Social Trading

Social Trading has revolutionized the way people invest by integrating social interaction into stock trading. It allows both new and experienced traders to learn and copy the strategies of successful investors. But how does it work, and what are the risks and benefits?

3 min.

Copy Trading Wiki

Social Trading is a form of investing that allows people to observe, interact, and copy the trading strategies of experienced traders.

Unlike traditional individual stock or crypto trading, where decisions are made solely based on personal research and analysis, social trading involves the collective ideas and real-time market action of a community of traders. This approach is especially popular in the forex and cryptocurrency markets.

Social trading platforms function as networks and communities where traders can share their market ideas, discuss strategies, and follow top-performing investors.

Users can manually copy specific trades or use automated copy trading tools that copy another trader’s positions in real time.

Lead Traders (Signal Providers): experienced traders who share their trades and strategies with followers.
Followers (Copy Traders): Investors who copy the trades of selected experts.
Trading Community: A platform where traders share information, ideas, and strategies.
Performance Analytics: Transparent data on the historical performance of traders, helping followers choose the best ones to copy.

Accessibility for Beginners: Allows new traders to participate in the financial markets without having extensive knowledge and sufficient practical experience.
Time Saving: By following the decisions of experienced traders, it eliminates the need for in-depth market research on their own.
Investment Diversification: Users can copy multiple traders to spread their risk across different strategies.
Real-Time Learning: Provides an interactive environment where traders learn by watching real trades.

Market volatility: Social trading does not eliminate the risks associated with fluctuations in liquidity and market prices.
Over-reliance on others: Copy traders may blindly follow without understanding the reasons behind the trades.
Volatility of results: Even successful traders suffer losses, and their past results are no guarantee of future results.
Platform reliability: Some platforms may have issues with the speed of trade execution (leading to “slippage”) or transparency.

Here are some of the most well-known platforms that offer social stock/crypto trading functionality:

eToro is one of the pioneers of social trading with a user-friendly interface.
ZuluTrade allows users to copy traders from different brokers.
NAGA offers a combination of social trading for cryptocurrencies and stock investing.
Bybit Copy Trading is a growing platform focused on social trading for cryptocurrencies.

Despite the close connection, social trading and copy trading are not identical.

Social trading focuses on interaction and learning between participants, while copy trading is more about automation, allowing users to mirror trades without manual input - thanks to the functionality of the service or exchange, their exchange deposit automatically copies the operations of selected experienced master traders.

Copy Trading vs Social Trading Compared
Comparison parameter	Copy Trading	Social Trading
Method of Execution	Automatic copying of trades	Decisions are made by participants based on common ideas
Community Role	Interaction between participants is minimal or not required	The key importance of focusing on collaboration
Importance of Learning	Lower: ideal for beginners	Higher: encourages active learning
Customization	Limited: mirror copies of expert strategies	High flexibility: users can adapt approaches
Transparency	The functionality is aimed at tracking the performance of experts	Focus on collective learning and sharing experiences and ideas

Social trading involves discussion, analysis and shared decision making, while copy trading is a subset of this approach that focuses on passive investing using software automation capabilities.

Copy Trading Guide - We explore Copy Trading as an investment method and share best practices, resources and information.