Copy Trading? Learn to Pick your Social Trader
A guide to picking and choosing traders to copy. Not all are the same, don’t judge a book by its cover and don’t believe everything you read on the internet.
Copy and social trading is a growing segment of the electronic trading market. It extends from forex, to mainstream investing and now to binary options. First and foremost, not all social/copy trading platforms are the same, but that is an entirely different article. This article is focused on how to choose a trader to follow and why social traders are better than plain Jane copy traders. Why is this? It is because of the level of interaction you get. Copy trading platforms barely provide the minimum information you need to choose a good trader. There is hardly any depth to the profiles, usually no forum in which to meet your trader and you have to copy all of their trades. In a truly social environment, such as the one we are trying to build with CT 2.0, you are able to gain a much deeper knowledge of your trader, can meet them and talk to them and other traders in a forum and best of all, pick and choose the trades you actually want to copy. Pretty cool but now back to the subject at hand.
There are a few things that you should when picking and choosing a trader to follow.
The first thing you have to do is to pick a likely candidate. In order to save yourself time, and to build a good comparison, I would start with picking a couple of likely candidates. After all, you will probably have to sift through a few before you find one you really like, and then you are going to want to find more than one trader in order to get diversification so starting with big list is not only OK, it is recommended. Good place to start include the leader board, the forum and the live trading arena. The leader board will provide a list of top traders by basic stats; how many trades, how many wins, account growth and etc. Sometimes you can filter the leader board by asset, style and other criteria as is the case with CT 2.0. After that I’d go to the forum, see who is active or not and maybe even find a few more traders for your list. The last place will be the live trading arena. Here you will find recently made trades, possibly by a trader on your list. You can get a quick peek at what people are doing, and also maybe find another trader for your list.
The very next thing to do is the check the profile. The very next thing to do will be to check the profile. This will give you information on the traders background, their style, how long they have been trading, what they like to trade and other useful bits of information. One thing I like to look at is how much info is on the profile? Do they take it seriously and provide the details important that potential followers need to know? It’s also good to see how many people visit the profile, how many friends they have made and even how many followers they have. You can then use that information to follow up later on.
Trading style is important. You want to be sure what kind of trader you have. One that follows a strict routine, trades only certain assets and uses a proven technique is better than one uses fly by night, seat of the pants, high risk trading to get results. Not only that you want to be sure the trader is trading the way you are comfortable with. Someone who trades news events is not suitable for someone who prefers a technical approach to the market but may be perfect for another trader.
Performance and history is the meat and potatoes of copy trading. You definitely want to be sure that your trader has a good performance record. And, on top of that you want to check the trade history to make sure the trader is trading the way they say they are. You don’t want to see repeated 1 hour expiry in an account that is supposed to be using one day or one week expiry, got it. Now, an advantage that CT 2.0 has over other copy trading platforms is that you can choose to follow only the trades you want, and they provide information on which assets each pro is best at. You can then choose to follow, in my case, only trades on the S&P500 and Gold, thereby maximizing your returns.
Many Traders are Awaiting you on CommuniTraders! See you there!