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10 Apr 2016
Copy trading
Social Trading 's been around for several years now, with well-known platform ZuluTrade being build back in 2006. Yet it's only more recently that is certainly has begun to take off in a major way. For example ZuluTrade now supports you use 65 different brokerages and contains grown into a huge company.

cfd trading

Social trading allows traders to determine what positions other traders are opening live and either manually follow these positions or follow every one of the trades of this particular trader. The principal idea behind social trading really is easy, it allows individuals to piggyback about the results of successful traders enabling them to make considerable amounts of profit. Therefore the followed traders themselves make significant commissions for each individual who decides to adhere to their trades. Giving successful traders grounds to share their successful techniques and methods with the wider Forex community.

This type of trading takes a great deal of the difficult decisions out from the trading process which is partly why it has been pushed so heavily by brokerages. Because it attracts a whole new type of traders who don't have an in-depth understanding of the financial markets but are evident that there is much money to be made from day trading etc. But social trading isn't without its very own risks. A number of traders take part in high risk trading strategies with the idea of making significant commissions from followers, often scalping strategies blow up leaving a lot of their followers with huge losses. These trading sites have countered this problem with a number of different methods, eToro for instance allows some to assign at the most 20% of their total capital to following anyone trader. Even these kind of measures still leave traders facing significant risks.

This particular industry has flourished and can continue to flourish because of the fact many people will be fascinated by the possibility of making significant returns on their own capital from simply following trading actions of others. Nevertheless the significant risks involved with such trading are often vastly understated. Stepping into social trading can be achieved for very little with many social trading brokerages requiring deposits of at most $50. While I'm sure there has been a number of major testimonials when it comes to social trading, I am willing to be there have already been a similar number of substantial losses. Before getting involved individuals must take a long hard consider whether this activity would work for them.


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