Best Social Trading Platform 2023

In this article, we’ll look at some of the best social trading platforms available in 2023, as well as other important features you should consider before committing to anything. If you are a beginner and want to learn about liquidity providers and what they do, we have an in-depth guide for you here.

Top Rated Social Trading Platforms 2023

We put together this list of the best social trading brokers based on various factors. Security, account types, minimum deposits, regulation, customer support, ease of use, and more were considered. Here is our selection of the best brokers for social trading.

• eToro – Best Social Trading Platform Overall
• AvaTrade – Best Social Trading App Overall
• ZuluTrade – Best Third-Party Social Trading App
• Darwinex
• DupliTrade
• Collective 2
• Tradency Mirror Trader
• FXTM
• Naga
• Ayondo
• Tradeo
• Kinfo
• InstaForex ForexCopy
• MyFXbook
• CopyFX
• MyDigiTrade
• MQL5
• IronFX Social Trader
• LiteForex Social Trading
• FX Junction
• MetaQuotes MetaTrader
• FXstat
• CM Trading CopyKat
• cMirror
• SIRIX
• PrimeXBT
• Coinmatics

What is Social Trading?

How Does it Work?

Social trading is a function of many new trading platforms. It allows users to copy trades done by successful traders on their social trading platform. The goal of social trading is to minimize risk while following trading set by other trusted traders.

Social trading began in the early 2000s with traders on Forex markets. Since then, it has expanded to commodity trading, shares, and indices.

These platforms allow users to view other traders' portfolios and copy their investments. Important features to note when looking are the fees, the number of active users, and the regulations involved.

The goal of social trading is to break down the barriers that keep people from participating in trading. Users with little or no experience can invest by copying from other traders who have more experience.

Some platforms are designed with social trading in mind, allowing users to subscribe to other traders’ channels. If you use a platform that does not facilitate this, you can always incorporate individual elements of social trading in your portfolio.

Social trading is useful for reducing the amount of research and preparation you need to do before making a trade, but the trader you’re copying may not have done their research either.

Social Trading vs. Copy Trading

Social trading and copy trading are sometimes confused, but they are distinct. Social trading is about evaluating trends based on other traders on the platform, either copying them directly or going in the opposite direction.

Copy trading is a part of social trading, but it is more limited. Copy-trading another trader means you will automatically make the same trades they do. This is useful if you find a generally profitable trader, but you have less control than general social trading.

How Do I Start Social Trading?

To start social trading, all you need to do is join a platform that supports it and find traders that perform well.

It would be best if you did plenty of research about the risks involved. Many traders who use social trading think it eliminates the risk, but that’s not entirely true. If you copy traders, you take on all the risks they do.

Is Social or Copy Trading Illegal?

Social and copy trading is completely legal. All you are doing is looking at the trades other users are making and copying the ones you think are likely to work.

Before the widespread popularity of social trading, this was still possible. As brokers introduced casual and individual traders to the market, they built features that encouraged users to use this method to trade.

Can You Make Money Social Trading?

As long as the trades you copy are profitable, you will make money. You can either copy the entire trade or only a portion of it. So you won’t make the exact dollar amount as the trader you are mimicking.

Traders are often rewarded for sharing their strategies financially or for popularity. Many platforms have gamified the experience by setting up leaderboards for the most successful followed traders.

Beware, just because you are copying a trader who has been successful in the past does not mean every trade they make will make money.

U.S. Restrictions

Depending on where the Social Trading Platform is listed, it will be governed by different regulatory bodies. If the platform is in Europe, it will be overseen by the Cyprus Securities and Exchange Commission (CySEC). If the company is listed in the U.S., it is governed by the SEC.

These regulatory bodies control various aspects of trading, social or otherwise. They enforce maximum leveraging laws ensuring that traders do not borrow too much capital from their brokers.

Regulators also protect against money laundering and require reports from brokers that increase transparency. You should always ensure that your broker follows regulation guidelines to protect yourself and your money.

Pros and Cons of Social Trading

Pros

• Little to no experience is needed to start.
• Follow the strategies of the best traders on your platform and earn the same profits they do.
• Allow auto trading. 
• Trades can be done while you sleep. No missing out.
• Many platforms allow you to start and stop copy trading easily.

Cons

• Even the most profitable traders lose money from time to time.
• Copied trades may not always be profitable.
• There is often a higher commission on copied trades than on others.
• You will always be slightly behind the trend if you copy other traders.

How to Pick a Social Online Trading Platform

Fees (Trading and Non-Trading Fees)

These do not operate for free. So they’re going to take some cut from your trades.

Platforms such as eToro and Darwinex charge very little for the commission, but they take a proportional cut of each trade. Others take less of a cut, but they charge monthly subscription fees.

You should also be aware of inactivity fees. Since most of these platforms make money from active traders, they penalize users who do not trade frequently. These can vary from relatively small amounts to much more.

Number of Users

Social trading relies on having a large user base. More active traders on a platform mean there are more strategies to copy from.

Some platforms have millions of active traders, such as eToro. This is useful for exploring various options and strategies, but too many traders can make it difficult to pick out the best ones.

Platforms with fewer traders will give you fewer options, but it might be easier to sift through and find the best ones.

Minimum Deposits

Most trading platforms require potential traders to open an account with a minimum balance. It changes depending on the platform and is always subject to change.

If you’re looking to start trading, you need to find a platform where the deposit amount is within your means.

It would be best if you never went with a platform where the minimum deposit is more than the money you would be willing to lose.

Platforms like Naga Trader do not have a minimum amount. This is useful for novice traders, but you will still need to invest initial capital in starting trading. More expensive options will only be available to those who can afford them.

Research

Starting any trading can be a daunting task. While copy trading is easier than other forms, there is still a lot of research to be done before you start.

Reading through this article is only the first step, but it’s an important one. If there are any terms you don’t understand, look them up. You must understand every aspect of online trading before you put your money on the line.

There are many useful resources online to help you out if you’re a beginner, but they’re not all useful. Read through reviews on platforms like Trustpilot.com to find out what other users’ experience on any particular platform was.

Before making a trade or deciding to copy a signal provider, make sure you do thorough research on them. Is the market a volatile one or does it show slow but incremental growth? How profitable is a signal provider on average?

Being able to answer these and other questions will give you the best chance of making a profitable decision. Make sure that the platform you choose gives you access to this kind of analytical data. If it’s obscured or otherwise unavailable, you should probably find another platform.

Education

Many Social Trading Platforms provide lots of educational resources to their users. 

If you’re a long-time trader, this information will be superfluous to your needs. But if you’re starting, you need to ensure that the platform you choose has some way of educating you about the basics.

Markets are made up of a complex network of interconnected systems. You’re never going to be able to understand each one of them, but you can learn how to read spreads and understand market sentiments.

You don’t need a master’s degree to start trading. That’s the beauty of copy trading. But if you’re going to risk your money, you need to make sure you’ve done your due diligence to give you the best chance of success.

Trading Tools

Trading tools are a must for anyone looking to make a significant earning on Forex or any other markets. Quite simply, they are utilities that have been built to give traders some sort of insight into markets.

Copy trading itself is a trading tool that these platforms provide, but it doesn’t stop there.

Many platforms give users access to financial calendars and newsfeeds that better equip them to understand the market. Most platforms also provide real-time charting software to illustrate the performance of stocks visually.

Other than that, there are a plethora of tools built into various platforms. Some may prove useful to you, others not. Be careful to examine what tools each platform has before committing to one.

There are also ancillary tools available outside of any of these platforms such as forex volatility calculators and currency correlation matrices. Depending on what you’re looking to trade, these may not be useful. But they could also prove to be a lifesaver.

Mobile Trading App

Everything has an app nowadays. Social trading should be no different.

Although not every platform has its own mobile app, most do. This is useful because you don’t always want to be shackled to your desktop waiting for the ideal time to initiate a trade.

If a platform has its own mobile app it gives you the ability to make a trade wherever you are. If you’re trading something highly volatile such as Forex or Crypto this is considered a must. Being able to make trades fast is going to give you an edge over other traders who can’t.

Account Types

Social Trading Platforms allow a variety of different account types. It’s important to make sure the platform you choose has an account type that’s compatible with your capital.

Account types vary depending on the platform, but they can be broken down into three general categories.

Micro accounts are usually limited to under $100. This limits the kind of trading you can do to mostly micro and nano lots. It’s a good place to start since you can’t lose too much money, but you will also not be able to make large returns.

Standard accounts go by many different names depending on the broker. These accounts begin anywhere between $100-$500 deposits. The risk is higher as you are starting with more capital to potentially lose, but you also could get higher returns.

VIP accounts are reserved for those with large sums of capital. They usually start at around $10,000 and go well into the millions. These accounts are typically ECN accounts so that they can trade directly. 

Even if you have the capital to start with, we recommend starting with a micro or standard account.

Leverage and Margin

This is perhaps one of the most controversial aspects of any trading platform. Depending on where you live, regulations may limit the maximum amount of leverage you can use on trades.

Simply put, leverage is the ability to put up only a portion of the initial capital to control a position in Forex or other trades. Margin is the capital amount that the trader has to put up to secure that leverage.

If your broker offers you leverage of 100:1, for every unit of currency you put up as margin, your broker will leverage with 100 units of their currency.

For example, if you’re trying to secure a $100,000 position but you only have $5000 in your account, you can use leverage to secure your position. You would put down a $1000 margin which your broker would leverage with the remaining $99,000. (1000 X 100 = 100,000)

This is a woefully lacking explanation. Anyone thinking of trading using leverage should know exactly what they’re getting into before they start.

Users should be wary of any platform which offers leverage over 100:1. Anything over 50:1 is not allowed in the US.

It may seem like a good idea, trading on leveraged capital could make huge returns, but it could also put you in a massive financial hole. If you lose on the trade, you could end up losing more than you put up.

Base Currencies

The base currency is the first currency quoted in a currency pair. In Forex markets, if you are trading Australian Dollars for Euro (AUD/EUR). In this pair, the Australian dollar would be the base currency.

Base currencies change depending on where you’re trading from. Most of the time, it will be your native currency. If you’re trading currency outside your country, the base currency will be whatever your broker decides.

Assets

An asset is something you hold that has some financial value. In trading, you will not always be trading assets.

Depending on what your chosen platform allows, you may trade CFDs. As a rule of thumb, assets are less volatile with lower returns.

Regulation

Depending on where your chosen platform is listed, it will be subject to different levels of regulation. You must understand what those regulations mean to you.

Different regulatory zones may have rules determining maximum leverage amounts. In the US, leverage maximums are limited to 50:1. In the UK, EU, and Australia they can go as high as 100:1. Elsewhere, leverage maximums are not set.

Regulations will also determine what you’re allowed to trade and whether your funds are kept in segregated accounts.

Security

Since all of these platforms are hosted online, it’s important to consider the level of cybersecurity measures the platforms take.

All the platforms listed in this article have a proven track record regarding online security. But there are many other platforms out there. If you’re considering one of those, there are a few key features to look for.

Firstly, make sure they encrypt all their data. Unencrypted data makes your account a soft target for hackers who could easily steal your data, log into your account, and clean you out.

It’s also important to practice good hygiene while trading. Change your password often and ensure your antivirus is turned on and up-to-date. You could also consider using a VPN to further protect your data online.

Trading Platform

Most platforms use third-party platforms to complete their transactions. You will link your social trading account with a social trading account. 

Most social trading brokers use MetaTrader 4 or 5 (MT4 or MT5). They will link with the trading platform through backend programs to complete your transactions.

This is normal practice with no cause for alarm, but you need to know which platform your social trades are connected to. Some trading platforms allow traders to link to more than one platform. Others use their platform.

Each of these options has its benefits and drawbacks. A system that uses its platform will complete trades quickly and reduce slippage, but it may be limited in the number of instruments you can trade.

Linking to one or multiple social trading platforms will give you access to many options, but high traffic could cause trade execution delays.

Conclusion

To recap, the best social trading platform is eToro, followed by AvaTrade. eToro is the best in class for social copy trading, while AvaTrade is the best social trading app.