Best social trading apps

Clare says

eToro has made its name as the home of social trading. It’s often imitated but, so far, no-one has better it, particularly where copy-trading is concerned.

The platform is known for its pioneering social features, and making the financial market more friendly and accessible to new and aspiring traders – which it definitely has done.

You don’t have to be an experienced trader to get started with eToro. The brilliant eToro Academy has a wealth of learning materials and the user interface is very easy to get to grips with. In many ways, it is more like navigating a social media platform than a trading platform. There is a danger there, though. With its gamified features, it could be easy to forget that investing is risky. Trading CFDs is incredibly risky. 51% of retail investor accounts lose money when trading CFDs with this eToro. So tread carefully.

With eToro’s free copy-trading feature, however, users can mirror the exact trades of more experienced investors and mimic their strategy within their own portfolio. Our research into the performance of eToro’s Smart Portfolios shows that some accounts have historically provided excellent returns on investment. However, those accounts that have produced the highest rewards are also most often the accounts exposing copy-traders to the highest levels of risk. You must be comfortable with the level of risk you are being exposed to when trading or copy-trading.

Always remember that the insights and tips found on platform social feeds are not equivalent to advice from a qualified financial adviser. So while the wisdom of the crowd is a powerful tool, it shouldn’t be entirely relied upon when making decisions. The value of your investments can go down as well as up, and past performance does not guarantee future performance.

Alternatively, if you a trader with a history of success, you can opt to allow copy-traders to piggy-back onto your strategy and receive payment and perks for doing so.

Joining the Popular Investor Programme you could earn you commission of up to $500 per month, or, for the ultra-successful ‘Elite Pros’, 1.5% of assets being copied, up to $30M per annum.

Fees

• No-fee copy-trading
• 0% commission on stocks
• No management fees on A ready-made portfolio is a pre-made collection of investments that have been put together by investment experts. They are designed to be a simple option for those who don’t want to choose individual stocks or funds for themselves.ready-made portfolios
• Very high 1.5% FX fees at top end
• $5 withdrawal fee
• Minimum deposit: $50 (Smart Portfolios min is $500, CopyTrader minimum is $200)
• FX fees reduced with increasing size of portfolio
• FX fees eradicated when you hold £250k+

Copy-trading-specific information

• The minimum amount you can invest in an eToro trader is $200
• The maximum amount of traders you can copy simultaneously is 100
• The maximum amount you can invest in one trader is $2,000,000
• The minimum amount for each copied position is $1

Use this platform if

• Social trading is really important to you and want to join the biggest and most developed social trading platform
• You want to copy the trades of more successful traders without having to pay commission
• You are new to trading or relatively inexperienced
• If you copy-trade, then you must be comfortable with the level of risk your trader is exposing you to

Clare says

Trading 212’s social trading features aren’t as developed as eToro’s just yet. However, there are some advantages to using T212 over eToro in other areas, so if social trading isn’t the be-all-and-end-all to you, you can still combine some nice social trading features in T212 with a platform that generally offers lower cost trading than eToro.

T212 offers access to its very active community forum where you can ask your questions, gain inspiration and wisdom from the crowd, and make requests for new features or stocks to the T212 team.

The forum has been going for a few years, so there’s a wealth of resources and answers to pretty much any question you’re likely to have about the platform.

There’s also a social feed within the platform. You can customise your social feed to include content on the companies, asset types and sectors that interest you, and you can join specific communities. This is more like your average social network feed than a traditional forum.

Remember that tips, insights and ideas gained from a community forum do not constitute regulated, professional financial advice. You should consult an independent, qualified financial adviser if you are unsure what investment strategy could be right for your specific circumstances, goals and tolerance to risk.

There is also a version of copy-trading on T212. It’s nowhere near as comprehensive and developed as eToro’s copy-trading function yet, however. ‘Community pies’ allows T212 traders to pick a portfolio and copy it. It’s only for Invest and Sometimes called an investment ISA, a stocks and shares ISA is an individual savings account that allows you to invest in shares, unit trusts, investment funds, and bonds. You will not need to pay tax on any income or capital gains earned on investments within an ISAISA customers though – there’s no CFD copy-trading.

To help you make an informed decision about whether it’s right for your investing strategy, there’s data on the composition of the portfolio/pie, the number of copy-traders who are onboard, AAR data, and community chat. My criticism, however, is that this is nowhere near enough data for me to assess whether this is a pie I should be copying. For that reason, I’d be far more wary of hitching my wagons to a Community pie’ than to one of eToro’s copy-traders, where far more data is available on past performance, risk levels and trading records.

You also won’t be able to monetise people copying your pie in the same way that you can monetise your copy-trade account on eToro.

Fees

• Zero commission
• Zero custody fees
• Zero-fee ISA
• Highest rate of interest on uninvested cash – 5.2%
• Low stock trading FX fees – 0.15%
• Low spreads
• Free copy-trading through Community Pies
• No payment for being a copied trader (unlike eToro)
• FX fees for trading CFDs are relatively high – 0.50%

Use this platform if

• You want low-cost trading and you’re a beginner or intermediate level trader
• You like the feel of the T212 platform
• If you copy-trade, you must be comfortable with the level of risk that the trader you are copying is exposing you to

Clare says:

Although not strictly speaking a social trading app as it doesn’t include any in-app social feeds or copy-trading features, Freetrade does offer a popular community forum where traders can exchange ideas and connect with each other.

With 316k posts and more than 16k sign-ups, it’s a good place to get answers to your questions, read tips and commentary from other traders, and make suggestions for new features and stock listings to the various members of Freetrade management who act as admins.

Community forums allow you to gain insight into market sentiment – that is, the mood of financial market participants, and a picture of what is being traded and when.

IG similarly offers a well-liked community forum, but IG is better suited to more experienced traders wanting access to more sophisticated research and trading tools, and a wider variety of assets.

It should be noted that you don’t need to be a Freetrade customer to use the Freetrade community forum, but some topics focus on features of the platform itself.

Fees

• Freetrade operates a Freemium business model so although there’s a free basic account which offers free access to a general trading account, you must pay for extra features and access Sometimes called an investment ISA, a stocks and shares ISA is an individual savings account that allows you to invest in shares, unit trusts, investment funds, and bonds. You will not need to pay tax on any income or capital gains earned on investments within an ISAISAs or A self-invested personal pension (SIPP) is a type of private pension that allows you to control the specific investments that make up your pension fundSIPPs
• Commission free trading
• Account minimum: £1
• FX fees high for Basic account users – 0.99%
• FX fees reduce for paid account users, dropping to 0.39% with a Plus account

Use this platform if

• You’re a beginner and want a really great looking, entry-level app for trading stocks and ETFs
• You’re prepared to accept slightly higher costs than Trading 212 and possibly eToro for the first-class design and simplicity of the app
• You’re not interested in trading more complex instruments such as CFDs – only stocks and ETFs
• You’re not bothered about copy-trading (Freetrade does not offer this feature