Social trading and copy trading are quite the same. But in other respects, they are different. While both are perfect for new traders, it’s not always a smart idea to miss steps in the learning process. We’re going to make sure you’re on the right track and that you’re making good progress. This section presumes you’ve read the other social and copy trading sections.
Social trade is a wider concept, and the trade in copies is part of social trade. This means copy trading can be regarded as a form of social trading (which is where the uncertainty comes from). On the other hand, they are not the same.
Copy trading is a very strict type of social trading, which links your account to another trader’s account. Your account represents their trades. Their gains are your income, and your losses. You don’t need to open trades, the mechanism is automated (though you can handle this in some platforms, while in others all you can do is avoid copying the trader).
If you’re a complete novice and you don’t know that social trading and copy trading are different things that may cause you to make some questionable choices.
When you read what social trading is and assume it’s the same as copy trading, you may end up losing part of your portfolio due to misinformation by clicking the “Copy” button believing you’re going to get information from a certain trader.
What You Should Choose
What you will be doing is up to you entirely. For novice traders, however, we would suggest that you learn everything you can about the topic at hand in the first place. Social trading will allow you to transact on the basis of other traders’ knowledge. In the end, you’ll be the one who decides whether or not to trade. You have much greater leverage over your investments and your companies.
On the other hand, copy trading basically demands nothing from you except that you press the “copy trader” button. From that point on all of their acts (including their currently open trades) will be copied to your account. You get even less control over the trades with copy trading.
It’s your decision at the end of the day. If you want more influence then you can use a social trading. You can go for copy trading if you want to trade and you’re sure enough with your own capabilities (even with the community’s help).