social trading explained

15
An Introduction to Social Trading Frank Hemsley Forex Round-Up

Upload: fshirani7619

Post on 28-Nov-2015

38 views

Category:

Documents


1 download

TRANSCRIPT

Page 1: Social Trading Explained

– 1 –

An Introduction to Social Trading

Frank Hemsley Forex Round-Up

Page 2: Social Trading Explained

– 2 –

IMPORTANT INFORMATION

Spread betting carries a high level of risk to your capital. Prices can move rapidly against you and resulting losses may be more than your original stake or deposit. Margin amounts vary between spread betting companies and the type of markets spread bet.

Past performance and forecasts are not reliable indicators of future results. Spread betting is not suitable for everyone - ensure you fully understand the risks involved and never risk more than you can afford to lose. Commissions, fees and other charges can reduce returns from investments. Tax treatment depends on individual circumstances and may be subject to change in the future.

Always seek personal advice if you are unsure about the suitability of any investment. No responsibility for loss occasioned to any person of corporate body acting or refraining to act as a result of reading material in this report can be accepted by the publisher, the Author, or any employees or agents of either. It is up to the reader to ensure than any trade or trades he/she places, if any give effect to his or her wishes.

Fleet Street Publications Limited, which is in the same group of companies as Agora Lifestyles Limited, receives commissions from ayondo Markets. ayondo markets Ltd. is a company registered in England and Wales under register number 08248081. ayondo markets Ltd. (FRN 591040) is an Appointed Representative of Gekko Global Markets Ltd. Gekko Global Markets Ltd. is authorised and regulated by the Financial Conduct Authority, FCA Register number 184333.

* To qualify for the exclusive sign up bonus offer outlined in this report you need to open a new account with ayondo markets with a minimum deposit of £/€100 before the 27th June 2014. The first 500 new account holders to email [email protected] will be credited with £/€100. This offer is only available to customers who process their application through links within this report or via: www.tradingbonus.co.uk

* The £/€100 may only be withdrawn once 1000 trades have been completed. If you withdraw or partially withdraw your initial deposit before the bonus is cleared, Ayondo Markets will remove your bonus in proportion to your withdrawal. For full terms and conditions visit: http://www.shortspreads.com/en/legal/offers/2013-10-account-opening

Forex Round-Up is published by Agora Lifestyles Limited. Registered office: Curzon House, 24 High Street, Banstead, Surrey, SM7 2LJ. Registered in England No. 3303666. VAT No. GB 629 7287 94.

© Copyright 2013 Agora Lifestyles Limited. All rights reserved. No part of this report may be reproduced by any means of for any reason without the consent of the publisher.

Page 3: Social Trading Explained

– 3 –

Introduction to Social Trading

Hi – Frank Hemsley here...

And as the editor of Forex Round-Up, I sometimes reckon I’ve seen it all. Suffice to say, it takes a lot to get me excited about something “new” in the world of trading...

But today, I want to show you something genuinely exciting, genuinely new, and – most importantly – with genuine profit potential.

I’m talking about something called “Social Trading”...

And whether you’re an experienced forex trader, a relative newcomer, or even if you’ve never traded before in your life – then I reckon you’re going to find this fascinating.

Simply put, it’s a way to enjoy all the potential profits of top-level financial trading – but without having to analyse any charts, understand any theory or manage any trades yourself.

In short, we’re looking at a simpler, quicker and less stressful way to make money from the financial markets...

And once you’ve taken a look through this report, you’ll have all the tools and information you’ll need to start getting involved with Social Trading yourself.

In fact, I’ll show you how you could even get started with this TODAY – and even earn a bonus of up to £100* on your first deposit once you’re ready to get started.

Now, this way of trading is brand new. Odds are you’ve never seen anything like this before – and it probably doesn’t bear much resemblance to trading as you currently know it...

But once you’ve seen how this works – and the advantages it has over conventional trading – then I reckon you’ll be just as excited by this as I am.

Simply put, it could change the way you make money forever...

So with no further ado – let’s get started.

Best wishes,

Frank Hemsley Managing Editor, Forex Round-Up

Frank Hemsley

Page 4: Social Trading Explained

– 4 –

WHAT IS SOCIAL TRADING?

Before we can answer that question, let’s slow down a little – and look at trading more generally.

As you’re probably aware, when somebody places a trade on the financial markets – whether they’re trading stocks, currencies, commodities or anything else – what they’re really doing is making a prediction.

So when you “buy” a certain currency, you’re really predicting that the price will increase. Likewise, when you “sell” a certain currency, you’re predicting that the price will decrease.

If the price moves in the direction you predicted, then you profit. If it moves in the opposite direction, then you lose money.

Put that way, it all seems so simple. If the price only ever moves in one of two direction – up or down - then how hard can it really be to pick the right one?

As it happens – harder than you’d think.

There’s a lot to consider. Long-term patterns, shorter-term trends, the influence of the news and global politics – all of these things and more affect the financial markets, and profitable traders need to keep on top of them in order to profit consistently.

Don’t get me wrong, it IS very much possible...

But it’s time-consuming – not the kind of thing you can start making money from overnight. And for busy people, with full-time jobs and other demanding responsibilities, learning the ropes isn’t always realistic...

And that’s where social trading comes in.

Essentially, the idea is simple. A social trading network is an online portal where top traders from around the world record every trade they make, live and in real-time.

Every win, every loss, every profit – it’s all stored in an open and accessible database that you, me or anybody else can check out and examine in full.

Then, when you’ve found a trader with a good track record – somebody who you reckon could continue to make good profits in future – you simply click to “follow” them.

In fact, most of the time you’ll be following more than one trader – building a small portfolio of trusted traders.

One way to think of it is like adding friends on Facebook...

And once you’ve added a selection of traders you trust to your “friends list” - your portfolio – you’ll follow every trade they make automatically.

Page 5: Social Trading Explained

– 5 –

Now at this point, alarm bells might be ringing. Surely that’s a lot of control to hand over to somebody you’ve never even met? I mean, what if they snap and decide to risk £100k on a particularly silly trade?

Well, you needn’t worry.

For a start, the returns are always proportional – not absolute.

By this I mean that if one of the traders you follow makes a 3% profit on a certain trade, you’ll earn 3% of your bank in profit – rather than the exact same amount in pounds.

Of course, as with ALL trading there’s always the chance that a trade might make a loss...

But again, this is proportional – so if the trade you’re following loses 2% on a certain trade, you’ll lose 2% of your bank.

This means that you should never find yourself losing a huge proportion of your bank on any one trade...

And if you’ve dabbled in trading yourself, and you’re confident in your abilities, you can also manage your position yourself – or just sit back and let your chosen trader handle it.

So - that’s the basic idea. Obviously there’s more to it than that – and in the rest of this report, I’ll show you a little more detail about how it works, why it works, and how you could profit from it.

First of all, we’ll take a closer look at the Top Traders themselves. Who are they? What exactly do they trade? And what should you look for in their track record?

Next, we’ll examine at the mechanics of social trading. How does social trading differ from conventional spread betting? What does the process look like, and how can you minimise risk and maximise reward?

Finally, we’ll get to the real nitty-gritty – and I’ll show you exactly how you could potentially start profiting from this today – and even claim a bonus boost of £100* for your starting bank.

Page 6: Social Trading Explained

– 6 –

Meet the Top Traders – and their all-important TRACK RECORDS

So – who are these ‘Top Traders’?

Well, one of the surprising things about the traders you’ll find on Social Trading networks is how diverse they are.

Men, women, young, old – the sites are open to just about anybody who’s willing to put their track record under the microscope.

But that’s NOT to say they’ll accept all-comers. In fact, on my favourite social trading network, the top traders must have their entire track record publicly scrutinised for at least 6 months before people can follow them.

For that reason, you can rest assured that whoever they are, they DO have a reasonable degree of market experience.

But what kind of markets are we talking about here?

Unlike most private investors, Top Traders don’t trade in specific shares. Instead, they trade financial instruments such as indices (like the FTSE, DAX or NYSE), commodities (like gold and silver) or forex (currencies – my specialty and the main focus of Forex Round-Up).

But whatever markets they choose to trade, their profile page will reveal everything about their track record, throughout their entire vetting period and beyond.

Naturally, one of the first things you’ll want to know is how much money they’ve made overall...

But there’s actually far more data than that to consider – and it makes sense to make your research a little more detailed.

I mean, it might be tempting just to choose the traders with the highest rate of return...

But if they’ve only been trading for a few months, that factor alone might not provide the best indication of their overall profitability.

Instead, you want to look at how long they’ve been active – because it often makes more sense to follow a trader who’s been making small but consistent profits for years rather than a newer trader who’s made a flashy run of profits in the very recent past.

It’s also worth looking at what specific markets they trade the most – because making your portfolio of traders as diverse as possible is a very sensible move.

By this I mean, if you follow a couple of traders who specialise in forex, then it’s a good idea to balance them with other traders who specialises in gold, silver or some other market.

Page 7: Social Trading Explained

– 7 –

That way, if one market takes an unexpected turn, you won’t lose out completely – because your risk will be balanced and offset by your more diverse portfolio of traders.

If you’re only familiar with one market, this might seem daunting at first...

But remember – the great thing about Social Trading is that you don’t need to be an expert in any given market to profit.

Simply follow a gold expert, and you can profit from gold without knowing a thing about it or performing any analysis yourself.

Of course, it goes without saying that there’s an element of trust involved here...

But by looking through the traders’ track records carefully, you’ll be able to identify who’s worth trusting.

Now, even the best traders in the world do hit losses occasionally...

But as I mentioned before, there are ways to limit your exposure to risk - and maximise your profits.

So in the next section, we’ll be taking a closer look at risk and reward – including some of the key ways in which social trading differs from other forms of trading.

Page 8: Social Trading Explained

– 8 –

RISK/REWARD – WHAT’S DIFFERENT

So, let’s say you’ve identified a few top traders to follow...

And once you’ve added them to your portfolio, you’ll start copying every trade they make automatically – hopefully profiting alongside them.

But how much will you be staking? How much do you stand to make? And perhaps most importantly, what’s your exposure to risk?

Well, let’s start with the staking – because this is somewhere where social trading offers you great flexibility compared to conventional spread betting.

In standard spread betting, your potential risk and reward is worked out on a “per point” basis.

So, you might choose to stake £1 per point – or “pip”. In that case, for every point the currency price moves in your chosen direction, you’ll earn £1. Conversely, for every point it moves in the opposite direction, you’d lose £1.

Social Trading has some important differences.

Firstly, you won’t be choosing a specific amount to stake per point. Instead, the amount you stake – and also the amount you stand to win or lose – is determined as a proportion of your total bank.

You see, it’s very unlikely that you have the same amount in your account as the traders you’re following...

So if they were staking £50 per point and your bank was only £100*, you could soon end up in trouble if you copied their trade exactly.

But because it works proportionately, if the trader you’re following risks 5% of their bank on a single trade, then so would you.

If their bank is £10,000, they’d be risking £500 – but with a £100* bank, you’d only be risking £5.

This proportionality is one of my favourite features of social trading, because it means you can start enjoying proper trading profits without becoming over-exposed to risk – and in the unlikely event that things go completely wrong, you can never lose more than is in your starting bank.

On the other hand, as you become more confident – and your trust in your chosen traders grows – you can add more to your account and start enjoying bigger profits.

Of course, profit is a beautiful thing. For most of us, it’s why we got into trading in the first place...

But along with profit, there’s also that inevitable aspect of trading – risk.

Page 9: Social Trading Explained

– 9 –

And I’m sorry to say that risk is part of social trading too.

It’s a simple, unavoidable fact – sometimes, the markets will move against you. Sometimes, you’ll lose out.

And with social trading, the same rule of proportionality applies. That means that if the trader you’re following loses 3% of their bank on a trade, so would you – most of the time.

But one of the great things about this approach is, if a trade is going badly – you DON’T have to wait to close it down.

Although you follow every move your Top Traders make, you can also cancel any currently open trades by hand, and take your profit (or loss) at its current level.

So if a trader you’re following has an open trade on which they’ve lost money – and you’re not confident that it’ll turn around – then you can close that trade early simply by clicking a button that looks like this:

And you can also take the profit from an open trade in exactly the same way.

Of course, a well-balanced portfolio could run – and make you a very decent profit – with minimal or no intervention at all...

But the point is, social trading gives you a lot of flexibility – and you’re never locked into a trade you’ve got no faith in.

In addition to this, the trades that Top Traders make can also have standard Stop Loss and Profit Limit levels, just like conventional spread betting – and this information is clearly displayed along with the open trade ticket which you can see on the following page.

Page 10: Social Trading Explained

– 10 –

So if you were concerned that copying live trades automatically means you might be locked into a trade you want no part of – you needn’t worry.

At the end of the day, it’s your money at stake – and you’re free to leave ANY trade as early as you like.

Of course, the best way to avoid risk is to make sure you’ve selected a great collection of traders to follow in the first place.

In the last section, we looked at the importance of checking their track record, and making sure your portfolio of Top Traders is balanced...

But it’s important to remember that like the markets themselves, their performance isn’t always static or predictable.

For that reason, sometimes you need to get hands-on and make some changes in your portfolio.

Don’t just ignore it and hope for the best. Instead, check on your portfolio from time to time – and be prepared to make changes and substitutions to your line-up if necessary.

Thankfully, this is a quick and easy process – with super-simple search tools and a wide range of filters to help you choose top traders at a glance.

Page 11: Social Trading Explained

– 11 –

In a sense, being a social trader is a bit like being the coach or manager of a sports team. It’s the Top Traders who are out there playing the game – but it’s your job to make sure you’ve picked players who are on good form and complement each other well.

Ultimately, though, the most important thing is to realise that in all trading, some losses are inevitable. Don’t be disheartened or jump ship if things start to go against you...

Instead, focus on the longer term – and make sure your team of top traders is the best they can be.

Although maintaining your portfolio does take some effort, it’s still far less time-consuming than monitoring the markets and seeking out trades yourself – and the skills involved are considerably easier to master.

In a sense, social trading really can offer the best of both worlds...

And for that reason, getting involved with social trading is definitely worth the effort.

You’re always in control – but you have the power and profit-potential of multiple experienced traders behind you.

And by now, you can probably start to see why I’m so excited about it.

Hopefully, you’re excited too...

So right now, I want to round off this report by showing you exactly how you can get started with Social Trading yourself – and how you could claim a bonus of up to £100* when you get started today.

Page 12: Social Trading Explained

– 12 –

GET STARTED

By now, you know the basics of social trading...

And now, you’re eager to get started with it. So where’s the best place to go?

Well, there’s only one social trading network in the UK that I recommend - and that’s Ayondo.

There are a number of reasons why:

First of all, opening an account with Ayondo is free, with no deposit whatsoever required. What’s more, they’ll let you trade with a demo account while you learn the ropes.

Essentially, you won’t have to risk, pay or even deposit a single penny to browse their top traders and get a feel for how it works...

And with Ayondo’s demo account, you’ll even be able to select and manage a portfolio of top traders and check out their performance in real-time – exactly as you would with live trading, but without risking a penny of your cash.

Best of all, when you’re ready to start trading with real money, Ayondo will match the first deposit you make up to a value of £100*.

I must mention, however, that this bonus offer only applies to the first 500 Forex Round-Up readers who open live accounts and email [email protected]

So to make sure you claim the £100* bonus you’re entitled to, click here to open your live account with Ayondo today. Then when you have funded your account, email [email protected] to claim your bonus.

Another reason why I personally recommend Ayondo is the clear and straightforward design of their webpage.

You can sort their top traders by any number of different criteria – including their overall profit/loss ratio, the number of trades they make a month and how many people follow them.

Much of the information is displayed visually, with easy-to-understand graphs and icons – so you can judge Top Traders’ performance at a glance.

Page 13: Social Trading Explained

– 13 –

All of the Top Traders on Ayondo have had their performance scrutinised for at least 6 months and their top-level traders have over 6 years of searchable, recorded trades - so you can judge them with confidence.

And on the subject of confidence, the trades you make on Ayondo are placed through a UK platform which is fully regulated by the Financial Conduct Authority – meaning you can deposit your cash with them in confidence.

What’s more, they make it super-simple to manage your open trades. Here’s what their open trade ticket looks like:

As you can see, your current overall profit/loss level for all open trades is clearly displayed at the top...

And by clicking the button on the top-right that says “Stop execution now” you can close down all open trades and take your profits (or cut your losses) with ease...

And if you’ve got more than one trade open, you can also close them individually by clicking the small red crosses.

Page 14: Social Trading Explained

– 14 –

As well as closing down your trades manually, you can also set your own automatic Loss Protection limits in addition to whichever ones your chosen traders are using.

In short, Ayondo is easy to get started with, easy to use, and 100% committed to keeping your cash safe.

That’s why I recommend them. There’s nobody else operating in the UK that offers this level of service...

So when you’re ready to get started, visit Ayondo and open an account by clicking here or visiting www.tradingbonus.co.uk

Remember: the first 500 Forex Round-Up readers who get on board will have their initial deposit matched – earning a trading bonus of up to £100*...

But to make sure you can claim your bonus, it’s best to open your live account as soon as possible.

Visit Ayondo and open your account today.

Then when you have funded your account, email [email protected] to claim your bonus.

IN CONCLUSION

At this point, I’m sure you can see why I reckon social trading is set to explode in the UK over the coming weeks, months and years.

In contrast to so many approaches to trading, it’s highly transparent – meaning you can cut through the unrealistic promises and selective sales-speak and judge each trader on their own merits.

But in spite of all the information available to you, social trading networks like Ayondo make it simple to filter through it and make smart decisions – even if you’re not an expert trader yourself.

I’m already using it myself with a small bank – and I’ll be certain to keep Forex Round-Up readers informed of how I’m getting along...

And today, I highly recommend that you get on board, open up a demo account and check it out for yourself.

Playing around with the platform is the best way to get a feel for it – and with a demo account, you can enjoy the full social trading experience without risking a single penny of your cash.

Of course, by opening a live account, you can grab a bonus of up to £100* on your first deposit...

Page 15: Social Trading Explained

– 15 –

So get on board here, and claim your deposit bonus today.

And when you do go live, do make sure you let me know how you’re getting along...

I know that I – and other Forex Round-Up readers – will be keen to hear your experiences.

So if you’d like to let me know how you’re getting on, or if you’ve got any further questions about how this works, you can email me at [email protected]

But for now, I think I’ve covered just about everything...

And so all that remains is for me to wish you the very best of luck with your social trading.

Best wishes,

Frank Hemsley Managing Editor, Forex Round-Up

IMPORTANT INFORMATION

Spread betting carries a high level of risk to your capital. Prices can move rapidly against you and resulting losses may be more than your original stake or deposit. Margin amounts vary between spread betting companies and the type of markets spread bet.

Past performance and forecasts are not reliable indicators of future results. Spread betting is not suitable for everyone - ensure you fully understand the risks involved and never risk more than you can afford to lose. Commissions, fees and other charges can reduce returns from investments. Tax treatment depends on individual circumstances and may be subject to change in the future.

Always seek personal advice if you are unsure about the suitability of any investment. No responsibility for loss occasioned to any person of corporate body acting or refraining to act as a result of reading material in this report can be accepted by the publisher, the Author, or any employees or agents of either. It is up to the reader to ensure than any trade or trades he/she places, if any give effect to his or her wishes.

Fleet Street Publications Limited, which is in the same group of companies as Agora Lifestyles Limited, receives commissions from ayondo Markets. ayondo markets Ltd. is a company registered in England and Wales under register number 08248081. ayondo markets Ltd. (FRN 591040) is an Appointed Representative of Gekko Global Markets Ltd. Gekko Global Markets Ltd. is authorised and regulated by the Financial Conduct Authority, FCA Register number 184333.

* To qualify for the exclusive sign up bonus offer outlined in this report you need to open a new account with ayondo markets with a minimum deposit of £/€100 before the 27th June 2014. The first 500 new account holders to email [email protected] will be credited with £/€100. This offer is only available to customers who process their application through links within this report or via: www.tradingbonus.co.uk

* The £/€100 may only be withdrawn once 1000 trades have been completed. If you withdraw or partially withdraw your initial deposit before the bonus is cleared, we will remove your bonus in proportion to your withdrawal. For full terms and conditions visit: http://www.shortspreads.com/en/legal/offers/2013-10-account-opening

Forex Round-Up is published by Agora Lifestyles Limited. Registered office: Curzon House, 24 High Street, Banstead, Surrey, SM7 2LJ. Registered in England No. 3303666. VAT No. GB 629 7287 94.

© Copyright 2013 Agora Lifestyles Limited. All rights reserved. No part of this report may be reproduced by any means of for any reason without the consent of the publisher.