PAMM or Copy Trading | Litefinance (2024)

Hello, dear readers!

Today, I’d like offer a detailed analysis of the most advanced, to my mind, trading system – Social trading. Simply put, it enables you to copy other traders’ trades. In the review, I’m going to answer the following questions: Why did Social Trading replace PAMM services? How do you make profits from social trading? How to choose a trader for mirror trading? How to adjust the platform operations? How to assess the risks correctly? How can an expert trader earn on social trading? Why types of copying are the most profitable? How can an investor make more money on social trading platform? How do you attract investors?

PAMM accounts and social trading are 2 similar models of passive investment that may be interesting for both beginners and those who have little time or some interesting strategies. However, the PAMM model has its drawbacks that can result in serious investment risks. Bright examples: MMSIC, Panteon Finance, or ForexTrend. The social trading model excludes most risks associated with PAMM accounts, creating a transparent platform for a full analysis of strategies. The advantages and disadvantages of PAMM accounts and trader selection criteria are explained in this review.

What is a PAMM account and how does it work?

PAMM (Percent Allocation Management Module) evenly distributes a manager's profit, less management fees, among investors based on their share in a total investment. In other words, investors entrust their money to a manager who uses it at his/her discretion in the best interests of the investors. It resembles in part an asset investment system, but PAMM is much more attractive.

How it works

Every manager can open a few PAMM accounts depending on a strategy applied. An investor opens an account with a broker, gets familiarized with the terms of the offer and transfers money to a manager's PAMM account (press the "Invest" button in a portfolio invested, specifying a transfer amount) and then follows trading statistics in the personal profile.

Example. Let's say an investor pays $1,000, manager's fee is 40%, manager's personal deposit is $1,000, and final profitability is 5%. Profit amounts to $100 (5% of $2,000). Before it's distributed, Investor's profit amounts to 50% (according to his/her investment share in the overall portfolio), but then he/she pays 40% of it. In the end, an investor's net profit equals 100/2 * 0.6 = 30 usd.

Advantages of PAMM accounts as compared with asset investment:

• Investments in PAMM accounts are made automatically, profits are distributed automatically as well. An investor can see a manager's offer wherever in the world. Topping up an account with a broker is enough. Concluding a contract with an asset management company and paying money is way more complicated and longer.
• PAMM's relative transparency. An investor can see a deposit curve and a manager's back test statistics. He/she can specify a character of a strategy used in a personal conversation and take his/her money back at any time (if the offer provides for it). The same information is often unavailable at asset management companies.
• Risk diversification. An investor chooses as many managers as he/she wants and allocates money the way he/she wants.
• Tax saving. A management company deducts taxes from profits in any case. A broker, unless it's a tax agent, transfers tax responsibility to an investor. The latter is not really willing to share profits with the state, working with e-wallets.

Disadvantages of PAMM accounts:

• Relatively big manager's fee. Most often, 20-50% of profits;
• high risks. As an example of Zulutrade has shown, most managers use Martingale and averaging practices. Or, even worse, they may be false accounts of dishonest brokers;
• complicated money withdrawals. In most cases, an offer provides for an early withdrawal fee (a fee for withdrawing money before a rollover takes place and profits are distributed);
• no opportunity to influence directly a trading course.

When PAMM accounts were all the rage, there appeared fully-fledged broker platforms dedicated to asset management services. Once the investors in such giants of the Forex market as MMSIC, Panteon Finance, and ForexTrend lost their money in full, the popularity of PAMM accounts somewhat cooled down. Initially, those platforms offered an interesting system of PAMM accounts where risks were halved between an investor and a manager, though such conditions were not beneficial to a manager as a matter of principle. However, investors were impressed, just like organisers wanted. In reality, those platforms turned out to be nothing but financial pyramids and the question "Did PAMM managers really exist" is still rhetoric.

Investors could no longer confide in PAMM accounts. So a new trading model appeared - Social Trading.

What is copy trading and how does it work?

Copy Trading orSocial Trading means trading using a professional trader's strategy with one essential difference: an investor does not make money transfers. He/she subscribes to a trader, and then copy trading begins. In other words, any position opened and closed by a professional trader is opened and closed in an investor's account. Every client of a broker can be both an investor and a trader at the same time.

• all traders are the broker's clients. Trades are copied instantly as they are all conducted on the broker's servers. Delays and slippages are excluded (trading is done only in ECN accounts);
• a broker offers 4 copy trading options. Copying can be done with a full or a fixed size, with a predefined % of each trade or a fixed share of an investor's funds;
• a broker is an intermediary between an investor and a trader, earning solely from spreads and standing surety for the both parties, without charging any commissions. A broker cannot access traders' and investors' personal accounts. The history of trades is recorded on the server and cannot be modified.

How it works

A social trading platform provides for every option to protect investors' interests. Every trader has his/her investor password that excludes broker's intervention in his/her trading. Prior to subscription, an investor can get the trader's investor password in the live chat and ask any questions concerning the strategy. In his/her turn, a trader is interested in keeping a good reputation: the more investors he/she attracts, the more commission he/she will earn.

Remember: the PAMM model means a manager can fully dispose of investors' money. There are real examples of platforms asking a manager to blow an investor's deposit for a monetary reward. Otherwise, the manager could risk his/her account. In Social trading, a trader earns a commission for profitable trades and values his/her reputation. An investor can get detached from a manager at any time, which is impossible under the PAMM model.

Before starting to copy trades, you need to estimate risks, potential profits, margin amount, and so on. Use a Forex calculator not to get stopped out before a trader.

Advantages of Social trading:

• the whole of information on a trader's trades is in free access, including a short description of his/her strategy and the history of trades opening. An investor can put all the questions to the trader in person;
• an investor's money is kept in his/her account and he/she can disconnect from the trader at any moment if the latter is suspected of trying to blow the deposit;
• an opportunity to limit risks, setting "a copy stop level";
• an investor can influence a trading process, applying his/her own stop loss levels to the trader's strategy, closing an open trade earlier, changing a volume, etc. I.e, an investor can manage risks under his/her own risk management system;
• there's an opportunity to chat with the trader in a real time mode. There's also a news feed where an investor can see the trader's current results and trading discussions.

An investor can make a choice based on fully open data. The manager and his/her strategy are assessed by investors themselves.

How to choose a trader for copy trading:

• check his/her account's lifespan and the number of opened/closed accounts. Accounts are usually closed for better statistics, so too many accounts closed are a bad tendency. Account age: at least 6 months;
• analyse average annual and monthly profitability and profit for the past month. Check the behaviour of a deposit curve in crucial moments of the past year;
• assess maximal drawdown and profit in the accounts as expressed in % of a deposit;
• don't seek after the best traders. Instead, invest in those who offer the lowest risks. Higher profitability is associated with higher risks;
• pay attention to most people's opinion: the more subscribers a trader has, the better. The amount of a trader's own share and reinvestment is also important (it should be at least 10% of investors' capital). All this can be seen in a trader's statistics.

Remember that a good choice of a trader doesn't guarantee 100% profit. We don't recommend that you invest in scalping where even fractions of a second matter. Try to ensure that the conditions in your account are as close to the trader's conditions as possible: we mean leverage, deposit ratios, and so on.

So, what to choose: PAMM accounts or social trading? Social trading, of course. This model is more transparent than PAMM. But the most important thing in social trading is that a manager (a trader) is not tempted to blow an investor's money. And what would you choose?

Why do investors more often choose Copy Trading than PAMM?

PAMM is a form of pooled money forex trading. The profit of a managing trader is allocated to investors in proportion to their investments. Basically, investors give their funds to the managers who may manage multiple forex trading accounts on their own during a certain period of time.

Social trading is following the trading activities of a successful trader. The main difference from PAMM is that investors don’t transfer their money to the managers’ accounts. An investor just copies a trader so that his/her every single trade is automatically executed on the investor’s account. In this system, a participant can simultaneously be both a trader and an investor, and so, generate two types of income.

To find out what system is better, let’s compare them according to a number of key parameters:

Where your funds are kept

In the PAMM system, you funds are transferred to the trader’s account and can be managed only by the trader. In social trading, your funds stay on your account; a certain amount is reserved for copying trades and you can manage them on your own

Statistics for analysis

In the PAMM system, most often only the statistics that the manger wants to display is available to investors. By default, it is the yield chart, proportion of profit compared to the initial capital and the commission fee, charged by the trader.

In social trading, each manager is subject to automatic obligations to provide information and can’t hide anything. The transparency reaches so high degree that investors can monitor both closed trades in the history and the currently opened positions. The yield chart can displayed in the form of Japanese candlesticks and divided into timeframes, which makes it much easier to analyze the chart that is simple and illustrative.

Trade managing

In PAMM system, investments can’t see the trades opened by the managers; they can see only the closed ones, if the traders wish. Of course, investors can’t somehow interfere in the trading process until the investment period expires. In social trading, the funds remain on the investor’s account and he/she sees all entered and exited trades in real time and can set limiting orders or exit them on their own.

Management options

In the PAMM system, an investor can only specify the amount he/she wants to invest in a trader; it is suggested that, in case of a failure, the investor may lose all invested funds. In social trading, investors set a number of parameters, including trade type, volume of copying, amount of money, as well as the level to stop copying, that is the amount, the investor’s losses won’t exceed in any way, even in the worst case.

Commission for management

In the PAMM service, it was a common practice when a successful trader charged his/her commission for copying of about 80% or even more. Over time, it resulted in that the platform was divided into 2 groups: beginner trader, charging a commission from 20% to 50%, and expert trader, whose commission was 50% and more. Such high commissions may have scaled back this system in the modern market. In other words, if are an investor and you want to cooperate with a successful trader, you’ll have to give away more than a half of your profit to the trader. In social trading, the commission system is independent and the most popular and successful trader charge the lowest commission. It is because there are more investors than traders in the community, and so the expert traders have a plenty of investments, therefore they can afford to cud the commission down to attract new investors. Currently, and average commission in the system is about 20%. It looks quite appealing, doesn’t it?

Communication between investor and trader

In the PAMM system, an investor can find the trader’s profile right a personal message, after that he/she expects an answer. The matter is that traders may not visit their profiles for months, and so, they do not see your message. In social trading, there is a special built-in platform that allows traders to communicate with investors. They can exchange instant messages via chat, there is the trader’s news feed, displaying the current performance of the trader’s work. There is also available full statistics of the trader's work, and an investor can ask a question at any moment.

Summing up all the above, it is clear that the PAMM service system is out of date and is significantly poorer than social trading in all parameters.

How do you make a profit from social trading?

On a Social Trading platform, anyone can participate as a trader, an investor or both. Each direction has its own sources of income and the way to generate it. Let’s take a look at the ways to generate income for each category:

The trader is the platform participant who registers his or her own trading account in the system and configures it so that investors can copy his or her trades. The trader trades on his or her own trading account, and the current performance is displayed in the news feed. In addition to the profits yielded by the trades, the trader also receives a commission as a percentage of his/her investors' output.

The more investors copy the trader, the more commission fees he/she receives. The management commission is called profit-sharing in the system. When a trader is successful and many investors copy him/her, his/her commission can manifold exceed the revenues from the own trading. Successful traders can be provided with better terms by the company, so that they don’t need to attract investors on their own- they will be just recommended by the company, and that is the most important bonus.

Investors are the system participants who analyze the traders’ rating on their own, according to a wide range of parameters; select the traders that are appropriate in every way and independently set the parameters for copying the trading behaviour of the selected trader.

For the profit, an investors receives by means of copying, he/she pays the trader a share of it (profit-sharing), the amount is different for each trader. The profit share is automatically written off the investor’s account either after the copying is stopped or after the rollover by the trader.

Investors’ income in the social trading system depends on a number of parameters such as:

1) Invested amount. It is the amount of funds that investor allocates to copy the trader.

2) Type of copying. There is a number of copying types, the choice of the certain type directly influences the profit from the copied trades. You can set a particular volume and receive a preplanned income; or you can copy in proportion to the trader’s amount of funds..

3) Trader’s performance. Most investors, selecting the trader, look first of all at the profitability chart. Differently put, investors estimate how the trader works, how strong his account fluctuations are, and how much profit he has already made. But this parameter isn’t always illustrative. Investors often miss such parameter as how long the trader has been working in the system. If one has the return of 300% for 6 years, it is 50% a year, which is not that outstanding performance for the foreign exchange market. Another trader has the same 300% return, but for a year. You income when copying these two investors will be much different.

4) Trader's commission. Each traders sets his/her own commission fee that investors are charged; so, the investor’s income much depend on the commission amount, as you can copy for 20%, or for 50% , for example.

How investor operates in the system

In this section, I’ll describe all the peculiarities of Social trading participation as an investor.

Well, let us begin:

1.To start, you need to visit your client’s profile and select the Traders tab on the left menu.

2. In the opened window you see the section of traders’ choice and the filter setting of the window. By default, the Favorites tab opens, where you see short information about the traders, you’ve marked.

3. The Popular tab displayed the traders, ranked by their popularity, that is those traders who are browsed and selected for copying most often.

4. The High profitability tab groups traders according to their profitability, displayed in %. So, the traders who perform the biggest profitability are at the top of the rating.

5. The Minimal risk tab sorts the traders according to their risk parameter. This parameter is calculated, based on a complicated formula, including such elements as the amount of maximum drawdown and the share of traded funds. So, the traders with the least risky strategies will be at the top here.

6. Next, let’s see the mini profile of the trader, you’re interested in.

7. In the middle of the window, there is information about the trader’s profitability during the entire period of the trading.

8. On the right of the Profitability data, there is the Risk parameter. It looks like a scale from 1 to 10, where 10 is the highest value. That is the profit may much more than that of other traders, but the risk of losing the funds will be also very high.

9. The number of traders who are copying this trader.

10.Next, there is an approximate value of the funds managed by the trader.

11. When you click on the trader's profile itself, you will see more detailed statistics.

12.In the middle of the window, there is the Profitability chart. The Profitability chart displays the trader’s successes and failures during the whole period of his/her work in the system. The chart is rather adjustable, so you can configure its settings as you need. However, you may not always identify a really successful trader, based on the Profitability chart alone. The longer is the period a trader has been working, the more smooth it looks, and the less prominent are deep drawdowns in the profitability. For a trader, a 100% drawdown is as just a slight downward movement of the chart. But for an investor, who has begun copying at the very peak, it may turn out into a disaster. That is why I don’t recommend framing your analysis only in studying the profitability chart.

13. For a more detailed analysis, you need to click on the Trading history tab, where you will see the information about the trader's all closed positions during the period of his/her trading. Of course, a newbie will learn little from this information, but expert investors usually assess the managers’ performance, based on this parameter.

14.In the snapshot below, I circled the section that contains all the information about the closed trade.

15. The first column displays the instrument, the position was opened for. In the given example, it is EURUSD

16. Next, there is information about opening date and time of the position’s opening and closing. Based on this parameter, you can often identify the strategy, utilized by the trader. If you analyze most trades, you can find out if the trader exploits a trading robot, as if so, some positions are opened and closed at a certain time.

17. Next comes the trade type. In the given case, it is sell. There three types of traders, according to the trades they most often enter: sellers, buyers, or both. This trader is a universal one, that is his/her strategy suggests both trade types.

18. Next, there is the trade volume. The volume is expressed in lots. In this case, it is 0.1 lots. According to the statistics, this trader has about 30000 USD of personal assets, and trading 0.1 lot, he/she uses the leverage of about 1:3, which changes according to the number of orders, opened at the same time. It refers the trader to the category of conservative traders, that is the traders, who feature the minimum risk.

19.Further on, there is the information about the price of the trade entry.

20.Next to it, there is the price of the potion closing. Together, all these parameters also add the information to about the trader's trading system. The trader is obviously operating in the short-term time-periods, as the average profit, calculated in points, ranges between 100 and 300 points, which engages a lot of extra risks that can’t be always avoided on time. You can learn more about the advantages and disadvantages of different timeframes in one of my articles

21.The last box contains the information on the amount earned or lost on the trade.

22. After you analyzed closed trades, you need to analyze the Info about trader section

23. The main window displays the information about the trader's country of residence, the number of days he/she has been operating in the system, approximate amount of personal assets, approximate amount of investors’ (copy traders’ assets), and the number of copy traders (investors).

24. After that, you can have a look at the trader's profitability chart by months. These data will also help you analyze the trader's strategy. For example, if you pull together the profitability data over a month, for example, June, 2018, when the trader made 41.6% profit of his/her personal funds, you’ll see about 14000 USD. If you remember that the trader is operating with 0.1 lots and closes an average profit of 200 points, you’ll see that the profit from one trade is 20 USD on average. Divide 14000 into 20m and you’ll see that the trader performed about 700 trades during the month. Next, divide 700 into 21 and you’ll get about 33 trades per day, which is too many, far too many. According to statistics, strategies, suggesting a large number of trades, engage the highest risk of losing all the funds.

25. ТYou can also read the information that the trader wrote. As a rule, it is the recommended minimum deposit for investing and the recommendations on the fixed volume of copying.

26. Now, let’s compare this trader with another one. Let’s analyze, for example, the one who has performed negative results over the whole period of trading and try to estimate his/her trading. In the Profitability chart tab, it is clear that at the beginning of the trader’s works, there is a strong drawdown, followed by equitable growth of profits during the period from February till July. Such incompatible results during different periods may suggest different reasons. One of them might be just common withdrawal of the funds by the trader, which looks like a sharp fall in the chart. Therefore, the drawdown might not be the trading performance, which, in my opinion, is the most likely as the entire further chart looks perfect.

27. Next, let’s analyze the trades. The data are really surprising. The trading efficiency is just incredible; during some long periods of 2 and 3 months, there is not a single losing trade! Look at the profit! It is manifold higher than that of the previous trader. Therefore, this trader can provide your investment profit by just one trade.

28. Next, let’s estimate the time of holding the trade. On average, it is from a few days to a week, which is also a positive sign, as we understand that the trader is mostly operating in long-term periods, where are not sharp changes or price swings.

29. Now, let’s assess the number of profit points that the trader takes. The average profit is about 2000-3000 points, which means that the trader mostly trades in the trend, and so his/her trading strategy is rather accurate in its signals.

30. And finally, the lot. It is not much different from the previous trader’s lot. It also means the low risk of trading operations, the financial leverage doesn’t exceed 1:3.

31. In the previous example, I skipped the Portfolio section that displays the information about the currently opened positions of the trader.

32. You see that there entered two sell trades with a very little volume, 0.07 lot, which have already yielded a small profit. However, based on the analysis of the trader’s previous trades, I can assume that these positions won’t be closed soon.

33. When you have analyzed a number of traders, you need to select one of them, or you may choose all of them, the decision is up to you. I personally would choose the second trader. So, let’s do so for an example. On the right of the Profitability chart, like in the trading terminal, there is the box adjust the copying setting. First, you need to choose the copy type.

34. There four copy types available: in proportion to my funds, full size copying 1 for 1, fixed size of each trade, % of each trade volume. I’ll explain what each type means:

1) In proportion to your funds. This copy type suggests that volume of each trade, copied to the investor’s account is defined by the ratio between the amount to copy and the amount of the funds on the trader's account.

2) Full size copying 1 for 1. This copy type suggests that the copied trade's volume will be equal to the corresponding trade on the trader’s account.

3) Fixed size of each trade. This copy type means that the copied trade’s volume on the investors account will be always equal to the fixed volume, specified in lots in the copy setting.

4) % of each trade volume. This copy type gets the copied trade’s volume to be of a certain percentage of the corresponding trade on the trade’s account.

Let’s set the Fixed volume of each trade.

35. If go back to the previous window, you’ll see that there are now more options for settings. The first one is the volume to copy in lots. Remember, according to this copy type, each copied trade will be opened on your account by a fixed lot-size, that is 0.06 in the given example.

36. Now, I’ll set the amount to copy. With the given size of 0.06 lots, in order to avoid extra risks, I would give 1000 USD, which, as displayed below, is about 38% of the total funds on my account.

37. Next, you may adjust the parameters to stop copying. As I’ve already written above, it is the amount you risk when copying a certain manager, and even in the worst case, you won’t lose more than this amount. In the given example, it is 10% of the amount to copy, that is 100 USD.

38. In fact, you should take this parameter very seriously, as that is what can finally determine whether you’ll make a profit or not. It may happen that the trader could have a drawdown of 101 USD, followed by a sharp growth and the profit of 50%. An excellent result, but you won’t have the same just because you’ve set the Max loss at 100 USD, therefore, your copying will be automatically stopped, so, you’ll have only the loss. So, you must be extremely careful about this parameter. I wouldn’t recommend setting it less than 20% of the invested amount. Basically, it must depend on your trading strategy.You may enter the level to stop copying according to the Max profit. It is useful sometimes, but we are all maximalists, it may not be set.

39. When you have adjusted all the settings, just click on the COPY button.

You will see a message copying has been launched and you will see it in the terminal in your portfolio. You can stop copying by clicking on the Close button, or, you can configure the copy settings by clicking the Edit button.

41. If you go back to the trader's profile, and look at the portfolio section, you’ll see all trader's trades, and those, being copied to your account will marked by a special symbol.

42. After a while, the changes in the profit or loss yielded by copying will be displayed in you deposit tab. In the given example, it is profit that is 0.61 USD. It is the total profit from all trades, being copied, with a deduction of the commission fee.

43. So, copying has been launched, all the settings have been adjusted, and we can go on and see what other opportunities the system provides. For example, you can write a message to the trader and ask some questions. At the beginning, I should note some points. The option to get in touch with the manager online is, of course, very good, but you should keep in mind that the trader is working and earning the money for you, so you shouldn’t too often disturb him/her with different questions. It is like distracting the bus driver when the bus is on the way.

44. In trader’s profile, you click on the Write a message button. As you remember, we have thoroughly analyzed his/her trading strategy. Imagine that the trades, currently entered, don’t match to the trader's usual style. So, you decide to ask a question, concerning this.

45. The answer comes soon. In fact, the system works perfectly, compared to the message exchange in the PAMM service. The answer, by the way, is quite expectable. According to the trades volume, it was clear that those are short-term positions, rather than long-term ones. Therefore, you don’t have to wait for the profit from copying for a long time. If there will be any profit at all.

46. Now, let’s go back to the trader's positions. You see there two new trades that have been copied to your account. The ones, opened earlier, are already generating an acceptable profit. In your Total Assets section you see an increase.

47. And the current change is already 7.72 USD. Well, let’s see what's next…

48. After a while, you see that the current profit is already about 60 USD, and that is the amount you had been based on, before you started copying.

49. Next, you face a choice – whether to stop copying and take the profit or go on. My personal experience shows that it is better to take the profit you already have and not to risk more.

50. Well, to fully experience the profit made, let’s withdraw it from the deposit. To do it, you need to click on the Withdrawal button.

51. Next, the Withdrawal tab opens, where there are a number of withdrawal methods. As the amount is not big, it is more convenient to withdraw it to the electronic wallet of a payment system.

52. In the given example, it is QIWI. You also see the main parameters of this system, like commission fees and the minimum payment.

53. Next, you enter your wallet number and click on the ADD button

54. Now, you enter the amount in the needed currency. In the given example, it is RUB.

55. The withdrawal details are displayed under the amount box.

56. Now, you just need to click on the Continue button and in some time, your profit will be received on your e-wallet and you will get the real money.

That is how you can operate as an investor in this system. You see that everything is quite simple and quick here. Nowadays, Social Trading is the fastest and the easiest way to generate passive income from investment that requires little or no knowledge about trading. Now, I hope, you understand everything about the process.

How do you operate as a managing trader in Social Trading

In this section, I will describe how do you operate as a managing trader on Social Trading platform

So, Let’s start:

1. To start operating in the system, you need to adjust your account that will be displayed in the system. In the main window of your client’s profile, you open METATRADER tab on the left menu.

2. Next, you need to choose the account that will be displayed in the system. If you have several accounts, you need to turn one of them into main, and it will be displayed.

3. After you’ve chosen the needed account, you click on the Allow Copying button at the top of the window

4. Next, you need to open the account settings section in your profile and

5. There will open the widow, where there Personal Info section will be selected by default.

6. To start working, you need to adjust trader’s profile. To do it, you click on the Adjust button.

7. In the opened tab, you can fill in the information box, Personal info. It usually contains main information: a brief description of the strategy or the details of the investors’ funds that are convenient for the trader.

8. In this box, you specify your commission fee, the share of the profit from copying. I must note that the less is the commission, the more appealing you are for investors. But it shouldn’t be also too little, otherwise you will be doing your main job almost for free. I suggest you base on the average commission, charged by top traders. Ass I’ve already written above, it is about 20-25%.

9. And finally, you enable the option Make available for copying.

10. There will open Trader's Questionnaire. It aims at specifying main aspects of your trading strategy, which will help a potential investor take the decision, whether to copy you or not, faster. The first question is about the number of instruments you trade. Trading instruments are currency pairs, CFDs, available for trading.

11. Next point is about your average lot size. If you are signing in as a trader, I am sure, you know how to calculate the lot size and what does it depend on.

12. Next, you enter the number of trading strategies, you apply. There are traders who work according to the situation, and so they have a particular strategy for each market situation. But, most often, experience traders have one or two main trading strategies.

13. And the final question is about trading instruments, you most frequently use. Most traders usually use a particular type of trading instruments and don’t like trading different types of contracts. It is mostly affected by your habits, what you have been trading longer, and what you like more.

14. After you filled in the questionnaire, you click on Complete.

15.The next question on the second page of the questionnaire concerns news trading. News trading is worth special attention because it is one of the riskiest trading strategies, and this question allows investors to understand if they are exposed to risks.

16.The next question is about order types. Here, you need to indicate if you prefer market or pending orders.

17.Next, you should specify how many trading strategies you use. Some traders have a particular trading strategy for each specific market situation. However, experienced traders most often use one or two trading strategies.

18.Finally, indicate your most used trading instruments. Most traders choose specific trading instruments out of force of habit and tend to avoid different types of contracts: we usually stick to what we work longer with.

19.Once you've answered all the questions, click “Complete."

20. You will go back to Trader’s profile where Make available for copying option is already enabled, and your profile will be added to the rating of traders. To complete the adjustment, you you click on the Save button.

21. When you have started trading on the account, your trading statistics will be forming in your trader’s profile. Let’s have a look at it by clicking on the corresponding button.

22. In the opened window, you click on the Opened orders tab and see the information about all orders, currently opened on your account. Based on the intermediate result, you have every chance to succeed and attract many investors.

23. After a while, there will be statistics on your trading performance, and, if it is appealing for investors, they will copy you and you’ll receive a share of their profits, in addition to your own trading operations. The Copy traders tab provides information about who is copying you, what assets investors manage, what profit they have received from copying you, and the amount of your profit after the rollover.

24. You can follow the information about traders, who started of closed copying you, in online mode, due to the incoming system messages.

25. It is available in the Notifications tab.

That is how a trader works on Social Trading platform. However, a trader’s job is much harder than an investor’s. To become a successful trader you need to consider many aspects, including trading skills, profound knowledge about the trading process and the system work, the skill of attracting investors and many others. I’d like to pay special attention to how you can attract investors...

Ways to make your profile more attractive to investors and get them on your own

There are quite many people, earning their living on forex trading investments. However, to get these people interested in you, you need to ensure them in your professional skills and your ability to generate steady income.

Social Trading provides the fastest solution to this issue. Your mirror is your profile. The clearer and more transparent it is, the more potential investors will be interested in you.

Of course, your profile transparency alone is not sufficient. You trader profile should be attractive, that is your trading statistics should ensure investors, that if you manage their money, it will be safe and have a huge profit potential.

To do it, you need to get your profitability chart to look appealing. It should be rising up, and there shouldn’t be deep drawdowns or sharp swings on the chart itself. The profitability chart and the total percentage of profits made are two major factors that are assessed by beginner investors.

Beginner investors are your target audience, as advanced investors already have a pool of appropriate traders they know, and they are not willing to trust their money to someone new. It may seem very easy, as you need to meet just two parameters. But to match them, you need to adjust and brush your trading process to the perfection. Differently put, beginners may be lucky sometimes, but their statistics will soon show that they are newbies. And no investor would like to trust their money to a beginner. That is where the second parameter is. It is how long you have been operating in the system. Accounts that have been profitable for a long time look more appealing for investors, as, it shows that the traders, managing them, are experienced and advanced.

However, investors aim at different things. Some of them want to make big profits as soon as possible. Those investors will look for such a trader who can generate huge profits during a short period of time.

But such investors must accept that the more a potential profits is, the more risks of losing money are. Another group is, on the contrary, agrees to earn not so big income, but steady and for a long time.

So, when your account is ready, you are a successful trader, your profitability chart is rising up and you have been operating for quite period of time (from 2 months), it is the right time to start attracting investors by yourself.

Now, there are quite a lot of opportunities for this. There many social networking services, and a lot of communities there, where traders and investors share their view points. If you are successful and most of you forecasts are accurate, why not share them with others? You need to present as an open, sociable person. You must also open accounts on the social networks, be able to use Skype and other mobile apps.

When you want to attract investors to your profile, you need to provide them with the opportunity to see the personality, who they can work with. They risk their money, and so, they have the right to know about the person, they may want to manage their money.

Social Trading platform itself provides communication with potential investors, as well as transparency and publicity. There is an Instagram channel, communities on social networks, topical group chats on Telegram, and finally, the built-in chat in the system itself. Detailed information about the links to these services are at the end of the article.

So, share you viewpoints, publish your transactions, your profitability chart, and potential investors will soon pay their attention (and money) to you.

Summary

In conclusion, I’d like to note that there are a lot of ways to get additional money; and the most important is that they require little efforts and initial knowledge. You only need to start, and you’ll surely succeed. If you already have some experience of operating in financial market, Social Trading platform is the best way to get extra cash for you.

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.