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As social networking platforms like Facebook, Twitter, Snapchat, and Instagram became an integral part of everyday life; it was only natural for that trend to expand into the world of investing. Social trading networks provide a hub for traders to discuss strategies and share ideas. They follow the idea that the market as a whole does a better job at information analysis and price discovery than a single individual. It’s also a good way for new traders to connect with a larger community of people with a similar interest in the markets. Some social trading platforms even allow members to automatically execute trades from the site while giving successful traders the opportunity to earn commissions when followers copy their trades.
There are numerous social trading platforms, and each one is a little different. So, it would help if you looked at several to see which one best meets your needs. Here are a few of the most popular social trading networks.
1. eToro
eToro launched its WebTrader online trading platform back in 2009. The social trading component and CopyTrader features have been available since 2010. In 2015 eToro Integrated both WebTrader’s online trading capabilities and OpenBook’s social trading features into one intuitive and innovative interface.
A mobile version is also available for Android, iPhone, and devices. eToro combines the best of social networking in one location. It provides educational content and analyst reports for investors looking to research possible trades. There is also an active community of traders posting about the market and their trading strategies. You can follow your favorite traders and even set up your portfolio to automatically perform the same trades as them. Since eToro is also a brokerage platform, you can also trade through their network.
If you want to try eToro, there is a fully functional demo account available to use until you are ready to sign up and start trading. You can open an account with as little as $200, but eToro offers various incentives for investors to open an account with a higher balance. The eToro platform lets you trade currency, stocks, indices, commodities, and ETFs. You don’t pay any fees for trades other than the bid-ask spread and broker roll costs for keeping a trade open overnight.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.