Introduction to Copy Trading and Social Trading
The internet has created numerous ways for people to earn an extra income, and copy trading is one of the fastest growing methods because more and more websites are being created that enable you to automatically copy the trades of other traders and investors in your own account.
The terms ‘copy trading’ and ‘social trading’ are often used interchangeably, but there is a slight difference between each one.
Strictly speaking, copy trading platforms generally allow other subscribers to follow, invest money and automatically copy the signals of other traders, whereas social trading is where people exchange trading ideas, signals and strategies with each other, but don’t necessarily copy their signals.
Nevertheless, for the purposes of this article, I will also use these terms interchangeably because if you join a copy trading platform, you will also learn about different strategies and see how other people trade.
As mentioned earlier, there are now many different copy trading platforms that you can join, but if you are looking for the ones that have the most traders / signal providers, there are only really two that I would recommend above all others:
ZuluTrade
ZuluTrade were one of the pioneers of copy trading because they were one of the first companies to offer this service when they first launched back in 2007, and are still one of the market leaders today.
Their platform now has more than 100,000 signal providers, and it basically enables you to automatically replicate the trades of other traders in your own trading account without having to trade the markets yourself.
The signal providers on this site are primarily forex traders, but ZuluTrade has recently expanded to include cryptocurrencies as well. So your chosen signal providers may choose to trade currencies and / or cryptocurrencies.
The major benefit of this service is that you can subscribe to as many different signal providers as you like completely free of charge because ZuluTrade act as an introducing broker and earn a commission from the spreads, and the signal providers are also rewarded for being consistently profitable.
Therefore if you spend a lot of time going through the trading records and running filters to find the best traders (tip: don’t just pick the top ranked traders), you can find some talented forex and crypto traders who are slowly growing their own account and their followers’ accounts without taking excessive risks.
→ Click here to learn more about ZuluTrade
→ Click here to read a full review of ZuluTrade
eToro
The other social trading platform that is worth considering is eToro because they also have a huge number of traders / signal providers that you can copy (including myself under the name SteadyProfits), and are extremely popular with over 10m registered accounts.
This platform differs from ZuluTrade because it enables investors to buy and sell and get exposure to many different markets, not just currencies and cryptocurrencies, and these people can earn additional revenues by becoming popular investors and enabling other followers to automatically copy their signals.
Therefore copiers can potentially invest in thousands of different traders and investors and earn the same percentage of profits as them without having to make any trading decisions themselves.
So it is possible to make money from a variety of different types of traders, whether it’s forex traders, long-term stock investors, crypto investors, commodity traders or index traders, for example, and because they now offer share trading in addition to CFDs, you can earn dividends from you and your traders’ investments.
Furthermore, you can now invest in CopyPortfolios, which include Top Trader Portfolios that group together traders based on performance, and Market Portfolios that enable you to invest in a collection of similar assets, which is another really useful feature.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% 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.
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