Year: | 2009 |
| Customer Support: | Live chat, email support |
Summary for Vantage
Vantage is a regulated CFD and FX broker offering low FX fees. It has a beginner-friendly interface with seamless account opening, deposit, withdrawal, and customer support services. The company meets the regulatory and security requirements ensuring a safe experience. However, the service supports only limited assets and has high fees for its ECN accounts.
How does social trading work?
The working method is simple. You get access to the strategies, historical performance, and trading ideas of other traders on the platform. You can search and choose a suitable trader that meets your needs. With a single click, you can copy their activity and use it for your trading. The method works best when you choose a dedicated and reputed platform. A key difference between the conventional fund managers and this format is that the traders you are copying from are using the methods to invest their money.
Is social trading legal?
This form of trading is considered legal in general. However, make sure you check the rules and regulations in your specific region as some countries may have restrictions on certain trading formats like Crypto or Forex.
How to start social trading?
The process is a simple and hassle-free one. Here are the steps you need to complete to start trading:
- Choose a social trading platform or broker
- Make a thorough research on the traders you choose to copy from the recommendations present on the service
- Choose the funds you want to allocate based on the risk level they use for their trading
Social trading, copy trading & mirror trading
Although at the outset, they may look similar, there are subtle differences in social, copy, and mirror trading. Here is a brief description of what each format comprises.
Social trading
In this format, traders use the observations and ideas of their peers and expert traders to make trading decisions. The traders share market research, optimize portfolios and pool funds. Beginners and traders who focus on market trends and sentiment rather than base their decision on technical analysis will find this format appealing.
Copy trading
In this format, automated trading of your assets occurs based on the trades executed by an expert trader. You can copy more than one trader with their balances in a proportional way. The diversification helps minimize losses and makes it easier to try the format on top traders. Most of the platforms help traders to track the experts with the highest ROI ensuring better profits
Mirror trading
In this format, an asset is traded in automated form using algorithmic methods instead of individual trades. To participate in this system, you need to choose certain parameters like risk tolerance, preferred asset, investment objectives, and more. The process involves the use of methods that expert traders use instead of direct copying of the trades of a single trader.
expert traders use instead of direct copying of the trades of a single trader.
With copy trading, you get to use the successful trader’s trades but the platform does not provide a learning opportunity as social trading does. Social trading platforms are more similar to social media platforms so you can learn and hone your trading skills. In the case of mirror trading, you get accurate and predictable results but you cannot choose the signals you want and instead mirror every step of the process.
Things to consider to get much out of social trading
When it comes to choosing the right platform, you need to look into various critical factors as not all services are equal. Every service has its pros and cons. Finding the right one is a difficult task but the list below will help you narrow down the choices and select a suitable service.
Follow reputable traders
Using the knowledge and expertise of expert traders can be effective and provide the desired results only when you choose them wisely. Make sure the platform you choose has many experts and reputed traders that you can follow and gain the needed skills.
Make research
It is important to research the platform you want to use for social trading. Collect as many details as possible on the trading history and performance. It is critical that the service offers in-depth history for all the traders under its platform.
Customize the social trading platform
Since most of the users frequenting the platform do not have the necessary knowledge or experience for skilled trading, the platform should be easy to navigate. A service with multiple social traders tools like search filters can help make your task easier. You should also be able to pick as many traders as you can for copying and fund allocation.
Regulation
Make sure the company you choose is properly licensed. Find out if it is regulated by appropriate organizations such as CySEC, ASIC, FCA, etc. Look into factors like its location, how long it has been in the business, its public listing details, customer reviews, and more.
Demo account
Does the service offer a demo account? Most traders will feel comfortable with a free account to test the service before they risk their capital. A demo can help users grasp the finer points of the process and benefit from real trading.
Payments
The price is one of the deciding factors in using a service. While most services offer the social trading part for free, there will not be any additional fees. However, you will need to deposit a minimum amount in the account you have opened for trading.
Fees and commissions
Choose a service that charges the lowest amount. Although most of the services offer the social networking part for free, you need to pay for the trading. So, make sure you choose a company that has low fees as it will help you a lot if you intend to make a lot of trades.
Ease of use
A friendly interface is very crucial for users. Make sure the navigation is easy with all the important functionalities easily accessible. A clear and concise display is preferred with all the tools under a single page or an easy to configure the interface with multiple trading windows. Ensure the platform provides feeds that are easy to access and are updated automatically
What are the risks of social trading?
When you choose the platform and broker carefully you need not worry about the risks present. Consider services with proper regulation and statistics that show transparency to help evaluate the system. When you choose from the top platforms in the industry, the risks are minimal. However, there are many scam providers who can offer the service. With scam brokers, you will need to worry about factors like
- They are not regulated
- The risks involved are not specified
- They overstate the profit potential
Further, you need to consider the fact that all trading forms are associated with some amount of risk and this format is not an exception. The risk here mainly lies in choosing the right service. By emulating the right traders, you reduce the chance of errors and losses. But you need to bear in mind that the risk is not totally removed even with the most successful trader. The reason is that FX and stock markets are prone to erratic fluctuations that cannot be predicted.
Social trading: Pros and cons
Although social trading brings value to traders with its earning, learning, and sharing experience, it has some weak and strong sides that cannot be ignored:
Pros
- It is best for beginners without any prior knowledge.
- Setting up an account and executing trades is easier
- You get access to expert traders focusing on a diverse range of assets
- Analyzing and learning from expert traders is possible
Cons
- The risk associated with trading are still present
- You need to deposit a minimum amount for the trading
- You may not have a full perspective of the traders you are copying from. They may not share info on the available capital, their full portfolio, etc.
Social trading fees
The expenses involved are not always clearly stated by the vendor. Here is a breakdown of the various costs.
Copy trading fee
Generally, most platforms do not charge a fee for copy trading. You can copy trades of any trader you choose. The services profit from the commission they get for the transactions you make using copy trading. There is no change in the spread irrespective of whether you trade manually or copy trade.
Commissions
A commission fee is charged by some brokers for every transaction you make via their platform. The percentage charged differs from one broker to another.
Deposit fees
Most often there is a minimum deposit requirement that you need to fulfill before you start trading. The deposit fees depend on the broker you choose. Some brokers charge less while others require a big upfront fee.
Withdrawal fees
A small fee is charged by brokers for withdrawal. The charge varies from broker to broker. The process of withdrawal also influences the fees. Wire transfer, PayPal, Neteller, Skrill, etc. are some of the services used for withdrawal.
A final word about social trading platforms
Social trading offers an excellent opportunity for newbie traders to get well-versed in the process and generate profits without firsthand experience. The chances of emotional decisions and expensive errors in trading are minimal with this form of trading. However, you can gain the full benefits of the format only when you choose the best social trading platform available now.
Our list of the best social trading platforms will help you choose a suitable broker that meets your specific requirements. We have analyzed each of the listed services meticulously to find whether they are a good option for traders in search of a reliable service that not only helps grow their investment but also helps them improve their skills.