Social trading is a hot new trend among binary options brokers and has raised an important question; is social trading binary options a scam? It would be easy to say yes and I couldn’t blame you, there is a high propensity for scams and fraud in the irregularly regulated binary options industry, but that does not mean all social trading is a scam. What most brokers are actually offering these days is not social trading at all, its copy trading, and that is where the biggest risk of scams can be found.
The Difference Between Social Trading And Copy Trading
Believe it or not there is a difference and the distinctions are not ones the brokers like to highlight. The simplest form are the “trader sentiment” indicators telling you which way the crowd is trading, the most advanced are true copy trading platforms. This is a feature that allows you to search through a ranking of traders, find the one(s) with the best success rates, “follow” them and have their trades made in your account. There is usually very little information about the individual traders, no way to connect with them other than to copy and limited control over the account.
Social trading includes copy trading but it is much more. To start with, the best networks are built on a forum or other type of social platform. These allow for in depth profiles and the ability for direct contact between traders. Direct contact means discussions of analysis, updates on news, opinions of top traders, education and best of all, free signals. The end result that is new traders have access to free tips from successful traders but in a way in which they ae learning, not just copying.
- Give a man a trade, he may profit today. Teach a man to trade, he profits for a lifetime.
How Copy Trading Works
Copy trading works by listing the top traders who are using a given platform in a leader board. The leader board is the central pillar of the platform and can often be filtered by asset and/or trading style. Would-be copiers search through the leader board looking for traders they want to follow and when they find one those trades are then made in their account. This allows for easy hands-free trading and profits if you do it right… and avoid getting scammed. The best way to avoid a scam is to use only trusted brokers and platforms.
- AnyOption – CopyOP Binary Options Copy Trading
- iFollow – SpotOption / Zulutrade Binary Options Copy Trading
- The BOAT – Binary Options Social Trading Dash Board
- Trade4Me – Binary Options Social Trading Dash Board
Is Social Trading A Scam?
I think not. Social trading is the opposite of scams. It is the free passage of knowledge, trading education and tips from experienced traders to newbie traders. There are of course opportunities to get scammed when you go out looking for a social trading platform but that is why Social Trading Binary Options with Michael Hodges is here. Copy trading on the other hand could be a scam but it just depends on what platform you are using. There are trustworthy brokers on the market but there are just as many shady ones using the allure of easy profits as a hook to draw in unsuspecting traders. You have to be careful that you are following real traders and not just some BS the broker wants you to believe.
- Choose a reputable platform and broker
- Don’t just follow the crowd
- Manage your copy trading account
I have compiled numerous tips and tricks to help make copy trading binary options fun, educational and most of all profitable. In order to get them all be sure to bookmark us and check back weekly for the latest updates on brokers and platforms.