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04.06.2018 By SociumTrade 194 views

How to assess a trader

The SociumTrade instrument kit allows you not only to work on the platform on your own, but also to back other traders. Today we will tell you how to identify the best traders.

Remember that you will be able to view traders’ profiles on the platform and filter them by different criteria. You could start with the traders whose strategies will be open, and then proceed to select the assets that you will be interested in being exposed to. You will also be able to add other filters such as risk and profitability. The rest could be sorted according to their rating. Then the most interesting part will start - viewing profiles of the selected traders.

You should pay attention to:

  1. Experience and skills - including those confirmed by other users. The more reviews and positive feedback a trader will have, the better.
  2. Social activity. Look at what a trader writes, how informative his/her posts are, what his/her interests are, and where he/she participates. Also take note of how many friends and followers a trader has. This information will not always reflect the professional level of a trader, but still it, could help.
  3. What percentage of own funds a trader uses in his/her strategies. The more of his/her own funds a trader will be employing in trading, the better. It will reduce the chance of the trader being careless with the portfolio, because he/she will also risk his/her own capital.
  4. How do the trader’s words expressed through social tools coincide with his/her actions. It will not be a good sign if a trader writes that it is time to buy, while he/she is selling, or when he/she recommends to invest in gold while purchasing silver.
  5. Stable profits. Though this is the most obvious criterion, it is one of the most crucial one. Make sure a trader is consistently profitable.
  6. The ratio of a trader’s performance to the market. A trader’s losses do not always mean a lack of skill. If the market plunged by 20% and a trader loses 5%, it actually means the trader did a good job and his/her strategy can be trusted. Make sure that an adequate benchmark is used.

We also recommend you to keep track of a chosen trader’s activity for some time, especially if you plan to invest a large sum. This way, you will be able to carry out a more comprehensive analysis with reliable data.