Social Trading: Which Investors Should You Follow?

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Social trading is a great way to get started with investing, but choosing the right traders to follow is no easy business. While good traders can be found on every social trading platform, it can be hard to spot them among a crowd of users with less-developed bankroll management skills and high-risk trading strategies. 

For new social traders, it's necessary to do a bit of in-depth analysis in order to identify signal providers who're a good fit. Here's what to look out for. 

One of the easiest ways to spot a good signal provider is to check how many followers they have. On most social trading platforms it's possible to dig down not only into how many people are copying an individual's trades, but also how many followers their profile has overall. A large number of followers is a signal that an investor knows what he or she is doing, and makes as good a place as any to start. 

Another important stat to check is how many copiers a user has. As a rule, if they have very few copiers and followers, it might be hard to trust them. But bear in mind, the most copied traders aren't always the best either. For example, some may have just used questionable methods to boost their popularity, such as by manually copying other traders or by creating multiple accounts and sticking with the one that, by chance, made a profit. 

Perhaps the best indicator of a trader's popularity is the amount of money that's invested in them. 

Platforms such as NAGA Trader, for example, provide really detailed stats that provide a breakdown of how much money a specific investor has been trusted with by other users.