Trading CFDs involves a significant risk of loss that may not be suitable for all investors. Please ensure you fully understand the risks and take appropriate care to manage your exposure.
For more information please read our Risk Disclosure

Trading CFDs involves a significant risk of loss that may not be suitable for all investors. Please ensure you fully understand the risks and take appropriate care to manage your exposure.

Social Trading – Learn the Basics

Learning Social Trading

When it comes to financial trading, as with nearly every other human endeavor, the internet has leveled the playing field by providing online traders with all the information and tools required to make in an intelligent investment without needing the services of an investment broker. In addition, the online world has drawn us all closer – empowering people to form interest groups more easily, take action in an organized manner, and harness the power of the crowd by harvesting its knowledge, experience and news-awareness. Below is an example of a social trading platform for purposes of proving an example. Please note that Alvexo does not offer Social Trading at this time. The trader has the option to watch another trader make trades, or the trader can copy the exact same trades. Either way, the trader is given a window into the world of social trading. As you can see, some platforms provide the trader with information on how many people have copied this particular trader, as well as allow you to make the same trades.

Log in to trading portfolio

After the internet opened the way for retail investors to invest online, it would only be a matter of time before social trading for Forex traders would generate a revolution and enable investors to discuss trading opportunities and investment strategies with other like-minded individuals. Social trading would now provide an opportunity for like-minded traders to observe the successful ones, to use their trading history and it would enable them to even copy and profit from their success.

The Social Trading Frame

Notice that the social trading frame itself (located on the right of the screen) is comprised of two smaller frames. The top one displays top ranked and spot-lit traders. Community members are ranked based on their profit-loss ratio and how long they have been members; you can also see how many investors are copying their trades. The social stream window below is a running stream of activities covering all traders, which may be focused upon the activities of top traders only.

Social Trading Frame
Example of Social Trading on a Web-Trader


Which Trader Should You Copy?

When clicking on an individual trader's username, that trader’s profile should open, depending the social trading platform that you are using. It will include the trader’s profile, portfolio and positions tabs, as well as a community tab and – in the case of traders other than yourself – a copy tab.

Social Trading Profile
How to copy a trade: view a social trading profile


The profile tab displays a graph and table showing success rate, best and worst positions and more; the portfolio shows a current pie chart of current investments; the community tab shows who is copying or watching that specific trader, and who the trader, in turn, is copying and watching; and the copy tab enables you to begin watching or copying that trader. If the latter, you must define total equity devoted to that trader’s actions or define a fixed size per positions you intend to copy. Once a position is opened, you can manually change the stop-loss and take profit orders. The position will then appear in your regular positions frame (not under social) as either open, closed or pending. It is important to remember that you must personally close a copied position (or wait for the TP/SL order to be fulfilled) – it will not close automatically when the copied trader closes the original position. After all, social trading is not a robot: it does not enable you to simply copy and forget, but requires at least as much attention and responsibility as any other personal financial endeavor you undertake. Note: each social trading platform is different and you should consult with the Forex broker that you use for more clarification about opening and closing a trade based on social trading.

How Social Trading is Changing Landscapes

Social trading of forex, CFDs, commodities, indices and shares is increasing trading volumes dramatically. It is shortening the learning curves for novice traders who can now compare the basics of forex trading with the activities of experienced traders. Moreover, it is rapidly changing the face of financial trading in general; and many analysts today speak of a third form of analysis forming alongside fundamental and technical analysis – that of a “transparent real-time data feed”, which portrays the actual decisions of traders in the network. More than anything else, it has opened the gateway for many potential investors who otherwise would have felt intimidated by the thought of venturing forth into a playing field populated by the giants of industry and banking. By networking the knowledge and abilities of each specific investor, social trading provides individual traders access to the power of the masses – a force that equalizes, empowers and delivers.

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