Hi,
I am new to forex trading, still learning.
I have noticed some platforms offer something like copy trader or socila trader where you can follow other successful traders and basically copy what they do. To a newbie this sounds really helpful but also a bit too good to be true.
Is this is a good way to learn and trade by seeing what others are doing or would you recommend another way of learning.
Thanks for your input
Etoro offers social trading system. However I did not use it so far.
Hi
Forex mantis
You have asked whether “social or peer to peer trading actually works”.
The short answer is yes it does. However you need to be aware of some key concepts.The first is risk mangement which is how much risk do you want to take per trade. This could be a simple % of your trading account such as 2.5% but I would suggest no more than 5%.
By limiting your risk per trade you are lowering your risk of a margin call. Some peer to peer traders use a high number of trades to bump up their own commisions. This is not in your best interest. Look for a peer to peer platform that lets you select the number trades you wish to take.
Zulutrade has this functionailty.
By limiting the number of trades your are again lowering your risk of a margin call.
The most important thing to remember is set your own stop loss. This stop loss should equal the total % loss you are willing to lose per trade. Read through the baby pips training to help you work this out. By setting the stoploss you are controling your trading risk and you are protected from any silly mistakes from the signal provider.
Controling your risk to the forex market is the first step to safely use social trading platforms
I also use zulutrade for quite some time now. There are many threads here that you can visit to read about our followers experiences. OR simply ask 
Hi fellow zulutraders
Lets help forex mantis get the great benefits of trading zulutrade. Please share your knowledge to make this thread a valuable resource for anyone who wants to get the best from zulutrade.
In my above post I mentioned that you needed a stoploss. The easiest way to work this out is by backtesting your signal provider. In the backtesting section you get a graph of the performance of the provider and you also get a graph of your performance.
If you enter a stop loss your graph may not be the same as the signal provider. It may be lower than the signal provider. If it is lower you can increase the size of your stop loss until the graphs are the same. You now know that your system has a stop loss that will not stop the trades short.
Remember the bigger the stop loss the smaller the lot size you need to take.
thank you for the valuable post.
I want to ask you smth…is it better to follow the SPs all the way - meaning to not use stop/losses and limit the positions profits?
Hi Eddy
No. you will always use a stoploss as this allows you set your own risk. To get the best of both worlds make sure the little square next to your stoploss is ticked. This will let you use your stop loss and also the signal providers stoploss/ take profits.
The name of the game is keep in control of the things you can control, such as your risk to the market. The signal provider is there to open/close trades and make you money. Your job is to make sure they dont waste yours.
Now the thread gets advertising by a zulutrade staff…
What’s the point of following other traders if they do not even set a stoploss correctly?
Most systems need very precise TakeProfit and Stoploss points. Messing with these will change the outcome considerably. It will probably turn a winning system into a losing system.
If you dont trust the trade signals fully, why copy them?
Learn to trade yourself.
@ Margret: another intersting point…I guess i hardly even use that option :33: i tend to manage losses either manually or by adding anti-correlated SPs/pairs.
@saydokan - you dont need to be from the staff, to know your platfrom. by your logic then all followers and traders that write in forums are staff members. Btw, i have seen occationally posts from the company and they have always been titled correspondingly.
If you are trading on your own account you know your stop loss and take profits. You know that you will stick to these levels so have no concerns over this issue. If somene else is trading for you, you only have their word that they will stick to their trading plan. Some can some cant. By using a stop loss you are protecting your account from this risk. Every trader will lose at some point.
Using a stop loss doesn’t change the system profitability. You allow the signal provider to follow their system which makes you money. Your stop loss does not to disturb their system its only there as a safety net.
You are dead wrong. Using a stop loss [B]does[/B] change the system profitability.
The stoploss/takeprofit level is paramount to every system. changing the system parameters will usually critically effect the system.
Closing a trade too soon is as bad as closing too late.
eg. if you set a stoploss at 30 pips, but the system requires a 40 pip stoploss, this can make a system fail terribly.
Same goes for TakeProfit level. Most systems are pretty fragile.
Learn to trade. You will sleep better.
if I put a stop of lets say, 20 pips, this means that it will stop when this difference is reached from the initial opening price? if so, it will limit my profit if it is not the same with the SP’s stop. then in this case scenario i am left with much less profit than i couldve orginally got, correct?
Hi Eddy Mo
Yes you are correct if the stoploss you use is closer to the open than the SP’s stop loss then you would be changing the profitability of the system. However I look to have my stoploss further out than the SP’s. To get to use both the SP’s stoploss and your own tick the box next to the stoploss box in the custom settings. This means you will trade like your SP but have a saftey net just in case they forget to use a stop loss of there own.
To work out the SP’s stop loss I play around with the backtesting system until both graphs are the same with my stop loss and the small box ticked.
thanks Margaret for the kind advises. i will follow what you are suggesting.
I didnt know that for the backtesting graphs!
hey - i am writing my master thesis on the topic of social trading. would you mind helping my by answering my questionnaire? you can find the link in my profile. thanks in advance.
Hey did you finish your thesis? I would like to read it, if it is possible. I use Social Trading myself and Iam blogging about it. Do you also write about crowdfunding and microfinance?
I just used to look at the platforms where there were some active traders discussing regarding the live trades, but each one of them have their own opinion too much confusing so i stopped looking at those comments.
I recall the same thing on some share trading platforms. It was basically people trying to ramp their shares to other gullible traders - not the best thing to use.