Social Trading Software is developed for social trading service providers like Forex Brokers, Individual Professional/Master Traders, and online forums or websites. They can offer their social trading accounts with the help of this software or tool.
This article is specially written for social trading service providers like Forex Brokers, Individual Professional/Master Traders, and online forums or websites.
If you are either of these 3 or maybe someone else who intends to offer Social Trading Service, this article will give detailed knowledge of;
- How Social Trading works?
- Benefits of Social Trading Services
- Which Social Trading Software, tool or plugin you would require?
- Social Trading Software Cost, etc.
This article is not intended for retail traders or investors who are looking for a social trading platform or broker. If you are one, you may stop reading further and may still read for your own knowledge.
3 types of Social Trading Service Providers
Before we deep dive into the social trading software and how this whole system work, let’s first understand the types of Social Trading Service Providers for who this article is intended.
1. Forex Brokers
Forex Brokers are businesses and large institutions that provide forex trading services to retail and institutional traders. They offer trading instruments with live price quotes and liquidity.
Forex Brokers make money by charging brokerages, swap, spread, etc.
Social Trading Service is a value-added service that they offer to their professional & retails traders to connect with each other.
Social Trading Service Benefits for FOREX Brokers
- Social Trading is a Value Added Service
- New traders acquisition
- Engaged traders community
- Additional Source of Revenue by separate trading accounts, fee, commission, etc.
2. Professional aka Master Traders
The forex market has broadly 2 types of traders;
- Consistently profit-making traders
They are those who have cracked the code of making profits trading into forex instruments. They have a couple of trading strategies that help them in making consistent profits over a long period of time.
- Consistently loss making traders
They are usually retail traders that have been making losses. They may remain profitable for a couple of weeks and even months and then blow it all in few sessions. They keep jumping from one trading system to another.
Social Trading Service Benefits for Professional Traders
Social Trading helps loss-making traders to connect with a profit-making professional trader and get their trading strategies, the real-time trades based on these strategies and copy the trades as they want.
And professional or master traders get
- Earnings by charging Fee & commission on profits which can complement their volatile forex trading earnings.
- Better Personal Branding
- Building a loyal follower and customer base
- Opportunity to start another business of forex training, coaching, mentorship etc.
3. Online Forex Forums and Websites
There are thousands of Forex Forums and Websites that share forex news, trading ideas, education, reviews, etc. Many of them have a large active community of forex brokers, professional and retail traders.
Social Trading Service Benefits for Online Forex Forums and Websites
They can capitalize on their flourishing community by offering Social Trading services on their platform.
- New members acquisition
- Engaged community
- Additional Source of Revenue by offering paid membership, fee, commission etc.
What is Social Trading?
Social trading is a method of trading and investing wherein retails traders or investors make trading decisions influenced by an individual or community of professional or expert traders. The Social Trading Platforms allow retail traders or investors to connect with master traders who offer their trading strategies, live trades, and signals with them.
Social Trading is the phenomenon that rose out of the need of loss-making retail traders who want to piggyback on profit-making master traders. Social trading is a real cooperative trading format wherein the different classes of forex traders get to benefit.
What is Social Trading Software?
As you would know the whole forex trading market is online. Spot Forex Trading industry runs on different forex software, tools, applications, plugins interconnected with the internet.
Social Trading Software is usually a plugin, application, or tool that helps social trading platforms to offer their services to investors. It helps in connecting master traders and retails traders, connect their accounts, get seamless trade alerts and signals along with periodic reports of performance, profits & loss, etc.
Features of best Social Trading Software or application
No limits on Trading Accounts
It should be compatible to manage as many trading accounts (MT4, MT5 accounts) as needed. There shouldn’t be undue capping on how many trading account one can connect.
When you know a master trader’s trade work opposite of what they say, you can turn losing strategies into profitable by using Reverse Copy Feature which essentially places a trade in the opposite direction of the original order.
Forex Signal Service
Should have the flexibility to market and sell Forex Signal Services.
Multiple Users Compatibility
Should have the compatibility to manage different users which is very helpful for a team of master traders.
Web Application & Interface
Social Trading is a live and real-time activity. A Web application and interface help traders to work on the go.
It should have the flexibility to host on one’s own server or on the cloud depending on the requirement and scale of operations.
Robust Alert System
A social trading plugin or application should have a robust alert system that sends real-time alerts for any trading activity by email, SMS, telegram, etc.
It must have a highly configurable, low latency trade copier for investors to copy the trades as per their need.
How does Social Trading Software work?
Social Trading Software connects with a Forex Trading Platform like MT4, MT5, cTrader, etc. with the help of their respective APIs.
For example, an MT4 Social Trading Plugin uses MT4 Manager & Server APIs to fetch user data along with their trading accounts, balances, margins, order book, etc. This 2-way connection helps the MT4 Social Trading Application to connect different MT4 traders with each other in a Master-Investor Relationship.
The trades placed by Master Traders are sent real-time to investor trader accounts may get copied based on different parameters set by investors.
A proper record of all the trades and signals generated by master traders are maintained and made available to investors for their reviews. This helps them to see which mater traders performed how in a given period for a given asset class and trading instruments.
And last but not the least, the changes in terms of the management fee, and/or commission changes are debited from investors’ accounts and credited to the master trader’s account as per the terms.
Social Trading Software Cost
Social Trading Software Cost depends on the developer and kind of features it has and the most importantly, who is going to take it. A forex broker will need a no limit-no capping social trading plugin while a professional trader may work with a simple monthly subscription plan with account limits.
- An MT4 or MT5 Social Trading Plugin price for forex brokers starts from USD 500 per month and can go up to USD 2000 per month.
- A MT4 or MT5 social trading tool for a professional or master trader who wants to offer their services may cost USD 20 per month for 2 accounts and can go up to USD 220 per month for 20 accounts.
As mentioned above; these Social Trading Software, tools, and applications cost differently to you depending on who you are and at what scale you want to operate your business.
Social Trading is an innovative service that has created a possibility of a WIN-WIN game for all stakeholders in the forex trading community. We know how forex trading is essentially a zero-sum game especially for forex traders as they make money when others lose and vice versa.
But will Social Trading everyone has an opportunity to win.
- Loss making retail traders can have a shot at making money trading forex with the help of professional traders
- Professional traders get to earn additional revenue by changing subscription fee for sharing their trades and strategies.
- Online Forex Forums and websites can offer social trading to their members and enable them to make money
- Software developers get to earn by selling the social trading plugins, tools and application licenses and subscriptions.
Most forex websites and forums only talk about the social trading platforms and services from traders’ perspective which is good indeed.
This article is our genuine effort to explain it from social trading service providers like forex brokers, pro traders, and others.
Hope we could explain the social trading phenomena, software, plugins, applications, and tools facilitating it in a proper way to you.
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Wish you the best!