As the financial market continues to evolve, social trading platforms have become extremely popular and in high demand by both new and expert traders. However, although there are hundreds of social trading platforms to select, finding the best ones can be quite challenging.
Table of Contents
This guide will give you clues on how to select the best social trading platform, what to look out for, and how to get started. But first, let's find out what social trading is all about.
What is Social Trading?
Social trading is a method of trading that connects traders from different experience levels to interact with each other, gain access to information about the market, closely observe the trading behaviors of experts and even follow their strategies using copy trading or mirror trading.
Social trading often does not require much knowledge about the market as the social trading platform gathers a community of investors and traders and allows them to copy the trading strategies of other successful traders.
Types of social trading
Social trading platforms are different from stock trading apps. On a social trading platform, there are different asset classes and options for traders and investors to choose from. Although their choice would normally depend on their needs, the most popular types of social trading include:
1. Signals or Tips
In the financial market, traders often make important trade decisions by carefully checking the market signals and applying tips from experienced traders.
Signals and tips help a trader to know what is happening in the market and what to do at a particular time. These signals and tips can come from relatively simple sources like a sentiment indicator posted on a broker's platform.
The signals and tips can also come from very complex computer-generated systems that read the market and send out tips to traders.
One downside to this type of social trading is that it does not foster interaction with other traders as there is no room for investors to ask questions. The signals and tips might be difficult to understand, especially for new traders in the financial market who have little to no idea about how things work.
It will be beneficial for experienced traders who are already conversant with market conditions and can give them direct market positions to follow.
2. Copy Trading
This is the most popular type of social trading. As the name suggests, copy trading involves copying the trading strategies of expert traders in hopes of achieving the same success that they had achieved.
This is best suited for new traders who have not yet learned the ropes of trading. It is important, though, to choose a trading platform that is specially designed for copy trading.
Traders utilizing this type of social trading will first need to select a top-ranking trader from the LeaderBoard on the trading platform. Each of their registered trades is also displayed alongside their profiles on the LeaderBoard, making it very easy for traders to determine whose trade to copy.
There are restrictive controls, though, and they monitor the accounts so that traders do not follow someone blindly.
Copy trading is a faster way to trade because it eliminates the trouble of making choices as all a trader needs to do is choose the trader on the LeaderBoard that seems to be the best and copy it.
However, although copy trading gives traders an advantage in the market as they are in effect copying the trades of successful traders, it does not guarantee success. Market conditions and activities vary from time to time, so what worked for one person might not work for another.
3. Forums and Profiles
This type of social trading is especially for those who are more serious about conducting successful trades and learning as much about the financial market as possible.
Forums allow traders to talk to each other and gain much insight about the market from the discussions, and utilizing the information gathered from the comments of other members of the forum can help traders work out how to trade successfully.
The profiles cost to help traders in getting to know each other a little better. To get the most out of this type of social trading, it will be best to select a platform that offers the full biographical information about every trader on its platform, including details about their trading styles, a list of their open and closed trades, and even information about the forums that they frequent, which gives other traders an insight on how successful they are in the market.
A good forum contains thousands of active traders with different sections dedicated to various aspects of trading, including trading strategies, tools, predictions, and tips.
4. Mirror Trading
This type of social trading is very similar to copy trading but there is a slight difference between the two. With mirror trading, traders are essentially following the exact steps that an expert takes.
This includes the exact positions based on algorithmic trading strategies, the same opening and closing times, in an automated system programmed to behave in a particular way.
This type of trading is technically not social trading per say, as there is no social interaction involved in this case. Instead, a trader programs trading bots to execute different transactions when a set of conditions are met.
In conventional social trading, human interaction is necessary for traders to decide when to carry out specific trades. However, in this case, the auto-bots do not need any human monitoring.
On the plus side, chances of a human error happening are drastically reduced as most unsuccessful trades were thanks to human error. However, these auto-bots execute the programmed trades no matter what even when expert traders might prefer to ignore a trade suggestion.
Best social trading platforms in the UK
Here is a list of the top ten social trading platforms available for traders in the UK.
1. eToro — Overall Best Social Trading Platform
Platforms: Web, Android, iOS
eToro is currently the world's largest and most popular social trading platform, as it was the first broker to introduce the concept of social trading.
Launched in 2017, eToro has given shape, awareness, and visibility to this rapidly growing method of trading by introducing groundbreaking social trading features that are unrivaled.
eToro has grown to become a massive global investor community, with more than 12 million registered users on its platform, giving its users the chance to interact with each other as they would in social networking sites like Facebook.
- Diverse trading assets including different cryptocurrencies, forex pairs, ETFs, commodities, and indices.
- Regulated platform
- Copy Trading
- Investor program
- Social News Feed
- Allows users to automatically copy the trades of expert traders.
- Rewards successful traders based on the number of copies they get.
- Highly intuitive interface
- Social news feed to keep in touch with the market.
- A personalized news feed.
- Top-notch proprietary platforms
- eToro charges overnight fees
- Not suitable for traders who wish to trade lesser-known crypto.
- Limited access to technical indicators.
2. IG — Best CFD Broker with Social Feature
Platforms: Web, iOS, Android.
IG is one of the most popular social trading platforms in the UK and offers its users a plethora of top-notch social trading features. Just like several other competitors, IG allows its users to copy the trades of successful traders and make smart investment choices.
- Demo account
- Trade alerts and signals.
- Fully operational and educative Demo account setup.
- Diverse trading account option.
- Access to the IG Community, a forum where investors and traders share ideas and discuss different market opportunities.
- Highly intuitive user interface
- It offers users access to more than 15,000 listed markets to trade on
- Advanced technical and fundamental technical tools.
- Allows the integration of the Sentiment Trader tool on its web or MT4 platform
- Access to several international markets.
- IG is a highly regulated platform with licenses from different financial regulators including the FCA, BaFin, and the ASIC.
- Charges fixed rates for share trading
- High minimum deposit, about £250.
- Technical tools can be difficult for beginners to grasp.
3. NAGA Markets — Investment and Crypto Focused Social Trading App
Platforms: Web, Android, iOS
NAGA is a leading social trading platform in the UK that has more than 600,000 users and 1,500 partners onboard. The platform offers users comprehensive social trading services.
Launched in 2015 and a subsidiary of the NAGA Group, a global fintech company listed on the Frankfurt Stock Exchange, NAGA Markets offers its users access to over 700 tradable assets including crypto, indices, forex, CDFs, ETFs, commodities, and many more.
- Access to a variety of financial markets.
- Multi-device support via including the MT4 and MT5.
- AutoCopy tool
- Trading messenger
- TradingView integration advanced charting tools and an array of technical analysis indicators and automated strategies.
- Payment platform for sending and receiving cash.
- Authorized and regulated by CySEC
- Highly intuitive and user-friendly interface for beginners and pro traders.
- Access to the world's first trading messenger. Users can gain access to their posts, discussions, market insights, news, and trading signals.
- Offers diverse trading platforms, including the MT4 and MT5.
- There is also an excellent AI assistant that helps users to minimize trading risks and promptly take advantage of trading opportunities as they present themselves.
- Wide spreads compared to other platforms.
- Limited range of investment products compared to competitors.
4. AvaTrade — Best for Low Commission Trading
AvaTrade is a major forex and CFD broker with a huge number of users that offers social trading services via an inbuilt feature called AvaSocial. Users can closely follow and copy successful traders, gain access to a variety of signal providers and become a part of the trading community.
- Demo account
- Multiple financial markets, including cryptocurrencies
- Options trading
- Automated trading
- Educational content for beginners
- AvaTrade is regulated by several top financial regulators including the ASIC, the Japanese Financial Services Authority (JFSA), four tier-2 regulators, and one tier-3 regulator.Copy trading is available via AvaSocial
- Highly innovative market sentiment tool.
- The platform allows for Multiple deposit methods including PayPal and Skrill for users from supported regions.
- High minimum deposit requirement
- There is also a dormant account fee of $50 for users that do not trade within a year.
Platforms: Web, Android, iOS
FXTM mainly specializes in Forex and CFDs, including stock CFDs, commodities CFDs, and many more. The broker offers copy trading via its product called FXTM Invest. Investors can select the trader they want to copy based on their set financial goals and the market they choose.
- Diverse Account Options
- Educational materials
- Zero commission trading for currencies.
- Customizable trading platform.
- High Leverage up to 1:1000
- Competitive fees
- The platform is globally licensed and regulated, allowing users to trade with confidence.
- There are several account types depending on an investor's experience.
- Users can sort through a curated list of Strategy Managers to make their pick.
- The social trading platform is fully customizable.
- Customer support is available via LiveChat.
- The copy trading option on FXTM is too limited compared to other platforms.
- There is an inactivity fee of £5 for accounts without any trading within 6 months.
6. Zulu Trade
Platforms: Web, iOS, Android
ZuluTrade is an online social platform for copy trading, granting users access to the investment strategies of Forex trading experts, and performance ratings. It offers some of its social trading infrastructures to other online trading platforms via partnerships.
- Integration with top industry brokers.
- “Combo+” automated investing rather than handpicking traders.
- Affiliate program
- Economic calendar
- Interrupted CopyTrading with the ability to adjust copied strategies.
- UserLists for grouping traders based on performance.
- Chat Forums
- ZuluTrade supports copy-trading for diverse markets.
- The platform offers transparent signal provider statistics.
- Users can enable the option to pay traders only when their position is profitable.
- Responsive customer support via LiveChat.
- Users can invest in funds managed by Zulu’s certified portfolio management team.
- Not ideal for users looking to learn how to trade.
- Only a few cryptocurrencies are supported as Crypto CFDs.
Platforms: Web, Desktop, and Mobile
DupliTrade is an automated trading platform that is highly professional and has a strict trader approval process. Just like ZuluTrade, DupliTrade allows users to open an account with its partners, and then link their account to copy their preferred traders.
- Trading simulator
- Trading signals
- Integration with top CFD brokers.
- Advanced execution mirror trading system
- Algorithmic trading
- DupliTrader’s copy trading platform offers an intuitive and user-friendly interface.
- There are no inactivity fees.
- Traders pass through a stringent auditing process to get listed on DupliTrader.
- Users get access to an active 24/5 customer support desk.
- They also have access to advanced analytics tools to review their portfolio performance.
- DupliTrader doesn’t openly share fees associated with using its service.
- There are fewer traders to copy compared to competitors.
Platforms: Web, Trader Workstation, FIX, MT4 and MT5, Android, iOS
Darwinex brands itself as the “traders exchange.” The platform offers social trading via a list of Strategy traders called DARWINs, backing them with funds to give other investors the confidence to do the same. Users can explore both copy trading and mirror trading options via Darwinex.
- Demo account
- 2000+ Strategies
- Investor account.
- Personalized news feed with customized social trading options
- Professional Accounts
- Analytical tools with advanced insight for investors.
- Darwinex allow users access to multiple signal providers
- The platform offers a £1M deposit protection for investors, as opposed to the usual £85,000 available on other brokers.
- Users can fund their accounts using a variety of payment methods including, Skrill, Trustly, debit cards, and wire transfers from UK bank accounts.
- Darwinex is transparent regarding fees and spreads associated with using their platform.
- The minimum deposit amount on Darwinex is $500.
- The platform doesn’t support crypto CFDs.
9. FBS CopyTrade
Platforms: Web, Android, iOS.
FBS is a popular brokerage platform that claims to have over 14 million users across 190 different countries. Among its services include the FBS CopyTrade feature which essentially makes it a social trading platform.
- Demo and Bonus account
- Commission-free trading.
- Access to a wide variety of international markets.
- Leverage trading
- Cent Account for beginners.
- An easy-to-use and intuitive interface
- The minimum deposit starts at $1
- The platform supports a wide range of deposit methods.
- Customer support is available 24/7 across multiple platforms.
- There is a range of educational materials alongside daily market analysis reports.
- There is no desktop version of the application.
- There are no community forums
10. FP Markets
Platforms: Web, Android, iOS
Launched in 2005 and based in Australia, FP Markets is one of the leading Forex and CFD brokers. Like its counterparts that we’ve reviewed so far, FP Markets offers FP Markets Copy Trading, a social trading platform that lets investors find and follow successful traders.
- 10000+ assets
- Demo account.
- ECN pricing and DMA trading
- High leverage up to 1:500
- Micro-lot trading
- Personal account managers
- Access to multiple financial assets and markets.
- Intuitive user experience across supported devices.
- Excellent customer support system via phone, email, and LiveChat.
- FP Markets supports multiple deposit and withdrawal methods, including cryptocurrencies.
- There is a rating page for assessing traders based on their portfolio performance.
- There is no limit to the number of traders you can copy at a time.
- Only a limited number of cryptocurrencies are available.
- The minimum deposit amount is $100
How to choose the best social trading platform
When choosing a social trading platform, it is very wise for traders to take their time to assess the platform's reliability and the social trading possibilities it offers to its users. A complete examination of the following things can lead you to select the best social trading platform.
Reliability and Regulation
The reliability of a social trading platform is often judged based on the agencies regulating its activities. No top financial regulator will give license to a social trading platform with questionable features and activities.
Traders especially look out for social trading platforms with regulatory approval from top financial watchdogs like the FCA, CySEC, ASIC, and others.
A good social trading platform is fully transparent in all of its dealings. Traders must ensure to choose a platform that provides all statistical data for public assessment and independent audit by reputable auditing firms.
Traders must analyze the trading conditions of any platform they are interested in, including the commissions, order execution quality, trading tools, spreads, and other necessities.
These conditions must be favorable to the particular trade that an investor wishes to participate in and they must be clarified in advance. If the trading conditions are not suitable, it makes the entire trading experience a nightmare and can result in huge losses.
The financial market is highly speculative, with high-risk factors. Therefore, it is important to choose a social trading platform that offers in-depth settings for trade selection and risk management. This will improve chances of success and substantially reduce losses.
The most successful traders do not limit their trades to one asset or market, they diversify their portfolios. So, it is crucial to choose a social trading platform that has a bigger network, a large number of users, wide product offering, and greater reach into different international markets, as they offer better opportunities to their users.
How to begin social trading in four easy steps
After having a clear understanding of what is involved in social trading, it is now time to open an online social trading account. But how? We'll look at four easy steps that you can take to open an account on eToro and start trading immediately.
Step One: Open an eToro Account
The first thing you have to do is to sign up for an online social trading account on eToro. You can either visit the platform's website and click on the "Join Now" button to register or download the mobile trading app on your Android or iOS device.
Then, you will need to fill in your basic personal information including your full name, date of birth, phone number, email address, and National Insurance Number.
Step Two: Verify Your Account
Since eToro is regulated by the UK's FCA, users are required to complete a mandatory anti-money laundering (AML) and know your customer (KYC) procedures before they start trading.
So, after signing up, you will be required to verify your identity and that includes uploading a clear copy of your passport or driver's license and another clear copy of any of your utility bills.
Step Three: Fund Your Account
Once your verification is completed and the account approved, you will then be allowed to make your first deposit into the account.
You can find your account using different payment methods, including a bank wire transfer, debit or credit cards, and e-wallets like Neteller, Paypal, and Skrill.
The minimum deposit that you can make into the account is £150.
Step Four: Start Trading
Once your account has been funded, you can then start trading with your eToro account.
However, if you decide to apply for copy trading, just go to the "Copy People" tab on your dashboard to select any top-performing trader that you wish to follow.
There, you would be able to choose the location, market, amount, ROI, and the rate to stop copying the trader. As soon as these restrictions and conditions are put in place, you can then start trading.
What you need to know before trading
Navigating the financial market can be quite challenging, especially for new traders. But with a method like social trading, the journey becomes easier with even greater chances of success.
But this is a paradoxical point as this same method can result in massive losses if used wrongly. So, here are a few things to bear in mind before trading.
- Do not become overconfident simply because you are copying a professional trader, losses happen.
- Suffering occasional losses is completely normal since the market is highly speculative
- Do not become over-dependent on the traders you are copying, do your due diligence, and stay alert to market changes.
- Take things easy. The financial market is not a get-rich-quick scheme. It takes time to evaluate trades and make smart choices.
- Try to learn as much about the market as possible.
- Social trading is not as easy as it appears. Do not live in the illusion that you do not have to do anything. Put in as much effort as you can.
Are social trading platforms safe?
The safety of social trading platforms can only be guaranteed by the regulatory bodies monitoring the activities of the platform, its security measures put in place to secure users' funds and personal information, and compliance.
The safest trading platforms are ones that are regulated and licensed by top financial watchdogs like the FCA, SEC, ASIC, and others.
Social trading apps that go the extra mile to ensure the safety of users' accounts by employing security technologies like enabling two-factor authentication (2FA), and auto-account locks are among the safest trading apps.
Additionally, they must comply with the mandatory compliance procedures including anti-money laundering (AML), and know your customer (KYC) compliance.
However, it is very important to bear in mind that the regulation, compliance, and top-notch security will neither eliminate the risks associated with the market itself nor will it nullify any bad trading decisions that an investor makes.
Social trading pros & cons
Before deciding to venture into social trading, it is very crucial that traders closely examine the pros and cons associated with this type of trading.
- Quick Access to Trading Information
When trading the conventional way, it might take some time for a trader to complete an analysis of the market. In contrast, social trading gives traders reliable trading information in just a few clicks.
- Earn While Learning
Traders who utilize the social trading method do not have to wait until they become experts in the market before they can start earning. They just have to learn from the smart decisions made by professional traders, what they do in specific situations, how they execute trading strategies, what they do if a trading plan goes wrong, and apply them to their trades, simultaneously earning.
- Emotion-free Decisions
Social trading eliminates the stress of making trade decisions based on emotions since the traders are simply copying the actions of experts in the field.
- Builds An Active Community of Investors
Social trading platforms gather like-minded investors together in one community. This allows them to provide friendly support for each other and help them make more money together.
- Creates a Realistic Picture of the Financial Market
Social trading lets you see not only the gains of professional traders but their losses too. It teaches investors that even the most experienced trader can experience massive losses and gives them a clear and unfiltered idea of what they are getting into and that losses are completely normal in this space.
- A False Sense of Security
Social trading makes some investors overconfident. Due to witnessing the successful trades conducted by expert traders in the market, most investors blindly enter the financial market and mirror every step the expert trader takes, with the conviction that their investment can never be lost.
This overconfidence, however, often backfires when the traders experience huge losses.
- Dependence on Others
With social trading, investors are solely dependent on the actions of other traders and this can cause them to quickly lose their investments if they do not choose who they follow wisely.
Most investors are clueless about what an expert trader is doing when they make a decision, and this causes them to miss out on a good opportunity to learn from the professionals.
- Impossible to Predict the Outcome
To be honest, social trading is just like traditional trading, the only difference is that investors get tips from other traders and follow the actions of experts. But, like the highly speculative market, it is very impossible to predict the outcome.
Success in trading is not guaranteed simply by copying the trades of successful traders because those traders experience losses sometimes too.
- Difficulty in Determining Genuinely Successful Traders
Most perceived "successful" traders often keep their losing positions away from their trading records, giving their followers an illusion of success.
Some other experts may be driven by the commission they stand to receive by acquiring more followers and give half-baked trading signals just to get more followers for themselves.
Is Social Trading Legit?
Yes! Social trading is a legit way to get involved in the financial market. However, it is very important to bear in mind that not every user on your selected platform is an expert. Some comments and posts on the forums and discussion rooms might come from users with very little knowledge about the market.
What is the best social trading platform in the UK?
eToro is inarguably the best social trading platform in the space currently. This trading platform specializes in social and copy trading features with millions of users from different parts of the world.
What is the difference between social trading and copy trading?
There has always been a misconception that social trading and copy trading are the same things. However, it is worth knowing that copy trading is one aspect of social trading. It is often the main feature of social trading.
The general concept of social trading is to create a community where traders and investors can interact and share helpful trading tips and strategies that can work with different trading methods, including copy trading.
Why Do Social Trading Platforms not Offer Crypto CFDs to UK Customers?
The reason is that the United Kingdom Financial Conduct Authority (FCA) has banned the sale of crypto derivatives to retail investors in the region. The ban went into effect on January 6, 2021. Hence, platforms that prevent UK customers from buying crypto CFDs are only abiding by regulatory requirements. Investors who want exposure to cryptocurrencies can either use a cryptocurrency exchange or brokerage service.
How much money can you make in Social trading?
The amount a trader makes from social trading is highly dependent on the amount invested and the trader that you choose to copy. If an investor decides to use copy trading, it automatically means that the trading performance of another investor will determine their success or failure.
Social trading has grown to become a hugely popular aspect of the financial industry and is a very useful system for traders of all experience levels. It is gradually revolutionizing the world of trading as it gives quick access to reliable trading information from top-class expert traders and allows users to earn without first learning how to trade.
However, it also presents users with a new daunting challenge of learning how to effectively utilize it without developing a false sense of security, jumping into risky trades simply because an expert is doing the same.
When these ground rules are established, social trading can prove to be a thrilling experience for both newbies and experienced traders.