Social trading by Yasin Qureshi
Yasin Qureshi started his career as a trader and ended up running an investment bank. Before this he created NAGA: a social trading platform to make investing online easier.
Qureshi explains the top tips to start in social trading:
What is Social Trading?
How does it work?
What do I need to be able to participate in Social Trading?
How much money do I need to start with Social Trading?
How do I start?
How do I select the best leader?
What is Social Trading? Social Trading is very similar to following someone on Twitter or Instagram. The difference is that when someone posts something and you follow them it has no effect on your life but when you follow someone on Social Trading it means that whatever he buys or sells, you then also buy or sell. In other words, if he makes money, you make money. If he loses money, you lose money.
How does it work? Social Trading platforms are very simple, let’s compare it to Instagram. There is a filter there and you choose whoever you want to follow - selecting certain traders via certain criteria. You can select traders in close proximity to you, by highest profits, lowest risk profile etc. The way it works is very simple: you just click on the trader you want to follow, you determine the amount you want to invest and you can copy their trades. And from that moment on, whenever the trader is making money you are in there and making money with them.
What do I need to be able to participate in Social Trading? To do Social Trading all you need is a smartphone, tablet or PC. You have an interface that is very easy to use via these devices. The beauty of the Internet is that everything that was previously only accessible to professional investors with lots of money, is now available to everyone. You can be part of a process where investing in the markets is made available to everyone.
How much money do I need to start with Social Trading? If you want to begin with Social Trading, the thing I would start with is $0. Yes, nothing! Use play money on a NAGA demo account to familiarise yourself with the platform and the traders. Follow traders and see how much money they would have made you, then see if you can still sleep at night imagining that this would be real money. From there on I would scale it up, there is no such thing as a single amount for everyone. It is proportionate to your own wealth, whatever you feel you can safely put aside for this type of investment. Always make sure you do your homework, that you can lose the amount that you're investing and please always be aware that this comes with a risk. Remember, if your leader loses money then you will lose money.
I would advise you to start small, get familiar, try to understand what the trader does, test drive with play money and you can do this for a while until you have the confidence to invest whatever you want to invest.
How do I start? In order to start Social Trading there are a couple of things you need to know and do:
You need to askyourself: how much are you willing to invest, what risk are you willing to take and what volatility can you handle? Will you get nervous if you see that you are down 10 dollars how will you handle your emotions? What are your goals, what do you want to achieve? Once you determine what it is you're aiming that then figure out what kind of strategy works for you and how long you want your money invested.
To get started, go and select and follow the traders you want to follow. First, just follow them, review their profile, and see how they trade before investing. It is a bit like dating, get comfortable with someone then you can go further, you can trial it out and see if it works but you can also back out if you are not fully committed; it is completely flexible. Choose who you like or choose an entire portfolio of different traders who you like. Just like in every other business diversification is key to being successful in Social Trading.
How do I select the best leader? Choosing a trader is like being an Investment Manager in a large firm, you have to choose the right investment funds or the right traders and the main criteria here is not just return but risk-adjusted return. This means that if somebody makes $100 but risks $1000 dollars it is a different scenario than if someone makes $50 but only risks $5. Risk-adjusted return should be your main criteria. Having said that, on platforms like NAGA there are many different ways to analyze a trader's performance. You can measure their volatility, how much they are fluctuating over time, how consistent their returns are. etc. A guy who makes 100% returns over the year in 2 trades is not as reliable as someone who does the same over hundreds of smaller trades. Try to find out what is important for you, I would say start with the basics and then drill down as Social Trading platforms. NAGA, in particular, has a lot of different indicators, ratios, and numbers that allow you to see both how well the returns are distributed and how stable it is.
Remember you are in the driving seat, your goals and targets determine where you want to go with the strategy.
Yasin Qureshi Founder and CEO of The NAGA
Learn about Social TradingSocial Trading is a new system that allows everyone access to the best traders in the world. You can now follow top traders and automatically copy their trades, make money when they make money with no trading expertise required. This is the social trading revolution.
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