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F.A.Q.

F.A.Q.

How does it work?
Your funds are held directly by the broker so the expert traders will have no direct access to your capital. Instead, all their trades are copied to your account. With the etoro network, the trades are copied proportionally from the expert traders account to your own. With zulutrade the trades are copied accourding to your settings.

How do I get started?
Read about the social networks and my recommended stragetegies here. Then open an account at your preferred platform and continue with the next step on the strategy page.

How much does it cost?
Access to the social networks is absolutly free. The only money you will need is your trading capital, which I recommend not to be lower than $250 USD on etoro. Zulutrade recommends that the lowest amount for a mini account is $500 USD, even though some brokers may offer lower amounts.

How do I fund my real money account?
Wiretransfer, credit card, Paypal and Moneybookers are all good options and are often supported by forex brokers. With a credit card you will sometimes be able to trade right away. However, Moneybookers has lower transaction fees and you won’t need to type your credit card information every time you use it.

What is ‘spread’ and why do my trades start off negative?
Brokers make their money through the spread, which is the difference between the bid and ask prices of a currency. If the spread is 4, then your trade will open at –4 pips and all you have to do is be sure that the price will go your way far enough to cover this.

What is Slippage?
Slippage is the difference between the price at which you enter a trade and the price at which your broker actually executes it . The risk of slippage increases under volatile market conditions such as major news events, which can make it impossible for your broker to execute a trade at the requested price. In this situation, the broker will often execute the trade at the next best price. In Social Trading, slippage can also happen if the provider and receiver of a signal use different brokers with different spread prices.

How do I reduce slipperage?
With etoro you shouldn’t have problems with slippage between the trader and the copier since both will use the same broker; however, for the serious invester, the MT4 platform is recomended. With Zulutrade it is recommeded to use their directly integrated broker called AAAFX in order to reduce slippage.

Is my money safe?
Yes, your capital is always held directly by your chosen broker and is regulated in their country of registration. When you open your account you will need to send identity verification documents and your funds can only be withdrawn to an account held by yourself. You can withdraw your funds from your broker anytime you want.

How much risk am I taking?
If you know anything about stock trading, you will know that trading with borrowed capital on margins is extremely risky. With stocks, if the price drops beyond a certain point you can be committed to paying out more than was in your account. With the social trading networks you will never lose more than you deposit. However, remember that high leverage also means high risk, and that higher risk will follow if you choose higher levels of leverage available in forex trading.

What is Skrill?
Skrill, formerly known as MoneyBookers, is a digital wallet used as a secure, low-cost, internet-based alternative to traditional money transfer methods such as cheques, money orders and wire transfers.

I didn’t find my question here. What should I do?
This page is meant to give some fast answers to the most general questions regarding social trading. If you need further information I recommend that you read the FAQ of a network that interests you.

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