Trader Compensation

When a trader has other traders copying/following his/her trades, how does the financial compensation work?

Hello Ok4XTrader,

That depends on which social networking platform a trader is using. For example in MQL5, there is a particular subscription cost that a trader has to pay for following a trader. And like in case of zulu trade, you can open up a live account through a broker only and when you open live account through broker, you pay additional cost either in form of spread or commission which is sent to zulu by that broker and then given to the traders who are being followed.

Some pay X amount per round lot traded, subscription, % of spread, fixed cost per follower or combination of methods (eg. % of subscription + amount per lot). As hedgescalp says, it depends. Just read the terms of the system you choose, the information is usually contained within. Look out for catches too, like payment only made after X lots traded, minimum followers required before payment is activated, etc.

If you're wondering about their motivation to do so, here's my take on it:
- It's fun for the signal provider. Feeling that there are tens or hundreds of traders who trust the provider and remain subscribed because they are impressed by their trades is kinda cool.
- Extra stable income. They get to earn as much as they do from their trades and have a less risky source of income from their followers. Popular signal providers could earn as much as $10k-$30k per month from their subscribers.

I am wondering if these signal providers on the social trading platforms have any liability for what they are sharing or it is at the follower's sole risk to decide if to copy the trades or not? Also, who stays behind these signal providers? Do they share revenue with the platforms on which they attract revenues and if the signals are wrong - who wins at the end?

khaled912 posted:
- It's fun for the signal provider. Feeling that there are tens or hundreds of traders who trust the provider and remain subscribed because they are impressed by their trades is kinda cool.

Providing signals to others to follow is not fun but a huge responsibility I think. If the signal is wrong, this means a loss for everyone. I don't see any fun here.

If I am fortunate to become a signal provider, I will take that responsibility very seriously and honorably. I was wondering how the Myfxbook compensation works if a trader is using their AutoTrade option? As well as, I would like to know if any trader actually is receiving compensation from Myfxbook? Thank you all for the information shared. Profitable trades...

hedgescalp posted:
Hello Ok4XTrader,

That depends on which social networking platform a trader is using. For example in MQL5, there is a particular subscription cost that a trader has to pay for following a trader. And like in case of zulu trade, you can open up a live account through a broker only and when you open live account through broker, you pay additional cost either in form of spread or commission which is sent to zulu by that broker and then given to the traders who are being followed.

So there are certain platforms that guard the compensation of that merchant?