A growing number of people face the opportunity to trade in an attempt to boost their income. While some people are professional traders who make a living from it, others are trading just for fun. Regardless of whether you are a professional or rookie trader, one thing is for sure – everyone hopes to earn extra cash through trading.

Professional investors know the ins and outs of trading. You can find numerous trading tips and guides on the Internet, which does not mean that all of them will work for you. Choosing the right trading strategy for you is the key to your success.

However, it is not as simple as it may sound to be, especially if you are making your first steps in the world of trading. Hence, many inexperienced traders prefer learning from their experienced peers and even copy trades executed by professional investors. This raises the question of whether social and copy trading are interchangeable terms.

Introduction to Social Trading

Social trading is designed to help amateur traders master their skills. The idea behind social trading leans on the knowledge of experienced investors who share their operations and opinions with newbies through a special platform similar to a social network. It allows investors of all skill levels to interact with each other and share strategies and technical analysis. In a nutshell, we can say that social trading is all about learning through examples and exchanging trading-related information.

Apart from being easy, social trading comes with yet another worthwhile advantage – it helps traders to see changing activity on the market from different perspectives. Often, investors who are not in a community make bad decisions when losing positions. But when traders work hand in hand, they are able to discuss and analyze the changes on the market from different perspectives. According to a report published on TradingPedia.com, social trading relies on the free flow of information on the network.

Social trading sounds great but it does not come without any disadvantages. The first and foremost downside of social trading is the possibility of sharing wrong information. In addition, it is challenging to select a consistently successful trader. It is also worth mentioning that for many inexperienced traders, it is difficult to select the right social platform.

What is Copy Trading

Even though many people use social trading and copy trading as synonyms, these terms are not interchangeable. Social trading is a broad term that includes not only copy trading but also other aspects. As its name suggests, copy trading allows investors to automatically copy positions opened by other traders. Investors select traders whose operations are successful and copy their trading moves.

The main advantage of copy trading is the possibility to duplicate the trades of successful investors who have in-depth knowledge of the market. Furthermore, copy traders do not have to follow the market as they rely on professional traders’ activity.


Despite its advantages, copy trading is not an ideal strategy. Many industry insiders believe that copy trading makes investors who are at the beginning of their career lazy. Many of them do not understand the strategy behind the positions opened by the selected professional trader. This, on the other hand, is a major obstacle to learning the ropes of trading. What is more, if you copy a losing trading position, you will lose either.

What Is the Difference Between Copy Trading and Social Trading?

 As we already mentioned above, copy trading is a branch of social trading. Social trading does not stand for copy trading and vice versa. Social trading and copy trading explained in brief: social trading allows investors to learn from each other but they can make decisions regarding the trades they intend to open. Copy trading does not allow investors to control their positions, but blindly rely on the trading activity of prominent investors.

 Not every type of social trading is copy trading simply because you do not let someone else manage your trades automatically. Social trading allows you to use the information from other traders, so that you can base your decision on it. But in the end, you are the one who is making the decision.