If you already know Social Trading and want to start testing it, we must warn you that, before starting to operate, it is important that you draw up a strategy. Having a roadmap will allow you to identify the best opportunities in the market. In this post, we give you some tips to design a winning social trading strategy.
The 6 basic tips to design an optimal social trading strategy:
1-Be patient. Think long term
2. Beware of large superficial numbers
3. Use advanced search
4. Diversify your portfolio
5. Keep a close eye on your account
6. Think and act globally
1. Be patient – think long term
We all want to have results now; to see quickly if we are on the right track. Well that thinking won’t work so well here; have patience. Never value your results just a few weeks after starting. Social trading pays off over the long-term. If you only look at the present, it will be difficult for you to understand that the process has its ups and downs. It is normal to go through weeks of losses before flying back into profit. It is part of the process. Always keep this in mind because getting nervous and stopping Social Trading because of a few days where things aren’t going so well is a big mistake.
2. Beware of large superficial numbers
Never let yourself be carried away by an impressive number of followers or by a performance of 140%. When you see a spectacular number, try to see what’s behind it. Always. You will soon discover that these spectacular numbers are often associated with a high-risk strategy. You can earn a lot Social Trading. It is true. But also lose much more than you would like if you put too much trust in surfance numbers without looking in more detail. Murphy’s law here is applicable.
3. Use advanced search
Think first about the profiles that interest you, and then use the advanced search to find them. You will save yourself a lot of time trying to find traders to follow and copy; you will avoid going through pages and pages of traders that aren’t quite the right fit – and you will take temptations out of the way. If, for example, a 15% drawdown is your cap then put that in your search to remove traders exceeding that figure (although they might have tempting performance elsewhere). Be consistent with the values and plan you have outlined and remove temptations and distractions that are outside this plan.
4. Diversify the portfolio
In social trading, this means dividing your money between different traders. And, if possible, look for traders who work in different markets and products. With several traders in your portfolio, with different profiles, it is very difficult for everyone to catch a losing streak at the same time. And if it happens that one does catch a losing streak, the rest will be there to keep your account balanced and positive. Of course, make sure everyone has healthy statistics too! Having lots of traders on the go won’t work alone.
5. Keep a close eye on your account
Take good care of your account. It is true that social trading requires much less dedication than plain trading. Much less. And that is one of its advantages. But you can’t just assemble your wallet, trust your setup and forget about it. You can’t believe that everything is going to be just fine. Never forget that you are managing human capital. And that human beings are unpredictable. We are not machines; we don’t always repeat the same patterns. We are subject to our emotions. And emotions are always an open door to the unexpected. So mitigate this by keeping a close and regular eye on your account and not just setting things up and expecting everything to be plain sailing.
6. Think and act globally
Be flexible. Expand your horizons. Don’t think about borders. In conventional trading many people limit themselves to operating in the market of their country, which is the one they usually know best. But in social trading, there are no borders. You are going to find top traders German, English, Russian, Chinese, and more. And the market they work in is not going to intrinsically make them better or worse. What counts are the numbers. So, don’t be surprised if you discover that the secret to your success is in Singapore.
As with any new challenge,it is important to train and train in the long or short term, investing in the market can be a great way to generate additional income or savings but you should always be in control of your emotions and use common sense.
Join NAGA where you can learn from the best traders and get better returns. Copy the most profitable traders and increase your profits
To learn more about Social Trading, subscribe to our website and our YouTube channelwhere you will find the key tools to become a finance professional.
