Criteria for selecting of a successful provider
Social network for traders
Social Trading is a new type of service offered for investing and earning passive income in the Forex market!
Social Trading is designed for the traders who want to copy transactions of the more experienced and efficient traders and prepared to pay some interest for this service.
Traders who copy trades are called duplicators. Traders who offer service to the duplicators are called providers. In the terminology, which we used for PAMM-management, these people will be called investors and Managers of the accounts.
A beginner may ask why Social Trading program instead of PAMM management?
The answer is very simple. In case of PAMM accounts an investor entrusts his/her money to a Manager for trading, while in case of Social Trading an investor (duplicator) him/herself trades on his/her account using a strategy of a Provider. All trading procedures are carried out in automatic mode, which is a common feature of both programs: PAMM and Social Trading; which means that social trading also allows you to earn passive income without direct involvement in trading.
Social Trading is a good option for people who are not too confident in the market and have not yet mastered all strategies of Forex trading.
However, note that it is of great importance to select an appropriate provider. We would even recommend you to select several providers, thus, using the principle of investment diversification, as many successful providers will ensure security of your funds and high profit from the trades.
Criteria for selecting providers
In order to select an experienced provider, it is important to apply certain evaluation criteria.
The procedure is similar to selection of a Manager in case of the PAMM accounts at Forex.
On the website of a professional LiteForex broker in the tab "Social trading" you can see the rating list of the service providers. Based on the rating data you can choose your future trading partner - a provider.
Lets’ view the criteria more closely
- Period of time a Provider works at Forex - this is not the key criteria for determining the most experienced and successful provider who will provide security of your funds and high profit in the market. However, a trader who has been working at Forex for at least six months, will have time to obtain some experience in the trading, you will be able to review the history of his/her trading operations which is quite helpful for judging and evaluating work at Forex. On the other hand, regardless of the time period, which a provider has been working at Forex, if his/her activity is low and trading results are not good, it makes no sense to consider him/her as a future provider.
- Share of Provider’s investment is very important criteria for selecting a provider. If he/she does not invest his/her own money in trading, his/her commitments and interest in trading can be insufficient. On the other hand, we cannot expect that a provider will make large investments, as his/her main objective is to provide service and receive commission for copying his/her trades.
- Level of Provider’s Profit is the criteria, which can tell a duplicator how much profit he/she can earn if he/she selects this provider. High profit of a provider gives you a chance to receive high profit too. However, we cannot rule out possibility of loss, as trading in the market always bears some risks.
- The number of duplicators and the amount of money invested in to the copying trades is a criteria showing confidence of the duplicators to a provider. If a column “Duplicators’ funds” in the rating table shows you just a minor amount, you probably shall not trust this provider.
The additional criteria for evaluating efficiency of a provider are the history of his/her trading operations for 3-6 months. You will see the results of the trades, the highest level of profits and losses. It is also worth of paying attention to the history of payments to the duplicators.
If you do not rush, but thoroughly evaluate potential risks and carefully select a provider, SocialTrading service can help you to receive stable profit.