Both social trading and copy trading refer to a specific investing strategy where beginner investors have a chance to observe and/or follow a professional trader. The idea behind these two approaches is to deliver a more flexible and hands-off experience to those who do not have enough background or a well-established trading strategy.

Social trading tools and copy trading introduce two methods that look the same with many things in common, but they are different. In this article, we are going to figure out how both of these methodologies work and along with the crucial differences and benefits that make one method a better alternative to another one.
Social Trading Explained to Beginners
When you enter a social trading platform, you will find a combination of different features, approaches, tools, and social trading apps that make it possible to do the following:
- Follow and observe other traders.
- Monitor their stats and track record.
- Get notifications every time an order is executed.
- Communicate with other traders within the social environment.
The main focus here is on collaboration, which means you are also supposed to contribute to the overall success. This fact suggests you already have some skills and knowledge or have at least decided on the trading strategy to apply.
To collaborate with other participants, platforms usually provide such social trading tools as market-specific walls, chatrooms, and other public environments to engage, discuss, and decide whether to follow a trader or not. As a result, social trading can be a good solution to pick up some new techniques or learn some insights from the financial community.
Social Trading Pros
- A good way to start learning and practicing.
- Access to the comprehensive knowledgebase.
- Collaboration opportunities with a focus on a social community.
Social Trading Cons
- Requires more time for research and learning.
- Simple to miss a perfect trading opportunity or hot order.
- Does not provide the full picture of a trader to follow.