After understanding about what Social Trading is, choosing the best traders to copy is the next step. What are the best ways to do it?

After learning about Social Trading, you decided to utilize copy trading service. What to do then? Well, there are two steps to do this. First, choose the copy trading provider or social trading network that suit your requirements. Second, choose the ones whose trades you are going to copy.

Choosing the best traders

Choosing Copy Trading Network

Your broker may have offered an in-house copy trading service. Some brokers have noticed the trend and arranged specialized copy trading for their clients. However, most brokers do not own such service themselves. Instead, they linked with copy trading networks. The network function as Introducing Broker to those brokers. Because of that, you can open an account through the network, or linked your old account to the network.

If you want to establish a separate account for social trading, then it is probably more efficient to make it through the network. If you already own an account but your broker does not facilitate copy-trading themselves, check whether there is any network recommended by your broker. Some brokers create a special kind of account as social trading account with specified condition attached. Beside of that, any arrangement to link your account with other account in the network will need your broker's cooperation, so it is necessary to know whether your broker could accommodate the linkage or not and at what kind of condition.

If you have the freedom to choose, I advise you to browse through some of the most well-known copy trading networks, and sort them out. Every network has some sort of quirk. You may have to discard one by one until you find the one that you will feel comfortable to be involved in.


Choosing The Best Trader To Copy

Some people just glanced through the list of best trader provided by the network and then choose the ones with the most profit gained or the ones most widely followed. That's actually not a bad thing. But remember that past and present performance is not indicative of future results. As well, majority is not always right. So, these are some of the things you should consider in choosing trader to copy, in priority order:


1. Consistent Track Record

Scrutinize their track records carefully, and choose the ones who managed to maintain their best performance consistently after certain period, six months or more. Among the best trader list (those with highest ROI), maybe the five best of ten best, check their performance stability over time. There will be trader who gain big from time to time, but experience extreme loss (historical drawdown) in between. There will be trader who choose to pick up profit bit by bit instead of betting on high risk, high profit premise. Every one has strategy, and how the strategy works is what you should think about.


2. Trader Openness

Openness refer to trader's way in communicating with his followers. There are traders who no matter what his follower says, he doesn't respond at all. There are traders who announce every time he intend to change strategy. But there also exceptional traders who thanks every thankyous and explain every query. Such transparency will go a long way to settle your doubts. Plus, it proves that he closely monitor his account and taking care of his followers.


3. How Real Is 'Real'

You should understand that not all traders who offer their account to be copied is trading manually. Some of them used automated trading or  system. Also, not all traders used real money, instead, they send signal with demo account. As you ought to know, difference between demo and real account could mean the world. What's more, you should understand that some networks allows practically everyone to be signal provider without proper vetting procedures. That's why, you can't trust the network's reliability to show only 'real' best trader.


4. Specific Attributes

Just like ordinary traders, traders in the network also have specific attribute, such as day-traders, swing-traders, EUR/USD traders, etc. Think about those attributes. Do you worry that the trader may allow trading position to float for days? then choose day-traders. Are you of opinion that EUR/USD present the most profit potential? then you might be interested in the EUR/USD trader. What you choose at this point is all up to your discretion.

Those are just some suggestions, because the one who have to weight them is you. Remember that no matter how careful you choose, you still have to be prudent. Monitor your account progress periodically, and make adjustments you deemed necessary. Be aware that the probability of risk are unerasable, some losses could be expected in the forex market. Still, if a trader show very unsatisfactory performance, cut your losses and follow another. That, too, is an adjustment. OctaFX, a broker based in Saint Vincent and the Grenadines, has also revealed several ways to choose the best traders to copy.