The idea of a Forex trading network is - you can simply pick traders that are doing well and then, link your account to theirs and benefit from the profits they make on their trading signals.
The Growth Of Forex Trading Networks
Etoro claims to have the biggest network and the figure I saw was around 1.5 million people using it which is a huge number of traders. The broker has always prided itself, on offering an easy platform for beginners to use and the social side of trading is a logical progression of this philosophy.
Another big network is provided by FXOpen and FX Stat which is a free trading analytics platform and allows traders to get access to a host of trading tools and study and follow other traders.
The Zulu platform is another social Forex network which has seen huge growth and the figures are huge Founded in 2006, ZuluTrade is a fully automated Forex trading platform which you can trade from your own broker. The platform has in excess of a $100 Million in deposits being traded in the markets and its continually growing.
InterbankFX (IBFX) have an FX trading social network called IBFXConnect and again it allows traders to follow others and consult them for trading advice. You don't even need to be a client, all you need to do is to have metatrader 4 platform and you can join the network for free without having even having to deposit funds.
The above are just 4 of the biggest and most popular but there are more coming online all the time.
Which is the Best Forex Trading Network?
The best way to decide is simply to join and follow and will IBFX you can follow without a trading account the others will give you access via a demo account so try them all out.
This area of Forex trading is growing at a very quick rate but is it a good way to for beginners to seek profits in the Forex market?
I must admit to being bemused at the growth and popularity of these networks and the reasons are:
95% of traders lose money and only 5% win. Trading is a personal experience where you have to have confidence in what your doing to trade with discipline and it's a known fact that m ost traders can't follow trading systems with discipline, unless they know how they work – as soon as a trader starts to feel draw down periods he quits.
Of course you see the best trading signals at the top of the list but how many go from top to bottom and have big drawdowns? Follow a few and you will see what I mean. In addition, as the networks are quiet new. Performance statistics on many platforms don't go back very far and to judge any trader, you need to see a track record over 3 years plus not six months to a year.
Another key fact and this applies to even the best Forex traders or trading systems is if a trader is on a winning streak, for a few weeks or months, he will probably have a sharp drawdown after ( which is of course common after a big wining run) so if you follow a trader who has had a good run, you could be joining the trading signals just before they have a sharp drawdown!
These networks may be popular but 95% of deposits in Forex trading are taken by the market and that only leaves 5% which are going to make money. Following others is not a way to make money trading currencies, trading is a personal experience and any successful trader will tell you this. Of course, FX brokers make big money from these networks but for me, there simply for people who are lazy and looking to get rich without effort and I bet very few traders who join these networks end up making money long term.
If you want to win at Forex trading, devise your own trading strategy and trade it with, confidence and discipline and in my view, you will have a much better chance of winning than following other traders.