Social trading is widely used nowadays by the majority of traders who either do not have the time to spend on their PCs or prefer to follow professional traders.
But is social trading an easy task to do or is it more than that?
When following other traders this is also considered to be a strategy. Followers should always have in mind whom to choose to follow, the level of investment, such as leverage and lots size, and the tactic that is to be implemented when diversifying among different traders.
Therefore, social trading is not only about following successful or professional traders but it is the skill to follow the right people.
Social trading requires talent and skills
Social trading is more of a talent in identifying which trader best fits your trading style, investment characteristics, and objectives.
Those who are willing or aim to become followers of pro traders must have in mind the following parameters that could make their ”following” journey a pleasant trading experience:
Choose the right broker
- Choosing the right broker is vital. Ensure to trade with a broker that offers good spreads, is an STP, and has the speed when executing your orders or when having requested to deposit or withdraw funds
Invest a decent startup capital
- Do not fund your trading account with tons of money but start with an appropriate amount until you get familiar with the ”following” techniques and social trading activities. A $500 – $1000 balance to start with is perfect
Choose which traders match your needs
- Choosing the right traders is the key to one’s trading success as a follower
Spread your risk wisely when following different traders
- Diversifying your portfolio is a skill. By being able to spread your risk among different traders is an exceptional way to manage your portfolio