Social trading platforms allow you to communicate with other investors in a Facebook-style manner. The main concept is that you get to share and discuss potential investment opportunities with traders of the same platform. In many cases, the best social trading platforms allow you to ‘copy’ successful traders, paving the way for a passive investment experience.
In this guide, we review the best social trading platforms to consider in 2021 and how to get started with an account today!
In This Guide
Looking to start investing with the best social trading platform of 2021 right now? If so, check out the list below to see which providers made the cut. You can scroll down to read for a full review of each social trading platform.
Although social and copy trading is getting more and more popular with the average Joe investor, the number of top-rated platforms active in this space is still relatively small.
After all, not only do you need to focus on the platform’s social trading features – but other key metrics such as regulation, tradable markets, fees, payments, and more.
Taking all of this into account, below you will find a selection of the very best social trading platforms to consider in 2021. Whether you’re looking for a social forex trading platform, stock trading platform, or Bitcoin trading platform, we’ve got you covered.
There really is no competition in the social trading platform space when you look at the numbers. That is to say, eToro is without a doubt the market leader in this sector – with more than 17 million clients now using the social trading platform to invest.
First and foremost, eToro, as one of the best forex brokers in the industry, is heavily regulated. It holds licenses from the FCA, ASIC, and CySEC – plus it’s registered with FINRA. This ensures that you are able to engage with its social trading tools in a safe and secure manner. eToro supports a wide variety of asset classes – which includes more than 2,400 stocks and 250 ETFs from over 17 international marketplaces.
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
The platform also supports cryptocurrencies, commodities, forex, and more. Each and every market supported by eToro has a “social element” to it. For example, if you click on Apple stocks, you’ll see a list of relevant threads that have been posted by other eToro traders. Each thread allows you to ‘Like’ and ‘Comment’, much like you would on social media! Additionally, you can elect to ‘Follow’ eToro traders that you like the look of.
With that said, the most attractive and perhaps innovative social feature offered by eToro is that of its Copy Trading tool. This takes things to the very next level, as you can copy an eToro trader like-for-like. There are thousands of verified eToro users that have joined the Copy Trading program, so you find an investor that meets your financial goals and appetite for risk. There’s heaps of data to draw from too – such as past performance, historical trades, risk profile, average trade duration, and preferred assets.
Past performance is not an indication of future results
Once you copy a trader on eToro – which requires a minimum investment of $200, everything that the individual does moving forward will be reflected in your own trading account. For example, if the trader risks 15% of their portfolio buying IBM stocks and you invested $1,000 into the trader, $150 worth of IBM stocks will be added to your portfolio! When it comes to fees, things get even better – as eToro is a 100% commission-free social trading platform.
Not only does this mean that you’ll avoid commission when you buy, sell, and trade assets – but also when you elect to use the Copy Trading feature to copy trades. In terms of getting started, eToro supports an assortment of payment methods – including debit/credit cards, e-wallets, and bank transfers. Finally, there are no fees to deposit if you’re an American using a USD payment method. Otherwise, there is a small 0.5% FX charge.
NAGA is a social trading platform that covers 750+ assets. This includes CFDs, stocks, forex, and cryptocurrencies. In a similar nature to eToro, this top-rated social trading platform allows you to discuss and share ideas with your fellow traders.
In terms of finding a trader on NAGA, you can view a full host of useful information to help you decide whether or not they are worth copying. For example, you can view each and every trade that the individual has made since joining NAGA, and what this amounts to in terms of profitability and loss.
You can also dig a little deeper to see how much risk the trader likes to take and whether they prefer short-term or long-term trading strategies. Once you have selected a trader that you like the look of, NAGA offers two options in the terms of executing your position.
You can either use the proprietary NAGA Web Platform, which is simple and thus perfect for newbies. Or, you can also connect NAGA to third-party trading platforms MT4 and MT5, which you can use on your iOS and Android devices. This option is best suited for more experienced online traders. Much like eToro, NAGA also offers a top-rated mobile social trading app, so you're never more than a click away from checking in on your copied traders.
When we explored the fee department, NAGA offers commission-free trading on forex, crypto, indices, commodities, and futures. However, there is a variable commission charged on stock CFDs and ETFs. This averages 0.20% per slide on most markets. There are no fees to deposit funds, which is another bonus.
However, unlike eToro, NAGA charges a commission when you utilize the copy trading tool. If you make less than €5 profit from a trade, this amounts to a fixed copy fee of €0.50. If the trade yields a profit of more than €5, then this changes to a variable commission of 5% - which is huge.
For example, if you stake €1,000 and trade makes you €200 - you'd pay a 5% commission of €10. There is, of course, no copy trading commission applicable on losing positions. Withdrawals are charged at €10 per transaction and the minimum cashout amount is €50. Finally, NAGA is authorized and regulated by CySEC
74.39% of retail investors lose money trading CFDs at this site
FXTM is primarily an online trading platform that specializes in forex and CFDs. Regarding the latter, this includes stocks, indices, commodities, and more. If, however, you're looking for a top-rated platform that also offers social trading features, FXTM has you covered.
Much like the other social platforms we have included in this social trading review thus far, FXTM allows you to select a trader based on your financial goals, according to your projected investment decisions. For example, if you're looking to trade currencies in a completely passive nature, FXTM allows you to filter your search by the asset class - in this case, that's forex.
Then, you can sort the list of suitable forex market traders by specific metrics - such as monthly average returns. When it comes to the platform itself, FXTM supports MT4 as well as its own web-trader. Either way, FXTM offers some of the best trading fees n the industry. For example, if you opt for the Cent Account, you can trade commission-free.
There are also accounts suited for large-scale traders that come with zero spreads and a low flat commission. Leverage of up to 1:1000 is also offered by FXTM, albeit, your personal limits will be determined by whether or you are a retail or professional trader. Finally, FXTM is heavily regulated in multiple jurisdictions, which includes a license with the FCA and CySEC.
There is no guarantee you will make money with this provider
Although eToro is the industry leader in this space by some distance, there might come a time when you come across a social trading platform that we haven't discussed today.
If this is the case, you'll want to ensure that the platform is right for your trading goals before you open an account.
The most important factors that you need to explore when searching for the best social trading platform are discussed in more detail below.
First and foremost, you need to check how 'social' your chosen platform is. For example, while some online brokers simply offer a copy or mirror trading service, others go one step further by offering a complete social experience. For example, eToro allows you to see what your fellow traders are speculating on once you click on an asset.
For example, if you're thinking about trading Bitcoin, you'll find heaps of threads and discussions on the respective trading page. You can join in the conversation by replying to specific posts, 'Like' your preferred viewpoints, and even follow an eToro trader that you like the look of.
It is also important to assess whether your chosen social trading provider offers a proprietary platform. By this, we mean that you can access social and copy trading features directly from the provider's website, so there's no need to download or install any software.
We usually find that this is something offered by the best social trading platforms. On the other hand, some platforms will advertise social trading tools, but in reality, you’re simply using a broker that supports MetaTrader 4 (MT4). For those unaware, MT4 is a third-party trading platform that is particularly popular with seasoned pros that use trading signal providers.
The platform essentially sits between you and your chosen broker. In addition to advanced trading tools, MT4 also offers social trading features. At the forefront of this is the ability to copy other traders that are using the MT4 platform.
The best social trading platforms in the online space allow you to ‘copy’ other members into the trading community. This is something that more and more brokers are starting to offer, as they understand that some individuals want to invest passively. There are a wide variety of factors that will determine whether or not the copy trading feature offered is worth considering.
We have come across social trading platforms that allow you to copy other traders using the site. But, in many cases, you only have a handful of traders to choose from. This is problematic as there is little chance that you will find a trader that directly meets your financial goals and appetite to risk.
At the other end of the spectrum, eToro is home to over 700,000 verified copy traders (out of 17 million social investors). This is crucial, as you can really do some deep-digging on the trader before you decide to invest. For example, you can view the historical trading performance of the individual - in terms of average monthly returns.
You can also view the average trader duration, which illustrates whether they are a day trader, swing trader, or a long-term buy and hold investor. Other important metrics that can be explored at eToro include preferred asset class, risk rating, and a full biography of the individual's experience and trading goals.
If you decide to use the copy trading feature at your chosen platform, it's important to assess what the minimum investment is. If the amount is too high, this can make it difficult to diversify. At eToro, the social trading platform requires a minimum investment of just $200 per trader. If, for example, you deposited $2,000 - this would allow you to diversify across 10 different investors.
Some social trading platforms allow you to copy a trader like-for-like but offer no control over your portfolio. This means that you are unable to add or remove assets yourself.
eToro not only allows you to copy your chosen trader but easily adds individual assets to your portfolio as and when you see fit. For example, you might be copying a forex day trader but at the same time - decide to invest in some blue chips.
All social trading platforms are in the business of making money. As such, you need to explore what fees you will be liable for before you open an account.
The main fees that you need to explore are as follows:
Ultimately, if your chosen copy trader incorporates fees when buying and selling assets on your behalf, you should expect to pay a proportionate amount.
It is important to remember that social trading platforms are still brokerage firms. That is to say, they give you access to the financial markets, and thus - reputation and trust are crucial. This is why the best social trading platforms are heavily regulated by reputable financial bodies.
For example, eToro is licensed by the FCA, ASIC, and CySEC. This means that your funds are stored in segregated bank accounts and all users must be verified. This also ensures that the social and copy trading features offered by eToro are monitored for fairness and transparency.
We should also note that there are two types of auto trading features that you might come across. This guide has so far discussed manual copy trading, meaning that you will be investing in a trader that performs their own research and personally places buy and sell orders.
With that said, some social trading platforms also support algorithmic trading. This means that you will be installing a software file that contained pre-programmed trading conditions. The 'robot' will then buy and sell assets in an autonomous manner - with trading decisions backed by AI and machine learning.
In order to benefit from this, your chosen social trading platform must be compatible with the likes of MT4, MT5, ZuluTrade, or cTrader broker platforms. Although AI trading does come with its benefits, it's a lot more risk-averse to stick with traditional copy trading services.
This is because robots are tasked only with following the underlying code of the software file based on an algorithm – meaning they are unable to assess real-time financial news feeds. A prime example of this is a stock that releases worse-than-expected quarterly results, such as a drop in revenue or operating margin. A human copy trader would be fully aware of this and thus – this is the best way to go.
When searching for social traders to copy, you're likely going to base your decision on their historical trading results. Although this makes sense, it's important to remember that past performance is never a sure-fire indicator of future results. As such, it's best to test the trader out before risking any money.
Without a doubt, the best way of doing this is to copy the trader via a demo account. The best social trading platforms offer demo accounts that mirror real-world market conditions. eToro, for example, offers demo accounts with a pre-loaded balance of $100,000 to all registered members.
Finally, if you’re looking to utilize social trading tools to make money, you will need to make a deposit before you can start trading. The best social trading platforms allow you to find your account with a debit or credit card, as this is usually processed instantly.
eToro and NAGA also offer e-wallets. Some social trading platforms only support bank wire deposits, so expect to wait at least a couple of working days before the funds are credited.
If you've read our guide up to this point, you should now have a firm grasp of what to look for in a social trading platform. To conclude, we are now going to show you how to get started.
The walkthrough below is based on industry-leading social trading provider eToro - which offers a regulated and commission-free way of accessing this market.
eToro is regulated by three financial bodies, so you'll need to go through an account opening process before you can get started. To get the ball rolling, head over to the eToro homepage and click on the 'Join Now' button.
Here, you'll be asked to enter some personal information and contact details. Additionally, you'll be asked to upload a copy of your government-issued ID and proof of address (utility bill or bank account statement).
In most cases, eToro can validate your document instantly - meaning the end-to-end account opening process should take less than 10 minutes.
You will now be asked to make a minimum deposit of $200. This amount mirrors the minimum copy trading investment, so do bear this in mind. For example, if you want to copy three different traders, you'll need to deposit at least $600.
You can choose from the following payment methods on eToro:
As noted above, unless you opt for a bank wire, all other deposit methods are processed instantly.
Now that you have made a deposit, it's time to browse through the many verified copy traders available on eToro. To do this, you'll first need to click on the 'Copy People' button. Baring in mind there are 700,000+ traders to choose from, it's best to use some of the filters at the top of the screen.
Once you are happy with your filters, click on the 'Go' button.
After that, you are best advised to select additional filters so that you can find a social trader that meets your financial goals.
There are many other filters available, so spend some time exploring the platform to find a trader that meets your needs.
On the respective profile page of your chosen eToro trader, you'll need to click on the 'Copy' button to proceed with an social trading investment.
Then, an order box will populate like the image below. First, you need to select the investment amount - which needs to be at least $200. By default, you will only be copying ongoing trades placed by the individual.
But, if you want to get the full social trading experience, you might want to tick the 'Copy Open Trades' box. This means that you will also be copying the 'current' portfolio of the trader.
Don't forget, you can add and remove assets to and from your social trading portfolio on eToro, so you always maintain full control over your investment funds.
Finally, confirm the order to start copying your preferred social trader!
Interest in social trading platforms from the casual investor is growing at a rapid pace. Crucially, the main attraction is that you can now actively trade the financial markets without needing to lift a finger. Instead, it's just a case of selecting a trader that you like the look of, choosing how much you wish to invest, and that's it - so you can start enjoying a passive investment experience.
With that said, you need to spend some time researching a social trading platform that meets your needs. We found that eToro stands out from the crowd for several reasons. The platform - which is now home to over 17 million clients and 700,000+ verified copy traders - is heavily regulated, offers thousands of markets, and doesn't charge a cent in trading commission!
eToro is often regarded as the leading social trading platform of choice. With more than 17 million clients, investors are attracted by the platform's simple interface, commission-free offering, and support for thousands of tradable markets.
Yes - in a similar nature to robo advisors, social trading allows you to invest in the financial markets in a 100% passive nature. This is great for those with little to no experience of trading or simply because you don't have the time to perform in-depth research.
Most social trading platforms are online brokerage firms. As such, you'll find that they are usually regulated by a reputable financial body. In the case of eToro, this social trading platform is regulated by the FCA, ASIC, and CySEC.
One of the most successful copy traders on eToro is Jay Edward Smith. The UK-based trader made gains of 52% and 103% in 2019 and 2020 respectively. In the first 5 weeks of 2021, the trader is up 16%. In turn, Jay Edwards Smith now has an AUM of over $5 million.
Although the two terms are used interchangeable, there is a slight difference in what they refer to. Social trading refers to the 'social' side of investing, meaning you can discuss, share, and 'Like' trading ideas in a public manner. Copy trading, on the other hand, refers to the process of 'copying' a trader like-for-like. That is to say, if your chosen trader risks 10% of their portfolio on Facebook shares, you'll do the same.
This will vary depending on your chosen social trading platform. eToro charges no additional fees to use its Copy Trading feature. NAGA charges 5% on all trades that make more than €5 in profit.
Most social trading platforms have a minimum deposit in place when it comes to copying a trader. At eToro, this stands at just $200 per trader.
Kane Pepi is a British researcher and writer that specializes in finance, financial crime, and blockchain technology. Now based in Malta, Kane writes for a number of platforms in the online domain. In particular, Kane is skilled at explaining complex financial subjects in a user-friendly manner. Kane has also written for websites such as MoneyCheck, InsideBitcoins, Blockonomi, Learnbonds, Buysharesand the Malta Association of Compliance Officers.
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