⇨ Qu'est-ce que le commerce social et comment fonctionne-t-il?
Alors, êtes-vous curieux de le découvrir? Qu'est-ce que le commerce social? (aussi appelé Trading de copie ou Miroir de trading)?
Vous voulez savoir comment des entreprises comme eToro, ZuluTrade et ayondo sont devenues les courtiers les plus intéressants ces dernières années?
En ces Guide de 12 chapitres Vous découvrirez tout ce que vous devez savoir sur cette forme d'investissement innovante et les courtiers qui en font partie.
La simplicité du Social Trading a permis à des centaines de milliers de personnes d'approcher le monde de l'investissement. Mais attention. Ce n'est pas parce que c'est simple que c'est aussi simple que ça réussir et gagner de l'argent.
C'est une discipline accessible à tous, mais il faut quand même devenir un professionnel pour réussir. Ce cours gratuit, combiné avec les deux suivants, vous donnera les bases pour vous lancer dans le monde de l'investissement le plus rapidement possible.
62% des comptes de détail CFD perdent de l'argent
Le commerce social, parmi les différents types d’instruments d’investissement, est dernière génération discipline d'investissement, née grâce au web 2.0. Il permet à l'investisseur, même inexpérimenté, copier automatiquement les transactions financières réalisées par un ou plusieurs investisseurs professionnels dans un réseau commercial
Voici notre Top 10 personnel des meilleurs réseaux de commerce social.
Les investisseurs à copier peuvent être sélectionnés en consultant leurs antécédents de performance ou en interagissant avec d'autres investisseurs internes plateformes de trading social (Parmi les meilleurs, on peut citer eToro, ZuluTrade et Ayondo).
Le commerce social est donc une forme particulière de négociation avec les investisseurs pas sur le marché mais chez les commerçants qui opèrent sur le marché (ou même dans le portefeuille d'un opérateur avec eToro CopyPortofolios), en essayant de choisir celui qui répond le mieux à vos besoins en termes d'appétit pour le risque, de retour sur investissement et d'autres caractéristiques opérationnelles utiles.
De plus, travailler via le serveur, fonctionner avec Social Trading ne nécessite même pas d'avoir votre ordinateur toujours allumé et exécutant des programmes.
Ce nouveau domaine est né et s'est développé principalement grâce au marché Forex et à l'utilisation de MetaTrader plates-formes et même aujourd'hui la Forex Social Trading Il reste le secteur le plus utilisé, malgré l'avènement des CFD, il permet une expansion vers d'autres instruments dérivés (actions, indices, matières premières, obligations, taux d'intérêt, etc.).
Cependant, avant de continuer, il est également important de clarifier les termes, car il y a encore une certaine confusion sur les différences entre Mirror, Copy ou Social Trading.
Ce cours se concentre spécifiquement sur Copy Trading, mais il est également parfait pour Mirror Trading car ce dernier n'a qu'une étape de moins.
Cependant, comme nous le verrons, étant donné que les deux secteurs ont évolué et se sont développés grâce à la nouvelle technologie 2.0 des réseaux sociaux, la tendance de l'ensemble de l'industrie est d'appeler tout le Social Trading. Nous nous adaptons donc également.
L'aspect social du commerce social
Dans le commerce social l'utilisateur n'est plus seulMais il est entouré de milliers d'investisseurs qui, comme lui, tentent de prendre les bonnes décisions et évitent de suivre tous les opérateurs non professionnels en ne comptant que sur les meilleurs.
Cette interaction entre les utilisateurs peut certainement apporter des avantages dans certains cas, mais vous ne devez pas la surestimer.
- Souhaitez-vous prendre conseil auprès de quelqu'un qui n'a pas plus d'expérience que vous?
- Si vous saviez que la stratégie d'un trader est très risquée, feriez-vous confiance aux votes positifs de ceux qui, jusque-là, ont fait de l'argent mais ignorent le danger imminent?
- Diriez-vous avec une mini-fourgonnette de la même manière qu'avec une voiture de sport?
- De même, prendriez-vous les mêmes décisions que celles qui ont dix fois votre capital, sans vous soucier des différences de poids et de volume?
Si votre réponse est non, alors vous êtes en route.
L'attribut "Social" dans le trading social peut être une bonne chose, certainement innovant, et à certains égards, il peut être un avantage par rapport à le laisser seul pour vous, mais vous devez tout prendre avec beaucoup de prudence et avoir une idée claire.
Il ne s'agit pas de commenter les photos de vos amis, de partager vos pensées avec le monde, de discuter de politique, de vos passions ou, en général, d'interagir sur un réseau social comme vous le feriez tous les jours.
Ici on parle Réseaux de commerce social, nous parlons d'argent. Oui L'argent est très sérieux.
En matière d'argent, il existe deux solutions. Soit vous faites confiance aux conseils et aux choix d'autres étrangers, et avec le Social Trading c'est possible (mais je viens de vous montrer que c'est très risqué), soit vous apprenez à investir, avec des méthodologies et des pratiques professionnelles, et vous devenez le créateur de votre fortune
Comme le disaient les anciens Romains:
"Homo faber fortunae suae".
Une fois cela fait, vous pouvez utiliser l'aspect social du Social Trading comme garniture et soutenir votre stratégie. Investingoal est là pour ça. De toute évidence, le commerce social, comme toute autre forme d'investissement, comporte des risques.
Mais voici la bonne nouvelle.
Le trading social fonctionne-t-il? Quels en sont les avantages?
Vous avez et aurez toujours le Un contrôle total sur les opérations que l'opérateur que vous avez choisi effectuera et sur votre argent.
La propriété de votre compte d'entreprise sera toujours la vôtre, vous ne donnerez votre argent à personne, vous pourrez gérer tous les aspects de votre investissement et vous aurez toujours tout sous contrôle, à tout moment.
Ce n'est pas comme remettre votre argent à un autre opérateur, juste à un moment donné, "Désolé, cela ne s'est pas passé comme nous le pensions, votre argent n'est plus là." Vous pouvez tout contrôler et décider de continuer, d'arrêter ou de modifier quoi que ce soit à tout moment.
C’est une grande opportunité qui, en revanche, vous oblige à être Entièrement responsable. Les récompense pour cela, votre devoir est que le pourcentages de retour dans votre investissement (ROI) peut être beaucoup plus élevé que toute autre méthode traditionnelle.
Pour être responsable de votre succès et récolter ces excellents avantages, vous devez être bien préparé et étudier attentivement les leçons de ce cours.
Mais ne vous inquiétez pas.
Réussir le Social Trading n'est pas aussi compliqué que de faire du Forex en tant que commerçant de détail.
Commencez maintenant. Ce guide est le meilleur endroit pour commencer.
Pour bien comprendre Commerce socialLes caractéristiques et les capacités des caractéristiques, nous devons d'abord en histoire et c'est évolution.
Avant Social Trading, il y avait Miroir de trading y Copie commercialeMais d'abord, il y avait les simples courriels. Si on peut dire ça les e-mails ont créé des conditions de l'histoire de l'évolution du Social Trading à sa forme actuelle.
À l'origine, certains commerçants ont communiqué à leurs abonnés leur intention d'ouvrir ou de fermer certains métiers à certains niveaux, en utilisant bulletins d'information. Quand ils ont voulu ouvrir un commerce, un e-mail a été envoyé et tous les membres de ce service ont ouvert indépendamment le même commerce. Ensuite, la même procédure de fermeture. Une communication a été faite à la liste de diffusion, et tout le monde a fermé ses positions.
Puis le premier salle de commerce a commencé à apparaître Le concept était plus ou moins le même. Le marchand a signalé l'exécution d'un échange, mais au lieu d'utiliser le courrier électronique, il l'a écrit dans une salle virtuelle où les abonnés pouvaient lire et répondre.
Plus tard, avec l'évolution de salle de chatIls pourraient également commenter ou poser des questions en direct. Évidemment, tout impliquait une présence constante devant l'ordinateur et, dans la plupart des cas, le paiement d'une redevance pour utiliser le service.
Un tournant historique: la réplication automatique
À ce stade, certains courtiers et entrepreneurs ont commencé à réaliser le potentiel Cela pourrait être généré s'ils pouvaient créer un système de réplication, mais cette fois automatique, où une seule entité pourrait générer les signaux de trading, et toutes les autres parties liées pourraient les reproduire automatiquement dans leurs comptes de trading, sans avoir à suivre ou surveiller en permanence le e-mail ou la salle d'opération.
Le mérite d'avoir commencé la véritable histoire du Social Trading est pour l'entreprise. Tradence. Dans 2005 Ils ont proposé le premier système d'autotrading, appelé par eux Mirror Trader. Un trader pourrait héberger sa propre stratégie de trading sur les systèmes Tradency, à condition de fournir un enregistrement suffisamment long des performances de cette stratégie. À ce moment-là, si la stratégie était acceptée, les clients de Tradency pouvaient voir les données de cette stratégie et, s'ils étaient intéressés, pouvaient décider de copier toutes les transactions générées à partir de cette stratégie sur leur compte.
Des entreprises comme Zulutrade et Etoro ont franchi une nouvelle étape importante dans l'histoire du Social Trading. Les commerçants n'avaient plus à présenter leurs stratégies pour être approuvés et utilisés. Il suffisait que les commerçants aient connecté leur compte professionnel personnel sur la plateforme Zulutrade, et à partir de ce moment, chacune de ses actions a été enregistrée et mis à la disposition des utilisateurs investisseurs pour consultation.
Quant à Mirror Trading of Tradency, le nouveau système a permis aux utilisateurs investisseurs de vérifier le travail et l'historique des traders sur la plateforme, grâce aux nouvelles méthodes d'analyse et, le cas échéant, de copier sur leur compte les transactions effectuées par ce commerçant. par son compte. D'où le terme Copy Trading.
Dernier chapitre … mais l'histoire du Social Trading continue
Ce fut une étape importante, car de cette façon première interaction réelle et directe entre l'utilisateur qui fournit le signal et l'utilisateur qui réplique Est né. La dernière étape de cette histoire est survenue peu de temps après.
Pourquoi ne pas permettre aux investisseurs qui font de la copie commerciale d'interagir entre eux, d'échanger des opinions, de laisser des commentaires sur les actions d'un commerçant et de voter à ce sujet? Pourquoi ne pas autoriser également l'utilisation des réseaux sociaux, connectés à l'ensemble de l'activité Copy Trading?
Ici est né Commerce social.
Mais bien sûr, l'histoire ne s'arrête pas là.
Le commerce social est en constante évolution. Les entreprises se développent et de nouvelles émergent, il existe de nouveaux services plus innovants (par exemple, jetez un coup d'œil aux nouveaux portefeuilles eToro Copy), la qualité du service s'améliore constamment et la concurrence globale pousse l'ensemble de l'industrie à s'améliorer.
S'il est vrai que nous sommes destinés à être plus connectés les uns aux autres, alors le trading social fera sa part et l'investissement deviendra de plus en plus abordable pour tout le monde.
Cette histoire vient de commencer et InvestinGoal est là pour l'écrire avec vous.
Comprendre comment fonctionne vraiment le commerce social Vous devez d'abord rencontrer les principaux acteurs participant à cette grande machine.
Marché Forex, berceau du trading social
Le marché Forex est de loin le plus grand marché au monde pour les volumes de transactions quotidiennes. Aucun autre marché au monde n'atteint même la moitié de la taille du Forex.
Sur ce marché, vous négociez de l'argent, ou plutôt paires de devises. Une devise, comme le dollar, n'est jamais achetée ou vendue en termes absolus, mais toujours par rapport à une autre devise. Donc, si je veux acheter des dollars, je dois, par exemple, vendre les euros que j'ai, et pour déterminer combien de dollars je vais recevoir, je dois utiliser l'échange euro-dollar, ou EUR / USD. Ce changement augmente ou diminue en fonction de l'augmentation ou de la diminution de la demande et de l'offre des deux monnaies.
Sur le marché Forex, vous pouvez investir et négocier (ou même de meilleurs métiers sociaux) en augmentant ou en diminuant le taux de change des devises. Comme on dit dans l'industrie, si vous achetez EUR / USD, ou "allez longtemps" en EUR / USD (achetez euro et vendez dollars), vous voulez que la bourse augmente en valeur, pour profiter de la différence. Inversement, si vous vendez EUR / USD, ou "manquez" en EUR / USD (vendez euro et achetez dollars), vous voulez que la bourse fasse une robe pour gagner la différence.
La valeur de cette différence dépend du PIP, qui est l'unité de mesure des taux de change. En règle générale, le pip est l'écart minimum de la quatrième décimale après le point décimal (par exemple, si l'EUR / USD est passé de 1,3000 à 1,3001, il augmente d'un pip).
Le marché des changes est désormais bien connu car, grâce à l'expansion et à l'explosion de la technologie et de la connectivité, coûts et outils Pour participer, y compris le Social Trading lui-même, ils sont devenus Vraiment abordable pour tout le monde.
En outre, ces dernières années, grâce à la technologie de CFD (contrats pour différence) Certaines entreprises, en particulier eToro, ouvrent également le Social Trading au marché des actions, des indices et des matières premières.
Le coureur, votre compagnon de voyage
Les courtier est celui qui permet toute personne qui veut participer au marché Forex pour effectuer des opérations commerciales, avec une vitesse et un confort extrêmes.
Pour contacter un courtier, vous pouvez utiliser votre téléphone tel qu'il était auparavant, votre ordinateur tel qu'il est maintenant ou même une plateforme de trading social, comme vous pouvez le faire en un rien de temps.
Le courtier n'est rien d'autre qu'un intermédiaire qui se tient entre vous et le marché.
Supposons que vous souhaitiez investir longtemps en EUR / USD, c'est-à-dire que vous souhaitiez vendre vos dollars et acheter l'euro, car vous avez l'intuition que la valeur de l'euro augmentera.
À ce moment-là, il vous suffit de contacter votre courtier et de lui demander d'acheter des euros et de vendre des dollars en votre nom, en utilisant l'argent que vous avez déposé dans un compte professionnel spécial. Il vous donnera des instructions sur le montant que vous souhaitez négocier et le courtier s'occupera du reste. De même lorsque vous souhaitez clôturer la transaction en vendant les euros et en rachetant les dollars.
Tout bouge toujours grâce à l'assistance de courtiers. Le commerce social ne fait pas exception.
Le détaillant (ou fournisseur de signaux ou gourou)
Les marchand c'est juste une personne qui ne négocie que sur un seul marché.
Commerce sur les marchés moyen faire des transactions avec certains types de marchandises, intention de profiter des changements de prix de ces marchandises, à condition que le changement soit dans la direction attendue par le commerçant.
Comme déjà mentionné, dans le Forex, les transactions sont effectuées en fonction de la variation des taux de change, et avec les CFD, un trader peut faire de même avec le prix des actions, des indices ou des matières premières qui sont cotés en bourse.
Il existe différents types de commerçants, ceux qui font des affaires pour des institutions ou ceux qui font des affaires pour de grandes entreprises privées. Au lieu de cela, ceux qui négocient seuls et en toute autonomie sont appelés Détaillant, et ils travaillent sur les marchés avec l'aide d'un courtier, comme nous l'avons vu précédemment.
Habituellement (mais pas toujours), un commerçant est une personne expérimentée qui a étudié la structure du marché, ses caractéristiques et son fonctionnement. Fort de ces connaissances, le trader identifie les périodes favorables pour entreprendre des actions, c'est-à-dire pour exécuter ses opérations commerciales.
Les méthodes, techniques et stratégies que les commerçants utilisent aujourd'hui sont autant que les langues et les dialectes du monde.
D'autres s'appuient uniquement sur l'étude de données macroéconomiques pour comprendre les tendances mondiales et effectuer des transactions à long terme. Il y a ceux qui utilisent exclusivement des outils d'analyse technique, grâce aux plateformes informatiques, pour réaliser des opérations à court, moyen ou long terme, quelles que soient les données macroéconomiques. Il y a ceux qui font un peu des deux.
Il y a aussi ceux qui, à l'aide de l'ordinateur, créent des programmes qui ouvrent des opérations en leur nom, en cas de certaines conditions spécifiques de performance des prix, même sans l'intervention du commerçant.
Lorsque nous nous référons à un détaillant dans le monde du Social Trading, il est préférable de l'appeler "Fournisseur de signal"Mais chaque entreprise a tendance à appeler ses propres détaillants à sa manière. Par exemple, eToro jusqu'à récemment les appelait."Guru "alors que maintenant ils sont simplement "Les investisseurs"
Saviez-vous que grâce au Social Trading, vous n'avez pas besoin d'être un marchand pour gagner en un? OUVREZ UN COMPTE NAGA ET ESSAYEZ-LE!
(79,67% des comptes de détail CFD perdent de l'argent)
L'investisseur (ou suiveur)
C'est Le rôle que vous aurez.
Dans la grande machine de Trading Social, le investisseur est celui qui a choisi de recevoir les indications d'ouverture ou de clôture de certaines transactions, dans certains taux de change, directement d'un ou plusieurs détaillants préalablement choisis.
Qu'est-ce que cela signifie?
Cela signifie que si vous choisissez un marchand, ou ce que l'on appelle le meilleur fournisseur de signaux, chaque fois que ce dernier ouvre une transaction sur votre compte de trading personnel, le même type d'opération sera également ouvert automatiquement dans votre compte professionnel, grâce précisément au processus de Social Trading.
Processus identique lorsque vous déciderez de le fermer. Si l'opération du commerçant génère des bénéfices, son opération génère également des bénéfices. De même pour les pertes. Rien de plus simple.
Lorsque nous parlons d'un investisseur dans le monde du Social Trading, nous pouvons aussi l'appeler "Suiveur"Surtout dans le cas de ZuluTrade.
L'entreprise de commerce social
Celui qui fait que cette magie se produise est la société de trading social.
Ces sociétés sont en fin de compte soucieuses de communiquer, respectivement, les courtiers du fournisseur de signal avec ceux des investisseurs.
Dans la pratique, la société conclut un accord avec le courtier du fournisseur de signaux, convenant que chaque fois que le commerçant effectue une transaction, il doit immédiatement contacter la société de trading social. D'autre part, la société convient avec le courtier de l'investisseur suiveur que les ordres d'achat et de vente sur le compte de ce client proviendront de la société de trading social elle-même.
Lorsque le fournisseur de signal effectue une opération, la société la récupère et la livre respectivement à tous les courtiers investisseurs qui ont décidé de suivre cet opérateur. Tout courtier, une fois la commande reçue, l'exécutera immédiatement dans le compte de l'utilisateur, selon les détails contenus dans la commande.
Un autre modèle est celui proposé par eToro. Cette entreprise ne relie pas les courtiers et les investisseurs. EToro est lui-même un courtier à tous égards, et ses clients ont ouvert un compte directement auprès de cette société. Le processus de réplication des opérations est fondamentalement le même, mais tout est géré en interne.
Et c'est l'identité des participants sur le plus grand marché du monde, à travers la technique d'investissement la plus innovante, qui est le Social Trading.
Dans la leçon suivante, nous vous montrerons comment cette procédure de réplication est effectuée en détail.
Les processus de réplication du signal Dans le commerce social, cela peut sembler élémentaire, mais en réalité, il se cache derrière un excellent travail de coordination et d'interaction.
Dans cette leçon, nous décrirons la réplication. modèle d'entreprise agissant comme intermédiaire entre différents courtiers, par exemple, comme nous l'avons dit, ZuluTrade. Ce modèle est le plus complexe, donc la compréhension de ce processus peut automatiquement imaginer le type le plus simple d'entreprises comme eToro, qui n'agissent pas comme intermédiaires, mais sont des intermédiaires.
Analysons-le dans tous les détails.
PHASE 1: le début du signal
Tout commence par les fournisseurs de signauxCe sont les opérateurs que vous avez décidé de suivre. Si vous avez décidé de le suivre, vous choisissez de reproduire vos signaux d'achat et de vente sur votre compte.
Supposons que le fournisseur de signaux décide d'aller longtemps en EUR / USD pour un lot standard (si vous ne savez pas ce que cela signifie ou comment cela fonctionne, je vous recommande d'étudier le cours Forex, car connaître ces détails est essentiel pour votre survie).
Le fournisseur de signaux informe ensuite, via sa plateforme de trading, le courtier qu'il souhaite ouvrir cette transaction.
Le courtier, à réception de l'ordre, effectue immédiatement deux opérations. Tout d'abord, exécutez l'ordre dans le compte personnel du marchand, au meilleur prix à ce moment, supposons 1,3000; Deuxièmement, informez la société de trading social que vous venez de recevoir l'ordre du fournisseur de signaux d'acheter EUR / USD pour un lot standard au meilleur prix possible à l'époque.
PHASE 2: la modification
La société de négoce social reçoit le avis du courtier se référant à ce fournisseur de signal particulier.
À ce stade, la société de négoce social effectue une Retrouvez tous les followers des investisseurs qui ont lié votre compte à celui du fournisseur de signal, puis autorisant les répliques de signaux. Une fois que tous les abonnés investisseurs ont été identifiés, la société de commerce social envoie une commande de réplication filtrée de cet ordre aux courtiers de chaque investisseur.
"Qu'entendons-nous par filtrage?"
La commande d'origine était d'acheter 1 lot standard d'EUR / USD, au prix de 1,3000. De nombreuses plateformes de trading social offrent la possibilité de personnaliser le fonctionnement du suiveur, afin d'ajuster au maximum les risques et les objectifs d'investissement au fonctionnement du fournisseur de signal choisi pour la réplication du signal.
Les filtres qui peuvent être appliquées sont différentes: de l'inhibition de la réplication de signaux supplémentaires une fois qu'un nombre total de positions ouvertes est atteint, à l'exclusion totale de la réplication des transactions effectuées dans une paire de devises spécifique; de la réplication des signaux du fournisseur de signaux, mais en sens inverse (avec une opération opposée), à leur réplication avec une taille de lot proportionnelle, par hypothèse 50%, ou en définissant une certaine valeur fixe (par exemple, 0,1 lot standard, tel que le fera plus tard avec Zulutrade).
Cela signifie qu'avant de transmettre l'ordre au courtier afin qu'il atteigne le compte du suiveur, l'ordre est affecté par les modifications apportées par la société de trading social, modifications que le suiveur a précédemment choisies et établies.
Pour faire quelques exemples, dans le cas de la configuration inverse, le bon de commande à 1,3000 sera converti en bon de commande à 1,3000, c'est-à-dire une opération inverse. Dans le cas d'une réplication du volume de transaction à 50%, nous ne parlerons pas d'un lot standard, mais de 0,5 lots standard. Dans le cas de la taille de lot fixe, nous parlerons d'un changement de 1 lot standard à 0,1 lot standard, qui est un mini lot.
Par conséquent, l'ordre démarrera auprès des fournisseurs de signaux, il sera pris en charge par la société de trading social qui le filtrera et le changera, selon les instructions de l'investisseur suiveur, puis le transmettra, modifié selon les décisions, au courtier investisseur.
Cela peut ne pas sembler à première vue, mais cette bizarrerie du commerce social du processus de réplication est un grand avantage pour les investisseurs, en plus d'être un outil très efficace de contrôle des risques.
Faisons un autre exemple pour donner une idée. La commande du marchand était pour un lot standard, et c'est ce qui a été fait sur votre compte.
Vous savez qu'avec un lot standard, la valeur du pip est d'environ 10 $. Supposons qu'avec ce commerce, le fournisseur de signaux a perdu 10 pips et possède un compte de 10 000 $. Pour lui, ce sera une perte de 100 $, dans un compte de 10 000 $, soit une perte de 1%. Imaginez si vous répliquiez le même métier, avec la même taille de lot, sur votre compte, mais le vôtre n'était que de 1 000 $. Pour vous, la perte à ce moment-là serait de 10%. Une grande perte pour votre compte, et avec seulement 10 pips. Il s'agit vraiment d'une situation risquée et doit être évitée complètement.
Pour surmonter ce problème, la société Social Trading vous permet décidez par vous-même Quel sera la taille du lot auquel les opérations du fournisseur de signaux seront répliquées sur votre comptequels que soient les choix du commerçant concernant la taille du lot.
Dans l'exemple ci-dessus, vous pouvez informer la société de trading social que vous souhaitez que les opérations de ce trader soient répliquées sur votre compte avec une taille de lot de 0,01 lot standard, qui est un micro-lot. Dans ce cas, une perte de 10 pips pour vous correspondrait à une perte d'un dollar, ce qui dans un compte de 1000 $ serait de 0,1%. Maintenant, nous sommes définitivement à des conditions plus raisonnables.
De même, supposons que votre compte soit au lieu de 50 000 $. À l'époque, vous seriez plutôt bien couvert, grâce à la taille de votre compte, et vous voudrez peut-être reproduire ces transactions avec une taille de lot encore plus grande que l'opérateur, peut-être avec 2 lots standard.
Comme vous pouvez le voir, le Social Trading est principalement composé de ces concepts de base du domaine Forex et de la capacité de faire les bons calculs pour comprendre comment dimensionner correctement votre compte.
PHASE 3: accueil
Revenons à notre processus de réplication.
La société de trading social reçoit la commande de l'agent du fournisseur de signal, la filtre et, si nécessaire, la modifie selon les directives de chaque investisseur suiveur individuel, puis la renvoie aux agents de tous les suiveurs qui la suivent. ils ont suivi. .
À ce moment, le courtier de l'investisseur suiveur reçoit l'ordre.
L'investisseur avait précédemment autorisé le courtier à accepter et répéter toutes les commandes reçues de la société de négoce social, de sorte que le courtier procède comme indiqué et ouvre le même type de bon de commande EUR / USD sur le compte de l'investisseur, mais évidemment avec la taille de lot choisie par lui.
Toutes ces opérations, bien qu'il ait fallu quelques minutes pour les lire et puissent sembler complexes, grâce aux nouvelles technologies et à Internet, sont traitées en quelques dixièmes de seconde.
Glissement de terrain: de quoi il s'agit et comment il se forme
Malgré la vitesse extrême et la précision croissante, l'exécution de ces opérations a quand même pris du temps, même si elle est minime.
Un prix de change, même sur une courte période, peut changer. Cet aspect donne naissance au phénomène appelé "glisser"
Nous avons dit que le bon de commande avait été effectué en EUR / USD à 1,3000, car pour le courtier du trader c'était le meilleur prix à l'époque. L'ordre commence par l'ensemble du processus et arrive après quelques instants chez le courtier de l'investisseur, qui demande immédiatement le meilleur prix pour son client.
Mais, étant donné la forte volatilité à cette époque, vous ne pouvez trouver que 13001 comme meilleur prix, ce qui est une grande différence.
Eh bien, cette différence est appelée glissement.
De toute évidence, le dérapage peut être préjudiciable à la fois pour l'investisseur et en faveur, dans le cas contraire où le prix revient un peu et nous permet d'acheter ce taux de change à un meilleur prix.
De plus, le temps n'est pas le seul facteur de création des conditions de glissement. Como sabe, un corredor, para ejecutar las órdenes de sus clientes, tiene acceso a proveedores de liquidez, que están conectados a los niveles más altos del mercado, que proporcionan los precios que se cotizarán en la transacción. Los diferentes proveedores de liquidez podrían superar los diferentes precios, por lo que entre los corredores con diferentes proveedores las cotizaciones pueden variar, no solo por la variación de tiempo, sino precisamente por el precio en sí.
Ahora que hemos visto cuán preciso es el proceso de replicación en Social Trading, podemos continuar y analizar en detalle el rol del inversor o seguidor, que será suyo y el del Proveedor de señales.
Comencemos con el último.
¿Qué significa ser un Proveedor de señal ¿media?
Por qué hacen eso y que ganan con el comercio social?
¿Dónde operan y ¿Cómo puedo encontrar los mejores?
Simplemente continúe con esta publicación y encuentre las respuestas precisas a estas preguntas.
El origen de un comerciante.
Algunos operadores comienzan a hacer operaciones de Forex por curiosidad y luego se apasionan, otros simplemente buscan una forma de ganar dinero sentados en la computadora. Algunos hacen que las actividades comerciales sean un trabajo extra antes de que se convierta en un trabajo a tiempo completo, y otros siempre lo han hecho como un trabajo real.
Comprender el viaje evolutivo de un comerciante no es muy importante, lo que realmente importa es Comprenda cuáles son sus capacidades actuales y el poder de su estrategia.
Por ahora hemos estado en el mundo de Forex y Trading por más de 10 años, y conocemos a mucha gente. Hemos visto comerciantes que después de 20 años de estudio y práctica todavía tenían dificultades, porque estaban cometiendo los mismos errores de principiantes una y otra vez. We’ve also seen beginners make a mistake just once and don’t commit it ever again, because once was enough for them to learn.
Obviously, a certain number of years are needed to gain experience and acquire the necessary experience to be flexible and be able to react quickly to the market changes.
However, what really matters in the end are the strategy, la results, et le self-control. When a trader studies he does so to create a set of rules. These rules will help him to know if, when, and how to open or close a trading operation.
This set of rules will then constitute his strategy skeleton.
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The 3 great Signal Provider’s schools
These rules can be based on three different schools, and on the mergers and contamination of these together.
FUNDAMENTAL ANALYSIS: a signal provider in this field is an expert in interpreting the many news, either monetary, economic and political, that are released every day by the news agencies. When he opens operations, his vision is usually long-term, weekly or even monthly, because usually the news of this kind are not immediately reflected on the price, but in the long run. Sometimes, however, some economic data make the price literally explode in one direction, creating (risky) opportunities of immediate profit. A famous example is the change of the central banks interest rate, like the Fed or ECB respectively on dollar and euro, or the US unemployment data.
PRICE ACTION: a signal provider experienced in the price action does not worry about knowing what are the news moving the market, because he’s convinced that the price action shows everything already inside. In other words, the daily, weekly and monthly movements the price performs are able to show to the trader the intention of the price to take a certain direction in the near future. Doesn’t matter what that specific data says, and how it should be interpreted, the trader believes that the price action has already said everything about what the price want to do, and the direction it want to take.
INDICATORS: indicators are technical tools, often charts, which are used via electronic trading platforms. In the Forex world the most popular and most used by Signal Provider is called Meta Trader 4 or MT4. The indicators available are thousands of different categories. Furthermore, with some computer programming knowledge, they can also be created independently. To name one among all, the most famous is the moving average. The program calculates the values of a certain number of previous periods, chosen by the trader, and reports on the chart the average of these values with a dot. Time passing, these points take the form of a curved line. The trader expert in the use of indicators is able to interpret that behavior and to get indication for guessing the future direction of the price.
Usually we refer to Price Action and the use of indicators as “Technical Analysis"
In order to respond immediately to a common question, there is no better school than others. It all depends on the trader’s style and his or her preferences.
Most traders, however, specializes in one of these areas, but they also try to fill the deficiencies of each with additional knowledge from the others.
As the trader builds his strategy, he’s able to analyze the results. This doesn’t mean just to look at the results to see if it has gained or not. It means, above all, to analyze how these results have been created, what are the winning percentages, what are the risks of this strategy, what are the weak points, what are the strengths.
This way, that is made also of attempts, testing and results analysis, the trader builds his own strategy, his war machine. On InvestinGoal we show you what are the Signal Provider’s parameters and data to be analyzed in order to understand how his performance take form, but above all, what are the risks in following him.
The best Signal Provider’s quality
Finally, after the strategy and the results, comes the self-control. Yes because, even if a trader has created the most solid and profitable strategy of all time, but he’s not able to comply with those rules, sooner or later he will have big problems, because, as we all know, market does not forgive anybody.
This is one of the main reason why many traders choose to define the rules and turn them into a computer language, creating a virtual machine, a program that trades on their behalf, in a semi or fully automatic way.
These programs, called Expert Advisors or EA, constantly follow the evolution of prices and data, and they open and close operations on the occurrence of specific conditions, previously set by the trader.
These programs are great ways to remove completely the emotional and the psychological factor from a trader’s operation.
However, the machines, no matter how complex, can never replicate human intelligence and sensibility. There are times in the market, in which only a human being can understand what is happening, and decide what is better to do or, even more important, not to do.
Why deciding to become a Signal Provider
The Signal Provider is a trader who has decided to share his trading strategy with other investors. And to respond immediately to a classic question and dispel all doubt
“Yes, Signal Providers are paid to do what they do, they don’t do it for free.”
It would be strange if someone who has a method to make money would share it with the world without wanting anything in return. Signal Providers make no exception. The interesting thing is that, in most cases, it won’t be you to pay them.
Les compensation system for the signal provider usually is structured in such a way that they earn only if there are investors who are following their signals and are replicating them using real money accounts.
This means that only those who produce good performance and good results will be able to attract investors eager to follow their signals, and thus make a profit. Bad Signal Providers very unlikely will be able to earn from their Social Trading activity.
Moreover, we must also say that the Signal Provider, from the moment he decided to collaborate with the Social Trading company, he also give it the permission to record every transaction he make, in every detail. This way the company can show the Signal Provider’s historical data to the potential investors, who can then analyze in advance the possible future performance and the potential risks of the trader. En otras palabras, this situation of constant control pushes a Signal Provider to behave well throughout his career, because he knows that every mistake will be recorded and shown to the present and future investors.
This may sound all roses, and a newbie of Social Trading might think that this way it’s literally impossible to go wrong, since sensitive information is visible in advance. The reality however is different.
First of all, it should be perfectly clear to anyone who wants to invest that past performance are in no way guarantees and certainty of future performances. What can, and should, be certain is the protection the investor has to build to safeguard his investment.
Second, the experience shows that many Signal Provider adopt strategies that, at first glance, may seem very good and convenient, but that actually hide very large inherent risks. The good news is that an experienced eye has the ability to recognize these risks from the analysis of the Signal Provider data.
Where are they and How to find the best ones
To answer this question we will not dwell further.
First, find out what are the best Social Trading networks where to begin to exploit the Social Signals Provider.
Next, we have created two specific lists of the best Social Signals Providers for the two main Social Trading brokers. You can find them here:
Investors who choose to invest their money with Social Trading are called Social Traders, or even “Seguidores"
Basically, it’s precisely what they do, ie following traders’ signals.
This doesn’t mean that, to be successful, the only thing a follower has to do is following someone at random, and the game is done. This would not be investing, but tempting fate.
A follower must first arm himself of the right mindset, and then of the right knowledge. In this lesson we will see together the main characteristics that a follower must possess.
A Follower is an investor who has decided to make his own money work for him.
First of all, a good investor invests only the capital that, in the event on being undermined, it would not hurt his financial status. He never puts into play sums of money that could jeopardize the stability of its economic and financial situation.
On the other hand, a follower is aware of what it means to keep all the money in the bank. While this may give security, on the other hand he realizes that all his money is deposited according to the value of a currency, and that the value of his savings, in any case, is subject to the changes in the currency exchange market.
For this reason, diversifying to some extent the use of money is a good technique to increase the financial protection.
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A Follower’s goal in Social Trading
Que purpose of a follower could be?
Here we enter into a very relative field, because the goal of a follower investor is something personal and, above all, that must be made clear at the outset.
One of the most common goal in the investment world is to achieve an annual return of 4% or 5% on the investment, in order to shelter the money from inflation and maintenance costs. This is a very conservative and respectable goal.
With Social Trading, however, it is reasonable to aim to much more. A follower knows that with Social Trading he will exploit the potential gain that Retail Traders can achieve with their trading on the Forex market and CFDs. The amounts of revenue that good traders can realize are much higher than any other investing method we have seen in the first course. There is no comparison, and it’s not necessarily true that with these traders or Signal Provider an investor will risk more, compared to entrust his own money to someone else who invests it for him.
We are plenty of incidents of people who have entrusted their own money to the so-called “experts”, and then, all of a sudden, they discovered their money was not there anymore. Not that it was necessarily stolen, but maybe just invested badly in risky operations.
With Social Trading, how much you want risk is up to you, and most of all, money are always in an account belonging to you, and you can check their status and what Signal Providers are doing whenever you desire.
The Retail Trader manage the trading risk in first person, and thanks to this responsibility, his earnings are much higher. A Follower runs the risk in first person too, but not of direct trading, as traders, but of the management of the traders themselves.
That’s why the earnings of an investor Followers may be much more higher than the other instruments.
A follower, then, must know how to manage risk.
He must not know which particular trading technique a Signal Provider uses (if you knows it, however, much better), but it must be able to understand what performance this strategy is able to produce, and especially against which risks.
It’s clear that the risks of a Signal Provider’s strategy will be proportionally reported on the investor Follower’s account, who has decided to follow him. A Follower should always think that when he replicate a Signal Provider’s strategy, he replicates first the risks, and later then, the gains. Reversing this thinking and think first to earnings and then, if appropriate, to risks, can be a very dangerous behavior, if not fatal, for an account.
To make a comparison, we can say that being a follower investor is like being a fund manager y un portfolio manager. The only subscriber to the fund will be you, and you will also be the one who will build the strategy and the portfolio.
As already mentioned, it follows that you will be solely responsible for your money, and your choices will determine the success or failure of your investment.
Having a cutting hedge mentality
Taking these responsibilities upon yourself may seem unnecessary and risky if we think that we may instead delegate them to someone else. On this point, however, it’s necessary to take another step forward regarding the mentality.
The dogma which you must internalize about money and investing is that
the responsibility is always and only yours. Siempre.
Even when you decide to let someone else invest it. Those who will lose your money cannot be the managers, because by definition that is Your money, not theirs. You can accuse them of everything you want, and maybe you’ll even be right, but you’re the only at the end that have lost that money.
You never have to forget that the responsibility of your money is always and only yours. For this reason Social Trading, which allows direct and constant control on your capital, it’s advantageous from this point of view.
It’s also true that responsibility can cost, because if you’re not prepared to make the right decisions you can take excessive risks and waste money. That’s why we decided to create InvestinGoal.
When you will learn how to handle this huge responsibility, you will also have access to the great Retail Trader’s potential, and you’ll be able to take advantage of their performance.
As we’ll see in the next lesson, your first great responsibility will be to know the factors that characterize the Signal Provider’s style and strategy, and then to know how to analyze them.
Analysis of the characteristics of the Signal Providers
What are the characteristics with which we can describe and then distinguish the styles of different Signal Providers?
It should be stated at the outset that each Signal Provider, or each Retail Trader in general, has his own style.
It’s very difficult to find two traders who do the exact same operations, even if they did the same trading course, with the same instructor, and have the identical knowledge. In the trading style of each person there are also their own personality, their own experiences and their own expectations, all of which will never be the same between one person and another.
If the operations are totally identical, it simply means that both are using an Automated Trading system, ie an Expert Advisor.
That being said, there are certain parameters that a reasonable Follower investor should consider every time he intend to analyze the performance of a Signal Provider, before deciding to follow his signals.
Let’s see the most important in detail.
How long the Signal Provider has been working?
That’s the first point, the most important place to start. The first thing to do when you look at the Signal Provider’s statistics is noticing his age. Not the trader’s chronological age, but how long the trader has been connected to the Social Trading company, and how long his data have been recorded and made available for consultation.
It’s clear that the statistics that are based on data recorded for only one month will be much less relevant and useful, for the purposes of the analysis, of statistics of two or three years. As a general rule, it’s essential not to go below a year, as a minimum. If a Signal Provider shows very good performance, maybe even safe, but has not yet completed a year of “age”, then it’s better to wait to connect him, and observe him again in the future.
The reason is simple. Markets are always changing, and it’s important to see how a Signal Provider behaves in different situations. Usually in a year’s time a Signal Provider will have faced various market’s scenarios, and you’ll be able to look at how he behaved.
Otherwise, if you trust a trader with only a few months of great records, you risk to connect to a strategy that worked well only for that particular moment in favor of the market. But, finished that period, you don’t know what to expect, and there may be unpleasant surprises.
Number of instruments used
There are Signal Providers that trade on several currency pairs or stocks. There are others who specialize exclusively on just one or two.
This is another important point to focus on, not because it’s better or worse to do one or the other thing, this is subjective and each style has its strengths and weaknesses. More than anything else, it’s important to contextualize another details we will see shortly, that is the maximum number of transactions open simultaneously.
In the case of Forex, but the same goes for CFDs, traders who use different currency pairs usually prefer to decrease the risk incidence by using their technique on multiple currency pairs.
Some simply use the same strategy on several pairs, considering that if with a certain pair at some point it will perform badly, there will be others in which instead it will do fine. On average, this will always lead to a positive result, and in the meantime he will avoid to go through completely negative periods, as it would be in the case of using the strategy on a single pair.
Other Signal Providers, instead, use complex diversification strategies, that take into consideration different parameters and technical data, including the most important positive and negative correlation between instruments. It is called positive correlation when two instruments, in our case two currency pairs, move more or less in unison, in the same direction and at the same time. On the contrary, it is called negative correlation when they move on the contrary to one another.
The other category, instead, refers to those Signal Providers who focus their strategy on one or two currency pairs or company’s stocks. These traders tend to specialize and deeply understand the behavior of the instrument on which they operate, and are able to recognize the various phases that particular instrument is going through, and can therefore adapt their strategy if necessary.
In case they use Expert Advisors, Signal Providers optimize as much as they can the automatic strategy, to reflect as much as possible the peculiar behavior of that instrument, in order to obtain the maximum return.
Number of trades open simultaneously
Most (not all) of the Signal Provider, either if they diversify on different pairs, or if they focus on a single one, at a certain point of their trading life they will end up having more than one operation open on their account at the same time. This can happen for several reasons we will see shortly.
The important thing is to begin to understand that this is one of the most important parameters to consider.
In general, increasing the number of simultaneous trade can quickly increase the level of risk, although this may also not always be true.
Let’s consider a Signal Provider that, historically, had moments when he found himself with a maximum of 20 simultaneous operations. I can already anticipate you that 20 is a value that, taken individually and out of context, could be risky, but let’s move forward in the examination. Indeed, the Signal Provider has diversified its strategy on 10 different currency pairs, and each pair has maximum 2 open simultaneously operations. Now, obviously the value 20 takes a whole different meaning.
As we will see later, however, a large number of Trade opened at the same time it’s often the first detector of a risky strategy. Soon we will see why.
Average number of operations performed
Does the Signal Provider open a few or many transactions per day? Or per week? Or per month? Numerically, how many is “few”, and how many is “many”?
To this type of questions we can answer as we did by referring to the number of simultaneously open trades, saying that everything can be relative. A trader who opens an average of 10 trades per day, and uses 10 different currency pairs, will be different from a trader who will instead open 10 trades per day, but on a single pair.
Understanding why a Signal Provider opens more or less transactions is something that would require the full knowledge of the strategy used by him, which, except for a few cases, is not possible to know.
But what we can do is identify how many transactions the trader makes on average per day, per week and per month. One of the first methods for controlling a Signal Provider’s actions is derived from these parameters. If I notice a significant increase in the number of the daily, weekly or monthly trades, it means that something has changed in the trader’s strategy, or simply that he’s beginning to no longer respect it as before.
In any case, this way you’ll find out right away if there are any changes, and you can make your considerations.
The duration of a trade greatly affects the connotation of a Signal Provider style. As we have seen, even during the forex course, traders can be divided into three main categories.
There are the Trend Follower traders, that implement long-term strategies. Here, each operation is open to ride the long trend movements, and they can remain open for several days or even a few weeks or months.
Then, there are the Swing Traders, those who open positions to earn from the market swing, which are usually closed in a few days, usually within a week.
Finally, there are the Day Traders, whose operations are always closed by the end of the trading day, and among these, Scalpers, the fastest ever, that open and close many transactions that are maintained for a few minutes, if not seconds.
The number of operations that a trader will be able to close with profit will form the Signal Provider’s winning percentage.
This is a number that can be very relative, and that needs to be contextualized with another parameter to make a concrete contribution to the analysis, as we will see shortly.
The key thing to do with this percentage is to be wary of extremes. Obviously, it’s easy to be wary of a Signal Provider who terminate in profit less than the 30% of the trades, because it means that his strategy is very week. But we must be wary also and especially when percentages are too high, generally ranging from 70% upwards.
Some might argue that the higher the percentage the more the trader’s strategy will be safe, because it never loses. Well, the problem is precisely that. A no-losing trader has never existed, and will never exist. Losing every so often, when trading in the markets, it’s a normal thing.
If you find a trader with a winning percentage of over 70%, it doesn’t mean he’s very good, but simply that he tends to avoid of closing the losing operations, leaving them open for a long time in order to not take the final loss, in the hope that sooner or later the price will return on the right side.
This is a very risky strategy, because the market can go against you much longer than what your capital can support, regardless of how much liquid you are.
To cut losses is crucial, those who do not run a very big risk, and if you decide to follow this kind of strategies, you will inevitably run it too.
Remember, the market takes no prisoners, and those who are not willing to suffer a small loss are destined, sooner or later, to suffer the biggest loss of their life.
Risk / Reward
Les risk/reward is calculated by relating what an operation aims to gain with what is willing to risk.
If a trade has 100 pips target and the stop loss is set at -50 pips, the risk/return ratio will be 2:1, or directly 2 making the division 100/50 = 2.
Another example, if the expected profit is 75 pips and the stop loss is set to -60, the risk/reward will be 1.25 (75/60 = 1.25).
When the risk/reward ratio is greater than 1 it means that the expected profits are greater than the losses, as a number of gained or lost pips. Conversely, if the risk/reward is less than 0 it means that losses outweigh gains, as a number of pips.
This value is very useful when correlated with the winning percentage. In fact, in addition to knowing if the operations of the traders get a number of pips higher than what they lose, it’s essential to know how many times, on average, that trader gains or loses, because the scenario could change a lot.
Let’s consider a risk/reward of 2. It means that a successful operation can earn twice of what it can lose. This sounds great, but then we discover that the winning percentage is only 30%. So, despite the fact that the Signal Provider, when he wins, take much more pips compared to when he loses, the times when it loses are much more than the times in which he wins. Such a strategy has a major deficiency.
Another example. A risk/reward ratio of 0.70, so with losses greater than gains, but with a very high winning percentage of 68%. A trader of this type has stop wider than profit, but the times the stop is taken are much lower than when the trade goes into profit. Most likely, such a trader will be profitable in the long run.
Using risk/reward ratio is very useful when we find Signal Providers that have a very precise operation style, with average levels of profit and stop always equal. In such cases, doing the calculations is very easy and convenient.
Now that we have listed the main parameters for which a Signal Provider can be analyzed, in the next lesson we will look at the most popular categories of traders.
The 4 (plus 1) Signal Provider categories
We have said that every trader, ie each Signal Provider, is unique, because each person carries in trading the total sum of his experiences, mentality and psychology.
This is why it will be difficult to find two traders completely equal, unless they both use the same Expert Advisor, but that’s another story.
However, using the parameters we saw in the previous chapter, we can classify Signal Provider into categories. Let’s see the most famous.
Long Term Signal Providers
Trading over the long term means trying to ride big price movements, also called trend. These movements can last for days, weeks, sometimes even months.
A Signal Provider that applies this kind of strategy usually makes several attempts to try to take the right start of the trend. During these attempts, he often undergoes a lot of stop-loss, which, however, are usually small in terms of pips. When, instead, the trend starts, then with some positions he remains steady inside the movement, trying to ride it as much as possible, then he closes those few operations with large profits.
These characteristics make sure that the statistics usually show a low winning percentage, because of the different attempts to find the start of the trend, but compensated by a very high risk/reward, because the average amount of pips of the profitable transactions are much higher than that one of the losing operations.
Day Trading Signal Providers
A Day Trader usually opens one or more positions during the day, with the intent to close them in the same day or at least on the next day, rarely two days later. Therefore, the duration of his trade goes from a few hours to two/three days maximum.
This Signal Provider is trying both to ride those little trends that sometimes forms in a single day, and also to take advantage of the many days of range, ie where the price continues to bounce within certain levels, without taking a definite direction.
By closing all his positions within the day, the average pip size, both of profits and stops, will be lower than the average range value for that particular currency pair. For example, if we consider that EUR/USD moves on average in a range of 160 pips per day, a day trader who operates in this pair will always have an average values of profit or stop below this value.
Swing Trading Signal Providers
Swing Trading is somewhere half way between the long-term trend following and the daily day trading.
This trader looks, with all the technical tools at his disposal, to identify the beginning of those market movements, sudden and decisive in a particular direction, called precisely swing.
Usually, the time horizon of this kind of trades is one to four trading days, in any case within a week.
Scalper Signal Providers
Traders who do scalping are the fastest of all. In a single day they can even make hundreds of transactions, but that usually last from a few seconds to a few minutes.
With a so limited time horizon, the expected profits per transaction are obviously of very few pips, as well as the stop. Everything takes place in a few minutes, for a few pips, for many times a day.
It’s a frantic trading, and very few traders are able to bear certain rhythms, and be in profit at the end of the day, without the use of Expert Advisor or automated programs.
Usually the winning percentage of these Signal Provider is high, but against a minimal extension of profit and a high number of transactions per day. The speed of positions handling and the minimum profits for operation make these traders, in many cases, difficult to replicate successfully.
Martingale Signal Providers
The martingale is not a specific traders category, but rather a trading technique that all four the above categories can use.
The trader who uses martingale technique has a special operations management when they get in loss. In practice, when a trade goes in loss is not closed, but left open. In addition, another one is opened in the same direction of the first one.
In other words, let’s suppose to have a buy operation , ie a bullish perspective. The more the price goes against the first operation, ie it falls down, the more the Signal Provider will open other operations in the same direction of the first one (Long), in order to lower the average entry price, or the break-even level.
In practice, when at some point the price will turn in the favorable direction and will begin to rise, the trader won’t have to wait for the price to go back to the price level of the first trade to be at least at break-even, since there will be the other transactions that will begin to earn pips.
The price, at which the sum of wins and losses of the various trades is equal, will be lower, so more achievable, compared to the price of the first trade, which will be much higher. This means “to lower the entry price” or “averaging down”.
These are the main categories under which, more or less, all the Signal Providers can be categorized. Obviously, there are many nuances in between these categories and boundaries are not always so definite.
In fact, many of the Signal Provider could easily fall into more categories, or could simply use, at the same time, techniques that belongs to different categories.
In the next lesson we will see what are the risks for a follower investor with each of these categories.
Like any type of investment instrument, Social Trading also has a certain amount of risk.
Each Signal Provider category has some parameter characteristics of strengths and, of course, of weaknesses. In this chapter, we will concentrate on the latter.
In addition, a Signal Provider’s operation is not the only risk-carrier, but there are others too. However, don’t worry. Once you will know it, it will no longer be risk, but only another element of the puzzle, to be considered together with all the others.
Risk with a long term Signal Provider
Rather than risk, for a followers investor who decides to use this kind of Signal Provider, we should talk about the need to have the right mindset.
The problem, if you choose to set up a long-term strategy, is that most likely, for a long initial period, you won’t see any particular profits, but rather small losses.
In general, Signal Providers who seriously use long term techniques are the least risky among all, because they never leave losses to run, but instead they cut them trying instead to let profits run. It won’t be an immediate process, and many losses will be cut before you see some nice profits exploding into your account.
For many followers investors this can be a problem because they may think they have made the wrong choice, and they may leave the Signal Provider without giving him enough time to express its potential, perhaps missing an important opportunity.
The Long Term Signal Provider, therefore, are not good for those who cannot wait. However, as said many times in the first investing course, the ability to manage risk, and so to be able to wait and have the right patient, is one, if not the most important, among the qualities that a good investor should have.
Risk with a day trader Signal Provider
As mentioned for the Long Term, even for Day Trading Signal Providers we don’t properly speak of risk, but rather of right mindset.
If for the Long Term you could see a long series of small losses before seeing a profit explosion, with Day Trading you could encounter some series of losses and profits very similar to each other, before seeing a real and permanent capital increase.
In other words, in the day trading techniques is very common, for certain periods, for profits and losses to be equivalent, and that the account balance continues to rebound without rising, remaining fairly stable, or maybe down a little bit.
Again, it’s just a matter of having patience in the strategy of the Signal Providers you have previously analyzed. If his modus operandi has not changed, it probably means his strategy is going through a non-convenient cycle, but that, given the statistics on which it was founded, sooner or later it will come back to bring new profit to the capital.
It’s all about controlling risk and have the right patient.
Risk with a swing trading Signal Provider
This category, as always, is a little bit half-way between the long-term trend follower and the day traders.
As with the long term, there may be several attempts to catch the swing ending with stop loss. As with day trading, profit and loss (although the extent of profits is usually much greater than the losses) may be equivalent, or lead to meager gains even for long periods. So, here also you need a good dose of patience and acceptance of the strategy.
Did you know that thanks to Social Trading you don't have to be a Trader to earn like one? OPEN AN NAGA ACCOUNT AND TRY!
(79.67% of retail CFD accounts lose money)
Risk with a scalper Signal Provider
From the scalping category onwards, we can rather talk about real risk.
The main problem in applying such a strategy lies mainly in the slippage. As you know, the slippage is that very small difference between the price at which the Signal Provider’s trade was executed with respect to the price at which the follower’s trade was executed on his account.
It’s a very small difference, often against you, caused by the inevitable passage of time, although very short, during the replication process, and by the small price differences that may exist between different brokers.
With a Scalper Signal Provider you will have a huge amount of replicated trade, each one with its intrinsic level of slippage. Considering that the profit margins of Scalpers are very tight, even in the order of less than ten pips or just a couple of pips, if moreover you’ll have to to subtract each time the slippage, you run a real risk of compromising the strategy’s performance.
For this reason, extreme scalping strategies must be avoided in order not to see the potential gains eroded by the multiplication of slippage without brakes.
Should be further noted that some Social Trading company make sure to not allow Signal Providers to use extreme scalping strategies.
Risk with a martingale Signal Provider
In no uncertain terms, for us these are the most risky of all.
But we must also recognize that, to an inexpert eye, they are the most attractive, and it is here that the trap can be triggered.
By not accounting their losses, they are the only traders that, for several days, even in a constant way, could give you only profits. In addition, since the losses are recorded rarely, you will often find them in the top positions of the Signal Provider’s ranking proposed by the Social Trading companies.
As mentioned before, the methodical willingness to not cut losses is the most risky thing you can do in trading and investing in general. On the other hand, it’s also true that such a technique, very often, could prevent to account a loss when the price takes another direction. It just takes to wait a few days, and the martingale takes its course, quickly recovering all the losses in order to save the situation and return at break even, maybe even with a small gain.
The problem is that this does not always happen. As said and repeated many times, the market, despite all the statistics a person can study, is an irrational creature. There will be times, and you can bet that sooner or later they will come, when the price will not retrace his steps, even after weeks, running violently in the opposite direction than desired.
While increasing the trades number allows you to recover quickly, I’s also true that, in a situation in which the price won’t come back, that high number of losing trade will dramatically increase the risk due to the level of overall losses.
If you are not sufficiently prepared, these situations can be fatal for your account.
The commissions risk
Up to now we have seen the psychological or technical risk of following one of these Signal Provider categories. Now is time to speak of another possible risk, which can be found in all the Signal Provider categories seen so far, but that affects the most the scalping and martingale Signal Providers.
To let you understand, I have to, first of all, explain in detail how usually a Signal Provider gains sharing his signals through a Social Trading’s company.
For sure you remember, from the lesson in Forex course, that when you open and close a trade via a broker, every time he makes us pay a spread, which is calculated by simply adding a small amount to the real market spread. In the case of Forex, usually the broker adds about 1 to 3 pips as spread, but this can vary both for the broker, or for the currency pairs taken into account.
In any case, the spread is the profit that the broker puts in his pocket every time you open and close a trade. Regardless of whether your trade has gained or lost, you always pay the spread.
In Social Trading the earnings, both for the company and for the Signal Provider, derive precisely from that spread.
In practice, when a follower connect his account to the Social Trading company, this company contacts the follower’s broker, and an agreement is signed. This agreement usually concerns the operations that will be open on the follower’s account.
All the spreads the broker will earn depend on the fact that his client is following the Signal Provider via the Social Trading Company. The broker therefore agrees to pay the Social Trading company a part of the spread paid by the follower in every transaction, in the form of commissions. The Social Trading company, in turn, will correspond a part of the spread to the Signal Provider that generated the signal.
I’m sure that now everything starts to be clear. We can now make two observations:
- A Signal Provider gains if and only if he’s followed by follower investors with a live account, with real money. All those who follow him with demo account won’t make him earn anything
- The more operations a Signal Provider open, the more fees he collects, regardless of whether his operations made the followers gain or not. The spread is always paid.
It’s obvious that, given these conditions, many presumed traders are not landed in the Social Trading circuit to share their experience and, at the same time, to earn some extra money, but rather to gain only thanks to the fees, even though they knew very little or nothing about trading.
Now you understand why especially Scalper and Martingale are a high risk from this point of view, in particular martingale. Many of these alleged traders rely on this rather simple mathematical procedure, which in the short term can yield excellent and very attractive performance to the inexperienced follower.
Imagine. A very high percentage, or even the 100%, of profit trades. Almost no losse. Steady profits every day. This may sound a dream, and in fact it’s just that, a dream, or rather a mirage.
Many followers investors, who have tried Social Trading without any knowledge and experience, have come across these sharks. You can imagine how it ended for almost all of them. A very brief period of happiness before the great sword scythe their accounts.
The hard Social Trading truth
Your legitimate consideration may be “But, by doing so these Signal Provider will also risk their own money. While they earn commissions, on the other hand they will lose their capital."
Let me reveal the last piece to make you fully understand the risk of those who make Social Trading only for the commissions: in some cases, (not always and not with everyone) the Signal Provider can operate and send his signals even from a demo account.
That’s right, from an account with virtual money, so without risking anything of his own capital. Of course, the Social Trading company will highlight this factor, and it will be definitely something to keep in mind when you will do your evaluations.
Moreover, even in the case of companies that do not allow Signal Providers to use demo accounts, but only real accounts with their own money in, the risks are not entirely eliminated. Thanks to leverage and the new usable quantities (once there was only the standard lot, now there are also mini, micro and nano lots, that are 1/10, 1/100 and 1/1000 of a lot) a Signal Provider can open an account with a few hundred dollars and still have a high level of margin to be able to use these risky techniques. If all goes well, the profits from commissions could be very high, while in the event of a failure, their loss would be only on the small open account.
I won’t deny that this kind of alleged Signal Providers still exist today, and that many novice investors still eventually fall into these traps.
Now, however, this is no longer your problem.
With what you’ve learned, and what you still have to learn with Investingoal, you’ll discover how to recognize and avoid these risks with no difficulty, going rather to find and appreciate those traders who work seriously and professionally, for the common benefit of Signal Providers and follower investors.
Our common mission
Let me add one more very important thing.
Now that you know how this mechanism works, and what is the risk for an inexperienced investor, it’s your duty to make sure that as many people as possible will know how to defend themselves. One of the most ambitious Investingoal’s goal is to be able to make aware of these risks anyone who wants to try, or is already using, Social Trading, and ensure that all the sharks chasing commissions will die of starvation.
Only then can we have a clean Social Trading, really founded on knowledge and professionalism.
There’s an easy way for you to be able to do this. Continue your journey with Investingoal, share our content with your social networks, and above all, join our community in order to make it grow.
This will ensure that more and more investors will come on Investingoal and will find out how to protect themselves. We, of course, we will be happy for obvious reasons, but I think you will be too, because you would have done the right thing.
Because of you, those who will arrive will be able to save themselves from the possible dangers. At the bottom, of the spirit of a community is just that.
Protecting ourselves together from the risks, and sharing together all the benefits.
We have seen the positive and negative characteristics of each Signal Provider’s category.
Now we just have to discover the two pillars, the two main components, those we will always analyze first whenever we will approach a Signal Provider.
We’re talking about the Equity Line et le Drawdown.
These two figures will be the first great divide between “interesting” and “to be discarded". Your question at this point could be: “But, if they are the 2 main elements, the ones to start with, why do you speak about them only after the other parameters?"
Here is why. As we have found through various feedback, many people make the mistake of relying solely on a rough analysis of these two elements, avoiding to go deeper in the analysis of what we saw in Chapter 6, or, even worse, not being even aware of it.
Equity Line and Drawdown are the two basic elements but, for the avoidance of doubt, they are not enough to make a good choice. These are the two essential elements to start, but, after the analysis, you absolutely have to analyze all the others. Otherwise, the possibilities of following a risky Signal Provider grow a lot.
In chapter 6, 7 and 8 we’ve clarified what are the elements which you must consider every once in a Signal Provider, now we’re going to see the two that will help you decide which among the thousands of traders to analyze further.
The Equity Line is a graphical representation of the Signal Provider’s account balance.
The chart that represents an Equity Line has, on the ordinate axis, the account balance, and, on the abscissa axis, the time, or the serial number of performed operations. The combination of the various points creates a line that represents the evolution of the balance, and it’s called precisely Equity Line.
We can make the first big division between:
- the Equity Line that show the trend for each trade
- the Equity lines that shows the daily performance, that is the final balance of what has been done during a trading day.
With the latter we might find times when the Equity Line is flat. This is because if the Signal Provider makes no operation during that time, the line will mark precisely the same constant value corresponding to the last balance. In the first case, instead, we can never find flat periods, because it doesn’t take into account the passage of time, but only the trade’s earnings or losses when it actually get closed.
Another division we might do is between:
- the Equity Line that shows the balance trend only for closed positions
- the Equity Line that also include the open positions movements.
For the Equity with only closed positions, in the case of daily progression, it will be clearly a balance formed by the sum of only the transactions closed during the day. These equities are the classic and the most famous ones, and they are very useful in understanding certain types of behavior of Signal Providers.
However, an untrained eye may sometimes misinterpret this kind of classical Equity Line. To explain better, if I close an operation, but I have other 10 open positions on the account, my balance situation could be very different than the one shown by an equity line with closed-positions only.
To give a practical example, let’s think about that who almost never closes a losing operations (the famous martingale). His classic Equity Line could be perfect and always climbing, since he closes his trades only when they are in profit or, if added together, they are at break even. In fact, the trader could have at the same time many other trades open at a loss, but the classical Equity Line would show only the “+10 pips” of the day, while it would now show the “-1000 pips of open positions.”
That’s why there are other types of Equity Line, which in addition to the balance of the closed positions only, they integrate within them also the real balance values, in view of all the open positions. There may be various types, such as Equity Line that includes only the open positions at a loss, or that include also those in profit.
The key thing when you look at an Equity Line is to know according to what criteria it has been designed, in order to have a clear view of the data you are looking at being able to make the right considerations.
The complementary element to the Equity Line, which extends the analysis opportunities, is the drawdown.
In simple terms, the drawdown represents the losses of a trading asset, or rather, the level of losses incurred before returning to profit.
Looking at a normal Equity Line, which has ascent moments and descent moments, the drawdown are all those descents that have occurred and that have been followed by new ascents, with new highs in the profit balance.
"How many losses the trader had to bear before being able to generate new maximum of profit on his account?"
This is the question to which the Drawdown responds accurately.
The drawdown can be expressed in two ways:
- we can consider the losses in absolute terms, such as money or pips
- we can consider it in terms of percentage.
The percentages help us with the analysis of the effective capacity of the Signal Provider’s trading strategy, while the absolute values, of money or pips, will help us mainly in the construction of our portfolio. Both factors, in any event, concur to support the decisions about money management, as we shall see in particular in the next lesson.
In our view the percentage Drawdown must always be calculated in two ways, or better said, taking two different references. Once you’ve identified a drawdown, you can calculate what is the percentage amount both using the total accumulated profits, both using the amount of profits achieved just before the Drawdown itself began. Both values are very important, and can describe this aspect of the trader’s performance from two different angles.
Percentages help us to observe the drawdown from another interesting point of view. If a Signal Provider loses 50% of his pips, in order to return at least to break even, he will not have to produce a new performance of just the 50%, but rather of the 100%. Yes because, if he loses 50%, he has halved his gains, therefore he has half the capital. To make sure that half will come back to being a whole, he will have to double it, in other terms, to do a performance of the 100%. We must therefore always be careful, because the higher the drawdown, the more difficult is to recover the profits.
As we have seen for the Equity Line, also the drawdown can be calculated and expressed in different ways, depending on what is considered, if only the closed positions, or if there are also the still-open positions.
Les classical Drawdown in based on the classical Equity Line losses, caused by the closed and accounted operations only, while the one that include the open position too calculates how much the balance actually dropped in terms of capital, against all open positions.
Both these ways can give indications but as you can image, the main interest must be given to the Drawdown that include the open positions, because in this way we can actually observe the risks that have been susteined. Each operation, before being closed, oscillates. To calculate the possible risks I need to know how deep the downwards oscillation was, and then to know how deep the downward oscillation of the whole account was, considering the sum of all the trades open at any given time or day.
Beyond all the ways in which it can be represented, the value that interests us the most is the Max Drawdown, ie the maximum capital reduction before returning to create a new profit high in the balance.
Other values that may be useful are also the Average Drawdown et le Drawdown frequency, that is how often they occur.
Equity Line, Drawdown and all the other elements of analysis we have seen so far, when combined intelligently they concur to help the follower investor in his decisions about how to handle his money allocated in his portfolio, namely, about his Money Management.
In the next lesson we’ll make the following question.
"Given all these premises and these characteristics of the Signal Provider I have chosen, how can I best use my money to get the biggest possible returns?"
Money management tips and best practice
Money Management is the management of the money used in all of our assets, and its primary goal is to control risk.
Managing your money wisely is the real dividing line between success and failure, and that is why many trader or followers investor have difficulties at first, because they underestimate the importance of money management in their investment strategy.
Even the most profitable and successful strategy in history could cause you serious problems if you don’t have a clear idea of how to manage risk, and therefore your capital.
Let me make an extreme example to let you understand properly. Let’s suppose you’ve found a strategy that wins 99 times out of 100, a real prodigy, almost a miracle. Enthusiastic, you take your 10,000 usd account and you bet everything of this strategy. Unfortunately, the first transaction made was that single losing operation out of 100. After that one, the system started with the other 99 winning trades in a row. Too bad for you though, because by betting everything, on that first trade you have burned your balance and you have set yourself out of the game just before you were about to get rich.
Now you have clear the concept of what it means Money Management for risk management.
Any investment, any strategy, any Signal Provider carries a certain level of risk. It’s inevitable and it’s part of the game. The ability of the investor is to assign the right amount of capital to each piece of the strategy, so that the whole structure can continue to operate efficiently and with as little risk as possible.
In Social Trading, since it’s a real form of investment, we must decide which and how many Signal Provider to include in the portfolio, how much capital to assign each, which Lot Size to assign to each Signal Provider according to the assigned capital’s share, and finally, the control levels for making future management decisions.
All of these actions concur to shape our Money Management.
Did you know that thanks to Social Trading you don't have to be a Trader to earn like one? OPEN AN ETORO ACCOUNT AND TRY!
62% of retail CFD accounts lose money
How much capital to assign to a Signal Provider
Any Signal Provider brings with him his strategy and his performance, with its relative parameters, peculiarities, performance levels, but especially risks. From all these parameters derive the Money Management reasoning, designed to indicate what is the ideal piece of capital to be allocated to the trader, so that he will produce his best performance, putting the least possible at risk the portfolio stability.
How much to assign also depends on your initial investment objectives. It’s clear that, if you have a conservative goal, you will give more space to very quiet Signal Providers, and you will diversify with a smaller slice assigned to some more aggressive Signal Providers. Conversely, in case you want to instead aim at a great return on the investment.
Speaking in terms of percentages, a good money management strategy could be to allocate 50-60% of the portfolio in Signal Providers suited to your goal (aggressive or conservative), 20-30% in opposites Signal Providers (or with different characteristics) in order to diversify, and leave the remaining part of your balance as protection capital.
We believe a lot in the protection capital. Social Trading is an investment that allows incredible returns on your capital, but it also brings risks that should not be underestimated, especially when you consider the fact that the management is entirely in your hands, and you may not have the slightest experience in this field, but only theoretical concepts.
To keep a slice of capital out of the game means to protect yourself further, in the event of serious errors or unexpected events. Should you encounter some obstacles along the way, that slice of capital will always be ready to give you back a bit of oxygen. You will then see in more detail what we mean.
Deciding these percentages is more an art than a mathematical process, and the experience is definitely what will help you the most in finding the best investment portfolio calibration and the right money management strategy.
However, there are also mathematical formulas that can help you figuring out how much percentage of capital a Signal Provider can handle according to his performance.
Obviously, the percentage values will impact on the number of Signal Providers you can use. If you have decided to dedicate the 60% to aggressive Signal Providers, then you cannot use 5 traders that, according to certain mathematical formulas, should occupy a slice on your account equal to the 20% each.
How many Signal Provide to use
So, now you’ve decided the percentage of capital to use for your strategy.
The next step for a good money management is deciding how many Signal Provider to use. In addition to what has been said in the preceding paragraph, we must also think about the account’s balance capacity, because if you have a small account and you follow too many Signal Provider, you may not have enough margin coverage to replicate all the transactions, as explained in Forex . This is Money Management too.
In general, it’s better not to overdo with the number of Signal Providers, for the sake of simplicity in the management, and for what Warren Buffet said: Wide diversification is only required when investors do not understand what they are doing."
you don’t need tens of Signal Provider to give an impression at the portfolio according to your goal. Study many Signal Providers, but in the end choose your favorite, focus on those, and learn to know them as much as possible.
Which lot size to assign to a Signal Provider
This is one of the most important topics about Money Management in Social Trading.
“How many lots, or mini lots or micro lots should be assigned to each Signal Provider?”
The answer is not easy, but math and logic can offer a great help.
- The lot size must reflect primarily the percentage of capital we have decided to assign to that trader.
- It must reflect the level of risk of the trader himself.
Again, to combine these elements perfectly is a practice you can acquire with time and experience, but to create for you an excellent starting point for a good money management you can start using some calculations.
The most important value in this case is the Max Drawdown, and it’s easy to guess why.
If past performances are not a guarantee of future performances, it’s still true that they are a possible preview of what you can expect. In any case, they are what you should rely on to make your best decisions. With this in mind, the Max Drawdown value is a very good indicator of the worst you might expect from a Signal Provider.
The worst Signal Provider’s experience is what , for translation, you might experience too, if the trader will replicate such a moment.
This means that the Signal Provider’s Maximum Drawdown is the fundamental value to understand how much risk we can tolerate, how much money we are willing to risks, and therefore what lot size that Signal Provider can handle.
Money management monitoring levels
Now that you’ve clear all the parameters for setting the Signal Provider’s operation within your portfolio, let’s see what is left to do about money management.
It remains to establish what the levels of control for your capital’s evolution should be.
Let’s say that a Signal Provider encounters a drawdown period that has never occurred so far, thus creating a new Max Drawdown level. At that point you should go to review the trader’s statistics, and maybe also update all his settings.
You also need to be clear about the level of expectation on the maximum general and cumulative losses of the account. Imagine if all the Signal Provider should produce at the same time their worst historical performance, and calculates how much your account may be affected by that. If you were to reach that level, it means that it’s time to reconsider the whole portfolio structure, and particularly the choices about the Signal Providers.
These can be two negative scenarios. Now it comes the good one.
There will come a time when your earnings will allow your portfolio to make a step further. Your capital will be raised enough to support an increase of the Lot Size assigned to that Signal Provider, therefore to begin to deal with larger capital for the progressive growth of your account.
Also being clear about this level is part of a good money management strategy.
Before proceeding to the conclusion of this course on Social Tradidng and beginning the next one, we need to spend some words about factors like time, resources y expectations.
Many investors wonder what the timings are when it comes to investing their money with Social Trading.
On one hand, an investor could easily take his money, give it to someone else to handle it, pay him, and then wait, with all the risks and low returns that follow. This method, which is the classic one, would require a minimum investment in terms of time.
Or, on the other hand, you can choose to invest a bit of your time for a while, learning how to invest on your own, and how you do it via Social Trading.
This method will definitely take more time, but on the other side you’ll never lose the total control over your money, and you’ll have access to potential returnes beyond compare.
How long does it take to learn Social Trading?
A how much time it takes to be able to start operating successfully depends on you.
For sure there is a fact. By arriving on Investingoal and following our courses you are drastically reducing the time needed for your education. To start with no educational material exposes you to the dangers of highly risky choices, dictated simply by your lack of knowledge of the topics.
By starting alone, you would need to learn by doing experiences. From one point of view, it’s a great thing, but unfortunately here there’s your money involved, and risking them to make experience would make no sense. Starting with Investingoal instead allows you to have, from the very beginning, all the basic knowledge you need to start safely, excluding the risk of threatening immediately your capital with very risky choices, dictated by the total lack of experience.
In addition, all your following experiences will have a different and greater value, because, thanks to your solid base knowledge, you’ll be able to contextualize them in a much more organized and useful manner for your field education.
Making mistakes is normal, it happens to everyone, even after years of experience. The important thing is that an error never has to put at risk your account stability and your resources, and that from that mistake you can really learn something.
The knowledge you’ll get with Investingoal has been precisely designed for this.
Did you know that thanks to Social Trading you don't have to be a Trader to earn like one? OPEN AN NAGA ACCOUNT AND TRY!
(79.67% of retail CFD accounts lose money)
How long to succeed?
In reference to the time factor, there’s another important issue to deal with. And it’s about how long it takes to be able to make money.
Here too it can be personal and it depends largely on the type of strategy you have decided to pursue. If you have a Long Term Strategy, you cannot expect to see results after only one month. But even if you have designed a Short Term strategy, thinking you can get great results after just two weeks will put you in a dangerous situation.
As said before, we are talking about investment, not about betting or gambling. If you want to double your capital on a night, I suggest you to try the casino roulette. For sure you will have more chances, and it will take much less time, in the sense that, within a single evening, you will know right away if you have doubled your capital, or if, more likely, you will have lost it miserably. This can also be a method for saving time, perhaps not very intelligent.
All good things take time and care, the art of investing especially.
Both when you study or when you set up your portfolio, take your time, do not rush. Think hard about all the possible variants, about all the possible problems, do a brainstorm of everything that can be connected to your strategy, pros and cons, best and worst moments, timing, and above all the rules that your Signal Provider shall comply with, penalty a Lot Size reduction or the total disconnection.
Investing means to be patient
Once you’ve done all this, the hardest part of an investor’s psychology is called into question: the ability to be patient and to wait.
It takes time for your diversified investment portfolio to work. If, on one hand, to see your capital status whenever you want is a great thing, on the other hand it may also create a possible stress.
Imagine you set a long-term strategy. As mentioned above, it may take months to see the results. If you cannot stay calm and you frantically checks your account several times a day, I assure you that you will suffer some kind of stress and dissatisfaction.
If the conditions and motivations that have led you to choose certain Signal Provider, and to assign certain values, are still valid after weeks or months of no profit, then it might mean that your mind is starting to suffer the passage of time.
When you begin to feel this discomfort you must be very careful with the actions you’ll decide to take, because if you decide to change strategy at once, you will risk to lose the moment when you would have finally begun to realize the long-awaited profits.
I can assure you, there’s no worse anger and frustration than the regret of not being able to wait a little bit longer, and having lost the chance to realize what was about to come true.
On the other hand, if your strategy conditions should disappear according to the rules that you have placed at the beginning, then you should act without hesitation. This is the flip side, stand still and don’t take decisions out of fear of change is what in psychology is called “maintaining the status quo"
This calls for clear rules established at the beginning, for not having doubts about what you should do. The ability of a good follower investor is precisely this, to set rules not too hard and not too lascivious, so that he can move wisely into the possible scenarios, and especially so that he can respect them.
The first year
In principle, however, if the follower investor have properly studied all the arguments, have taken all the time to proceed with all transactions in these courses, and have checked the accuracy of all its settings, assuming his Signal Providers will do their duty without making mistakes along the way, then the minimum time to leave the portfolio working before making considerations will be of at least 6 months, but much better a year.
These are the minimum timescales for your thoughts and feedback on performance to be reliable.
Always taking a Long Term strategy as example, it would make no sense to complain about the performance after only 5 months, knowing how these strategies work. Evaluations of this kind are not so much logical, for the simple fact that it has not been left enough time to the portfolio to show its real potential, or perhaps also to reveal its real problems or deficiencies.
For both, the right time is needed. Otherwise you are not acting in a sensible way, but only by making decisions based on emotionalism, which is very destructive in the investing world.
To reiterate, this doesn’t mean that if a Signal Provider betrays his own strategy, or you see that losses are endangering your account, you still have to wait 6 months before taking any action. The rules you have set at the beginning answer just to that: to understand when and why you need to take action out of the ordinary.
The initial capital
We must now consider arguments of a monetary nature.
Another question that many people ask is “with how much money should I start?”. By now you should know, these are all relative topics which may vary from person to person. However, we can make some general observations.
With Social Trading, thanks to the financial leverage, you can start with just a few hundred dollars. With Zulutrade precisely 250 usd, with eToro 200 usd. On one hand this aspect is great because it allows the access to this investment tool really to everyone. On the other hand, however, as usual, it can be cause of risk.
Starting with such a small amounts of money can cause frustration. The percentage of returns that can be obtained are the same as those obtainable with large capital, but it’s obvious that the 50% of $ 300 is very different from the 50% to $ 30,000.
To obtain a 50% a year, but even more as we will see, is an obtainable result with Social Trading, but what this 50% represents in monetary terms depends only on your initial investment. Having a too small capital can cause a certain level of frustration, which then can bring you to take bad decisions, the worst of which to increase the exposure and the lot size, for trying to increase profits.
As you know, this increases also and above all the losses, and therefore the entire risk related to your portfolio. In addition, with a small capital you may not have enough coverage, in terms of margin, in order to follow more Signal Providers with safety parameters.
To have a good starting capital allows you to obtain significant results, which will enable you to live in peace the evolution of your investment, and above all, not to take any unnecessary risk caused by the impatience of getting immediately substantial profits.
As a general rule, you should always invest a sum you won’t have trouble if lost, and that would not ever jeopardize your financial security and financial stability. But at the same time, you should make sure that this sum is as large as possible.
Much better to save money the necessary period while studying and you practicing on paper, rather than starting with the little you have, running all the above risks. Or, you can always start with small amounts, but with plans to pour new money whenever possible, as explained in this lesson of the Investing For Dummies course.
How much can you earn?
Finally, we arrived at the last topic, for sure one of major interest.
“How much can I earn with Social Trading?”.
Among those we set ourselves so far, this is certainly the most personal and relevant question of them all.
Obviously, we want to try to think about how much you can earn “at maximum” with Social Trading, what are the major percentage of return obtainable. This is not an easy question to answer. The reason is simple.
The decisions on what lot size to use are taken by you, so how much to earn it’s your choice, but as you know, when you choose, you do it also on the related risks. You can even design to achieve the 500% return in a year, you can do it, the tools are at your disposal. But, either you have found truly exceptional Signal Providers, ultra-profitable, and above all ultra-safe strategies (in that case, please tell us who are they 🙂 ), or if, most likely, you have not, you’re risking too much.
How much you can earn should always depend on how much you are risking, and in order to minimize the risks and maximize your profits you have to be especially good at finding the suitable Signal Provider and professionally building your strategy.
We have already shown you that the Retail Forex or CFDs Traders can get great returns on their capital, then it means you can do it too. The important thing is to know how to handle this huge potential and not get burned.
Your expectations with Social Trading can be very high, but please try not to overdo. I won’t give you limits on what return you can get, because it would not make sense. You can aim at anything you want.
However, I want to be sure you are aware that every goal always hides potential risks for your capital preservation, risks that you must be able to identify, analyze and control. If this has been done, and these risks are acceptable, or they are not, but you still decide to run them knowing what the consequences may be, then go right ahead.
I wish you always, and in any case, good luck and good investment.
This being said, we always recommend to not overdo. As you will see very soon, with Social Trading you can get good returns on capital, not accessible by other classic investment method, still maintaining the risks moderated.
Do you want to increase the money you earn? Pours more capital and thus increases the base on which the portfolio is working, keeping the same rate of risk exposure.
This is true investing.
Here we are finally to the conclusion of this course on investing with Social Trading.
It’s been a long journey, but this way we have been able to really touch the key topics that are critical for the success in this discipline.
If you have followed all the path we have suggested in this “Learn” section, now you have all the information to really know what the art of investing is, how it’s applied in Social Trading, and the market in which you will operate mostly, that is Forex, the foreign exchange market.
Now, to move to the last free course of the Learn section, your next step is to open your Social Trading account with the two most famous and valuable companies in the world: Zulutrade and eToro.
You can open a demo account with both, to begin working with the exact same features you can find in a real account. We recommend that you open your demo account through our affiliate links, with NO additional cost:
It’s time to invest with Social Trading
So, here we are.
Now it’s time for you to really begin to invest with the Social Trading.
With your demo account in hand, we recommend you to explore all the available features and practice in general as much as possible. Do not make the mistake of starting to take decisions lightly, or even worse randomly, just because “the account is demo…”
Get used immediately to make smart and reasoned decisions, even though you may not have yet all the advanced knowledge required to operate as a true professional.
For now you have to get familiar with Social Trading, with the tool you will use. Start to observe the Signal Providers and the investors, try to interpret their performances through what you have learned so far.
I know you won’t resist the temptation to start following some traders, and I would say it’s the case that you do it. A demo account is also made for this. Just don’t be surprised if by chance strange things happen or your start losing without even realizing it. It’s ok, it can happen if you don’t have the right advanced knowledge.
But this is definitely not a problem.
You’ll have the chance to understand how to analyze practically a trader, which are specifically his strengths and weaknesses and how to identify them, how to really calculate possible risks, and above all, how to build a well-balanced people-based portfolio and how to manage it over time.
Your journey in this new investment opportunity is about to begin. Let’s start by opening an account with the two leading companies in this field: ZuluTrade and eToro.
Then, you have two free courses to start demo-investing with both these companies:
This is a journey that, if done properly, can give you a lot of personal, emotional, but of course, for what matters us the most, especially economic satisfactions.
|(79.67% of retail CFD accounts lose money)|