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Social trading traps

Discussion in 'Forex and Cryptocurrencies' started by StockyGuy, Jul 9, 2019.

  1. StockyGuy

    StockyGuy Observe, Discuss, Apply

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    Just recently got my new MT4 platform fired up. Really surprised to see all these signal providers trying to sell you their trades for copying.

    Naturally the often mind blowing rates of return were worth looking onto.

    I'm mainly looking at in a forex context, but I've been investigating other types of social trading.

    Has anyone used these things? Anything good or bad to report?

    Some observations:

    1. A lot use some terrifying type of Martingale. Ie, fantastic results as they keep on buying a losing pair, until there's nothing left to buy with.

    2. A lot of the traders are using insanely low balances of their own money in the account which you might be copying - a clear sign of the confidence they have in their own strategy.

    3. Bit of research on who the big popular traders were couple years ago is often interesting - these traders are often now performing rather underwhelmingly.

    4. These traders often have multiple separate signals they provide - so the old scenario where at least one will be winning at any time, even if their other few aren't. 20 USD and often more a month per subscriber with 100 subscribers is nice money for anyone, but especially those situated in the third world and poor parts of Europe.

    5. There's a rumour around some of these signals are created by platforms themselves - there's often a relationship between broker and signal provider platform. And of the real ones there's some idea that the ones who trade more frequently may get better promotion due to higher brokerage/spread benefit to broker.
     
  2. barney

    barney

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    Haven't traded Forex for a while …. but on MT4 platform …….. First criteria for following anyone's tips/trades etc would be proof that the trading account is a "live"/real account and that it has a decent "bank"/balance being traded … and has been traded for a reasonable amount of time:cautious: (preferably 12 months minimum)

    Anyone can set up a dozens of demo accounts on MT4 simultaneously and trade them until eventually a few of them will hit some large winning trades and look "brilliant" to the unsuspecting buyer ……

    Treat all as rubbish unless suitable proof is readily produced and verified …. and then be skeptical;)
     
    StockyGuy likes this.
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