What is Social Trading and how can you use it to make money

The short explanation is that Social Trading is basically a way to copy trades from another trader.
In this article I will talk about what social trading is exactly, what to look for in choosing a good trader to copy trades from and how you can make money from social trading.

Is social trading a good idea?

Social trading can give many traders a chance to make money from their trading accounts if they aren’t capable of trading themselves.
Trading is a very difficult business to master and successfully earn money from trading efforts but using the right social trading service,
(also known as trading copying) a beginner or novice could reap the rewards from the efforts of a professional trader.

The social trading system is typically an EA (expert advisor) or in some cases a web based platform that you connect your trading account to.

In the case of an EA, the system is typically known as a trade copier EA and it’s installed onto your MT4 account (most trade copier EA’s work on MT4 or/and MT5)
and once you have it connected to your trading account and you’ve selected the lot size you want to use, you simply sit back and let the
experienced trader do all the work.

You don’t have to execute a single trade to earn profits since the experienced trader will be doing all of the work from finding a valid trade signal,
confirming the trade and then executing the trade. From there, the trader that you are copying trades from will also manage the position whether it means that the
trade should be closed due to a change in analysis or the trade has hit it’s profit target.

(there are black box trading systems that work all by themselves and typically there is no one to confirm or validate the trade signals before a trade is executed
and I highly recommend avoiding these black box systems, most of them blow up trading accounts)

How you can profit from using social trading?

When you have found a reliable trader to copy trades from and you have the system connected to your trading account, the experienced trader manages all of the trades.
(In many cases you can still execute your own trades at the same time without interfering with the experienced trader who is also executing trades for you)
Once the trade has been closed out (preferably with a profit) the money is yours to keep.

Normally with a trade copier EA system, there is no profit sharing so you get to keep all of the profits excluding the fee in paying for the trade copy service.

Some clients who use this trading copier EA system will withdraw their profits at the end of each month, some don’t take any money out and let the profits roll over month
after month to grow their trading account and they increase the lot size based on their money management strategies.

Either way, finding a good social trading service/ (trade copier service) is a great way to grow your account and earn profits without ever having to execute a trade yourself.
It’s also a great way to learn some of the trading skills and habits of the professional trader who is executing all of your trades as you can see all the trades in real time
and you can study the execution of each trade, how and why the trader entered the trade and where they closed the trade.

How to find a good social trading service?

The first thing I tell anyone who asks me about social trading or how to find a good trading copier service is look for a trader who has experience!

Not one year or two years… but typically traders who have a limited amount of experience, they will post on their websites that they’ve been trading for
“many years” without specifying the exact number of years they’ve been in the business.

As I mentioned earlier, trading is a tough business and anyone who has made it though the testing and challenges and can produce consistent profits, they are
very humble but proud that they made it. So they will tell you exactly how many years they’ve been in the business.

Another thing I would look out for is people who call themselves “professional traders”. While everyone is entitled to their own opinion, I consider someone a professional
trader if they’ve traded for others (investors) and successfully returned consistent profits to their clients month after month and year after year.

Also, stay away from the people who claim to be professional traders but spend most of their time posting pictures of themselves next to expensive cars or shopping or vacationing
without sharing the details of their trading strategies and what kind of experience they actually have.

Finally, if you find someone who you think might be able to earn you a decent profit month after month, and you have a few unanswered questions, send them an email and ask
them to specify what trading style they use, where they got their education and how many years full time experience do they have?

If the trader is legit, they should have no problem with answering these questions. And their answers should make sense.

After all, you are trusting someone to execute good trades and you should know how they trade and if their trading philosophy resonates with yours.

Final Note:

All trading involves risk and at some point the trader will likely experience a loss. You must be prepared for a loss and that’s all part of the game but
a good trader, a professional trader knows how to manage the loss so it doesn’t do damage to the capital available in the account and they can typically
earn the loss back on the next trade or two and then they continue forward. This is provided the trader knows what they are doing and has the skill to trade
in all market conditions.

You must also know how to correctly use leverage/lot size that is appropriate for your trading account.
If you don’t know what lot size you should use I always recommend contacting your broker and ask them, rather than ask a stranger online in a forum.

#socialtrading #tradesignals #tradecopierEA #forextradecopier

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