Social trading: definition

Social trading, also known by other names such as mirror trading, is an online trading technique that has emerged with the evolution of technology. This trading approach is specially designed for novice investors who want to benefit from the experience of professional traders.

It is a social network where traders share trading advice and allow newbie traders to follow their investment strategies. Social trading allows novices to familiarize themselves with market trends, learn new investment strategies and avoid major losses. In short, this collaborative approach makes it easier for new investors to enter the stock market.

The main features of social trading

Social trading is an online trading method that allows investors to follow and copy the trading strategies of other more experienced traders. Here are the main features of social trading :

Social network trading : Social trading is done on online platforms that allow traders to follow the trading activities of other traders, contact them and discuss their strategies.

Trade Copy : The trade copy feature allows novice traders to automatically copy positions opened by more experienced traders, in real time. This feature allows novices to invest without having to perform their own market analysis.

Transparency : Social trading is based on transparency. Experienced traders who are followed by other traders should make their positions, performance and trading history public.

Learning : Social trading allows novice traders to learn from more experienced traders. By tracking their strategies and analyzing their performance, novices can improve their own trading.

Interaction : Social trading platforms offer real-time chat and communication features, allowing traders to discuss their strategies and share ideas.

Copy risk : Social trading involves copy risk. A trader’s past performance does not guarantee their future performance, and novice traders can suffer significant losses by following risky trading strategies.

Choice of traders to follow : Social trading platforms offer a wide variety of traders to follow. Novice traders should carefully choose which traders to follow, taking into account their trading history, experience and level of risk.

Social trading: how does it work?

From the outset, it is important to note that social trading provides easy access to financial markets , especially as you interact with other seasoned traders to find a common investment strategy. As a social trader, you can use a community trading site like eToro, or tap into the information and advice available in stock market forums.

Whatever the technique chosen, the advice of seasoned traders is preferred in social networks. However, we believe it is better to adopt a social trading platform, as it automatically shares trading strategies and tips through the “ Mirror trading ” or “ CopyTrading  ” function. Also, you can subscribe to a professional investor’s channel to receive their positions in real time.

The eToro social trading platform is a pioneer in the field of copy trading , with accounts available in France and internationally. As a global leader in social trading , eToro is regulated by major financial bodies such as CySEC, ASIC and FCA. eToro is also registered as a PSAN with the AMF which allows investors to buy cryptos.

With a user-friendly and simple interface, the platform is also suitable for novice traders. eToro’s innovative copy trading allows millions of investors to follow the positions of professional traders on the platform and replicate their short or long term trading portfolio. The 0% commission fee