Expectations in Social Trading
Before proceeding to the conclusion of this course on Social Tradidng and beginning the next one, we need to spend some words about factors like time, resources and expectations.
Many investors wonder what the timings are when it comes to investing their money with Social Trading.
On one hand, an investor could easily take his money, give it to someone else to handle it, pay him, and then wait, with all the risks and low returns that follow. This method, which is the classic one, would require a minimum investment in terms of time.
Or, on the other hand, you can choose to invest a bit of your time for a while, learning how to invest on your own, and how you do it via Social Trading.
This method will definitely take more time, but on the other side you’ll never lose the total control over your money, and you’ll have access to potential returnes beyond compare.
How long does it take to learn Social Trading?
A how much time it takes to be able to start operating successfully depends on you.
For sure there is a fact. By arriving on Investingoal, by following our courses, and then by getting the Investing GOLD Membership, you are drastically reducing the time needed for your education. To start with no educational material exposes you to the dangers of highly risky choices, dictated simply by your lack of knowledge of the topics.
By starting alone, you would need to learn by doing experiences. From one point of view, it’s a great thing, but unfortunately here there’s your money involved, and risking them to make experience would make no sense. Starting with Investingoal instead allows you to have, from the very beginning, all the basic knowledge you need to start safely, excluding the risk of threatening immediately your capital with very risky choices, dictated by the total lack of experience.
In addition, all your following experiences will have a different and greater value, because, thanks to your solid base knowledge, you’ll be able to contextualize them in a much more organized and useful manner for your field education.
Making mistakes is normal, it happens to everyone, even after years of experience. The important thing is that an error never has to put at risk your account stability and your resources, and that from that mistake you can really learn something.
The knowledge you’ll get with Investingoal has been precisely designed for this.
How long to succeed?
In reference to the time factor, there’s another important issue to deal with. And it’s about how long it takes to be able to make money.
Here too it can be personal and it depends largely on the type of strategy you have decided to pursue. If you have a Long Term Strategy, you cannot expect to see results after only one month. But even if you have designed a Short Term strategy, thinking you can get great results after just two weeks will put you in a dangerous situation.
As said before, we are talking about investment, not about betting or gambling. If you want to double your capital on a night, I suggest you to try the casino roulette. For sure you will have more chances, and it will take much less time, in the sense that, within a single evening, you will know right away if you have doubled your capital, or if, more likely, you will have lost it miserably. This can also be a method for saving time, perhaps not very intelligent.
All good things take time and care, the art of investing especially.
Both when you study or when you set up your portfolio, take your time, do not rush. Think hard about all the possible variants, about all the possible problems, do a brainstorm of everything that can be connected to your strategy, pros and cons, best and worst moments, timing, and above all the rules that your Signal Provider shall comply with, penalty a Lot Size reduction or the total disconnection.
Investing means to be patient
Once you’ve done all this, the hardest part of an investor’s psychology is called into question: the ability to be patient and to wait.
It takes time for your diversified investment portfolio to work. If, on one hand, to see your capital status whenever you want is a great thing, on the other hand it may also create a possible stress.
Imagine you set a long-term strategy. As mentioned above, it may take months to see the results. If you cannot stay calm and you frantically checks your account several times a day, I assure you that you will suffer some kind of stress and dissatisfaction.
If the conditions and motivations that have led you to choose certain Signal Provider, and to assign certain values, are still valid after weeks or months of no profit, then it might mean that your mind is starting to suffer the passage of time.
When you begin to feel this discomfort you must be very careful with the actions you’ll decide to take, because if you decide to change strategy at once, you will risk to lose the moment when you would have finally begun to realize the long-awaited profits.
I can assure you, there’s no worse anger and frustration than the regret of not being able to wait a little bit longer, and having lost the chance to realize what was about to come true.
On the other hand, if your strategy conditions should disappear according to the rules that you have placed at the beginning, then you should act without hesitation. This is the flip side, stand still and don’t take decisions out of fear of change is what in psychology is called “maintaining the status quo“.
This calls for clear rules established at the beginning, for not having doubts about what you should do. The ability of a good follower investor is precisely this, to set rules not too hard and not too lascivious, so that he can move wisely into the possible scenarios, and especially so that he can respect them.
The first year
In principle, however, if the follower investor have properly studied all the arguments, have taken all the time to proceed with all transactions in these courses, and have checked the accuracy of all its settings, assuming his Signal Providers will do their duty without making mistakes along the way, then the minimum time to leave the portfolio working before making considerations will be of at least 6 months, but much better a year.
These are the minimum timescales for your thoughts and feedback on performance to be reliable.
Always taking a Long Term strategy as example, it would make no sense to complain about the performance after only 5 months, knowing how these strategies work. Evaluations of this kind are not so much logical, for the simple fact that it has not been left enough time to the portfolio to show its real potential, or perhaps also to reveal its real problems or deficiencies.
For both, the right time is needed. Otherwise you are not acting in a sensible way, but only by making decisions based on emotionalism, which is very destructive in the investing world.
To reiterate, this doesn’t mean that if a Signal Provider betrays his own strategy, or you see that losses are endangering your account, you still have to wait 6 months before taking any action. The rules you have set at the beginning answer just to that: to understand when and why you need to take action out of the ordinary.
The initial capital
We must now consider arguments of a monetary nature.
Another question that many people ask is “with how much money should I start?“. By now you should know, these are all relative topics which may vary from person to person. However, we can make some general observations.
With Social Trading, thanks to the financial leverage, you can start with just a few hundred dollars. With Zulutrade precisely 250 usd, with eToro even 50 usd. On one hand this aspect is great because it allows the access to this investment tool really to everyone. On the other hand, however, as usual, it can be cause of risk.
Starting with such a small amounts of money can cause frustration. The percentage of returns that can be obtained are the same as those obtainable with large capital, but it’s obvious that the 50% of $ 300 is very different from the 50% to $ 30,000.
To obtain a 50% a year, but even more as we will see, is an obtainable result with Social Trading, but what this 50% represents in monetary terms depends only on your initial investment. Having a too small capital can cause a certain level of frustration, which then can bring you to take bad decisions, the worst of which to increase the exposure and the lot size, for trying to increase profits.
As you know, this increases also and above all the losses, and therefore the entire risk related to your portfolio. In addition, with a small capital you may not have enough coverage, in terms of margin, in order to follow more Signal Providers with safety parameters.
To have a good starting capital allows you to obtain significant results, which will enable you to live in peace the evolution of your investment, and above all, not to take any unnecessary risk caused by the impatience of getting immediately substantial profits.
As a general rule, you should always invest a sum you won’t have trouble if lost, and that would not ever jeopardize your financial security and financial stability. But at the same time, you should make sure that this sum is as large as possible.
Much better to save money the necessary period while studying and you practicing on paper, rather than starting with the little you have, running all the above risks. Or, you can always start with small amounts, but with plans to pour new money whenever possible, as explained in this lesson of the Investing For Dummies course.
How much can you earn?
Finally, we arrived at the last topic, for sure one of major interest.
“How much can I earn with Social Trading?”.
Among those we set ourselves so far, this is certainly the most personal and relevant question of them all.
Obviously, we want to try to think about how much you can earn “at maximum” with Social Trading, what are the major percentage of return obtainable. This is not an easy question to answer. The reason is simple.
The decisions on what lot size to use are taken by you, so how much to earn it’s your choice, but as you know, when you choose, you do it also on the related risks. You can even design to achieve the 500% return in a year, you can do it, the tools are at your disposal. But, either you have found truly exceptional Signal Providers, ultra-profitable, and above all ultra-safe strategies (in that case, please tell us who are they 🙂 ), or if, most likely, you have not, you’re risking too much.
How much you can earn should always depend on how much you are risking, and in order to minimize the risks and maximize your profits you have to be especially good at finding the suitable Signal Provider and professionally building your strategy.
We have already shown you that the Retail Forex or CFDs Traders can get great returns on their capital, then it means you can do it too. The important thing is to know how to handle this huge potential and not get burned.
Your expectations with Social Trading can be very high, but please try not to overdo. I won’t give you limits on what return you can get, because it would not make sense. You can aim at anything you want.
However, I want to be sure you are aware that every goal always hides potential risks for your capital preservation, risks that you must be able to identify, analyze and control. If this has been done, and these risks are acceptable, or they are not, but you still decide to run them knowing what the consequences may be, then go right ahead.
I wish you always, and in any case, good luck and good investment.
This being said, we always recommend to not overdo. As you will see very soon, with Social Trading you can get good returns on capital, not accessible by other classic investment method, still maintaining the risks moderated.
Do you want to increase the money you earn? Pours more capital and thus increases the base on which the portfolio is working, keeping the same rate of risk exposure.
This is true investing.
SOCIAL TRADING COURSE
The Key Players
The signals replication process
Being a Signal Provider
Being a Follower
Signal Providers characteristics
Signal Provider categories
The Risk factor
Equity Line and Drawdown
Money Management principles
Ready, set, go! Invest!