Hey Pal, Can I Copy You?

Written by: Dave Green • Tuesday, June 19, 2012 • 3 min read

• Last updated: Tuesday, June 19, 2012

Social trading has become a trend, and that's already a known fact. More and more brokers are discovering the business opportunities that exist in social investment networks. eToro's openbook, Currensee, Zulutrade and Tradency are catching rising popularity among the traders' community. These social platforms let you identify profitable traders and replicate their moves. So what is this “copy the experts” buzz all about? Is it really possible to make easy money on the web, by following others?

A new research, published a few weeks ago, suggests that retail Forex traders who have adopted the “copytrade” system, where they copy successful traders through community platforms as the OpenBook, can dramatically raise their odds for winnings. The research also mentions that more than 50% of online traders who use social trading platforms are making profits! This is great news for social trading fans! It shows that following the moves of experienced traders and then copying their moves, increases your success. My guess is that most FX brokers will add social investing solutions within the next 18 months, based on the assumption that social trading is already the hottest trend in the online trading industry with outstanding growing numbers.

A colleague of mine who works for one of the largest brokers worldwide, told me a couple of days ago that in times of global financial crisis, together with the European downfall and financial fog, investors prefer to put their money into trusted traders with positive numbers on their historical earnings. In this case, copytrade makes a good solution, opening a door for new investment opportunities.

If you ask yourself how it works, there you go: there are several popular social networks, like Openbook and Curensee which operate as trading communities. They offer a fully transparent virtual trading platforms, allowing you to follow any trader (in Curensee they are called 'leaders'; eToro calls them 'gurus') or trading activity, interact with other traders, chat, view all types of statistics, and most important- to mimic the most successful traders, by copying their executions! After testing it for many times, I must admit that is a totally cool, thrilling experience.

eToro for example is the biggest social Forex site and my first option, with more than 800,000 active accounts worldwide. They operate the OpenBook platform – an investment network which allows their users to copy the trades of other traders in the network. Successful traders with good results can turn into gurus. These gurus can be followed and copied by all eToro's users. What's in it for the gurus? Well, gurus make get rewarded for letting others copy them. The platform also helps users to find and choose their favorite traders to copy, by ranking the top performers by all kinds of criteria. Curensee (associated with Avafx) choose their market leaders out of tens of thousands of Forex traders. Only winning traders can turn into leaders. A winning trader, according to avafx demands, must have in his record at least three straight profitable months. Tradency works on the same concept- the idea of coping others. With 'Trade Leaders', users can follow and copy only the group of selected best traders by AvaFX. That way you can make money, and learn profitable Forex trading strategies from experienced traders and Forex experts. There are a few more alternatives for social trading, like Zulutrade, but I chose to put my light on the best two. With such a strong buzz over the last couple of years, we can predict with high confidence that the best of social investing niche is yet to come, Soon to take over traditional trading methods.