Social Trading Broker for a Newbie

Hi, everyone!

Recently I've decided to learn how to trade on Forex. After a few weeks of researching I understood that the best way for me is to start with a Social Trading platform. (ofc after doing demos & micro accounts for some months)

Most notable platforms are eToro, ZuluTrade, Darwinex & MQL5. I've also heard of MirrorTrader.
After reading a lot of reviews of different sites, I start to think all of the brokers providing SocialTrading are market makers. And so many negative reviews out there... I so much want a honest broker, who will be winning with me, not when I lose. Maybe that's a dream?

I'm still deciding, and the best available variants include:

1. eToro. Very easy for newbie, seem to have good client support
2. ZuluTrade:
    – Alfa-Forex (Russian one, from my bank)
    – IC Markets. Seen a lot of contradictory reviews, so really confused about this one.
    – Previously was thinking about AVA Trade, but they do have a big slippage for ZuluTrade, and summing this up with the fact that every broker have a lot of slippages... though they also offer MirrorTrader platform for social trading
3. Darvinex.

A few more options are:
– Ayondo, but 1.75% transaction fee & 3-250 pips spread for major currency pairs...
– XM, but they only work with MetaTrade signals, and I'm afraid it's a bit hard for me right now.

What would you propose for the small account ($500-$1000)?
I would really appreciate any help, thank you :)

Well so far you are in the right place. The best thing you can ever do is to invest and trust yourself. There too many good brokers and bad ones out there. sometimes its better for you to test with demo before investing your hard earned money and myfxbook also have some IB/Auto trading system, Am not using it but am sure most of good performing system has been around long enough to prove their strategy. Learn how to trade and dont be greedy. No matter how much your size of investment i would advise only risk not more than 5 or 10% of your acc balance. and for time being it would be good idea to start with 0.01 lots as you go along time when you feel you are ready to increase. with that few, i wish you a good luck and welcome aboard.
Have a great sunday evening
Kind regards
Livngrock

If you are unsure about a broker, always check their regulation licence on the regulator website. There you can see if they are market makers or not and do your research as well. Social trading is a very good option but you have to carefully select who to copy 😄 I agree with Livingrock about the positions size. But also define your preferred instruments. With some brokers you have more FX pairs and with some also CFDs. I could advise you not to use high leverage for FX at the beginning - not more than 1:100. This will enable you to start by opening just a few minilots. Have a successful start!

Veronica,

Why is Metatrader 4 hard for you?

MT4 can be a bit hard if someone is used to web based platforms I guess. But overall it is an easy to use platform.

Thanks a lot for your advices, Livingrock & Alexandre :)

@compuforexpamm Hi :) That's because I'm new to trading, so for now it's a bit hard :)

compuforexpamm posted:
Veronica,

Why is Metatrader 4 hard for you?

Hi,

That's fair comment.....MT4 is fine, any platform will come with some form of a learning curve. If you are looking at social trading the technical knowledge required is minimal.

I haven't tried any of the other platforms but that is because I code my own EA's and don't particularly care to go out and learn another language/platform.

I believe that social trading is still going to become very big......it allows you to be involved or un-involved as you like. It varies from following successful traders that blog/post potential trades, to trading EA's, or receiving signals, or even a direct copy account.

MQL4 community offer you the opportunity to try out literally hundreds of signal providers for free on demo. Check out www.mql4.com

Here is an experiment that I am running......

This is myfxbook links to an account of mine(demo) where I am copying trades off another account of mine.....

Primary account :- https://www.myfxbook.com/members/compuforexpamm/cf-trend-v15-beta/1795272

Following account : - https://www.myfxbook.com/members/compuforexpamm/signal-copy-test/1857994

Of interest is the fact that the following account is a different broker to the primary.

The type of trading system makes a difference when it comes to slippage. There are many good systems that scalp and only have a takeprofit of 2 pips......this kind of system is not suitable for social trading.....maybe a direct copy account(ala mam/pam).

Dear Veronica,

Unfortunately none of the above choices have a minimal interest.

Both Etoro and Zulutrade have plenty of kamikaze traders, risking as much as 60% -80% of their balances sheet. This is understandable considering their balances are worth as much as few hundred currency units or even less. You could be lucky in entering in a lucky moment for the trader's kamikaze strategy. But you have to consider the opposite, just to see your all monies going out of window.

On the other hand, Darwinex is a honest company, but they have a serious problem with its process. Almost 95% of its traders are algorithmic. So, the broker applies their own risk control algorithms, aimed at 'normalize' the risk measured by VaR at 20%. Unfortunately this process has plenty of failures as you are not prevented from having as much as 40 or 50% drawdown in a matter of few days (there are several real examples). So, also it isn't suitable for your hard earned money. May be you could wait some time more as they are currently working in order to rethink and renew this process.

For all the offers in the market, and considering your are a beginer with careful concernings, you could try Roboforex CopyFX system, with a Cent account. If I'm not wrong, a few dozen of usd/eur are sufficient to open such an account. Surely, this isn´t a perfect system, but you are risking very small ammounts and at same time getting a sense of currency markets and study their trades/techniques. Also it is cheap as you don´t have to pay for keeping your platform running 24/24h (such as a VPS for MQL5 signals) and, important, only pay for trader's fees only in case of profits.

Several months later, with more experience, you could reevaluate this option or other options in play. I hope, by this way, this experience wont cost you too much.

Cheers,

2% max risk per trade.

I have used Darwinex and Zulu for a while. It is definitely easier to find a good trader from Darwinex but there are still good traders on Zulutrade. I only look for trades using an actual real live account. THe main problem with social trading platforms is that there are a lot of jokers on their who have big drawdowns. But if you look carefully at the trade history then you can usually tell the good traders from the bad ones. If you can , try to connect an ECN broker to follow the traders. Better trades = mrore profit!

The biggest risk for me with these social trading platforms is the anonymity of the people you are copying. You never know who stays behind - is it a fake account run by unscrupulous broker or someone else who got lucky for a while. After all ask yourself a question - will these tools help you be profitable and make informed reasonable decisions.

NikeAisling posted:
Thanks a lot for your advices, Livingrock & Alexandre :)

You are welcome and keep it up! 😄

NikeAisling posted:
Hi, everyone!

Recently I've decided to learn how to trade on Forex. After a few weeks of researching I understood that the best way for me is to start with a Social Trading platform. (ofc after doing demos & micro accounts for some months)

Hi Veronica, no matter what solution you choose, my advice is to check carefully the regulation and research how it is all done about the social trading thing. I know from friends that mirror trading can lead to big losses. Alexandre has a good point about the anonymity of those who you may follow. I wish you good luck in finding the best option for you! I would recommend trying first the providers that are specialised in the social trading field.

NikeAisling posted:
Most notable platforms are eToro, ZuluTrade, Darwinex & MQL5. I've also heard of MirrorTrader.

Out of these I heard good things about eToro. About the rest I am not sure. Have you chosen one already? Would be cool to hear your experience 😄

LLewis posted:
Have you chosen one already? Would be cool to hear your experience 😄

Yes, it is interesting to see the result from the selection. I hope all was good.