Perhaps you have never heard of high frequency trading, or perhaps not with that term, and yet it is one of the most widely used methods of investing in the stock market today.
That is why we propose you to discover here some explanations about this form of speculation, its operation and the advantages and disadvantages of this alternative method.
How High Frequency Trading Works
If the term “high-frequency trading” doesn’t mean anything to you, then the term “automatic trading” certainly sounds more familiar. These two terms define the same principle, a trading method that uses an automated program.
This type of program is based on an algorithm that aims to perform technical analysis of live quotes to determine the best positions to take in the short term. The calculation is therefore carried out automatically and taking into account specific and mathematical criteria only, which ensures a very high reliability of analysis.
Formerly intended for investment firms and professional traders, the technologies used for high frequency trading are now available to all through online trading platforms.
Advantages and disadvantages of high frequency trading
As we have just explained, high-frequency trading has the important advantage of performing live technical analysis from stock market charts, with significant reliability and without human intervention. However, basing an investment strategy on a simple technical analysis is not a guarantee of profitability, on the contrary. That is the main drawback of high frequency trading.
Indeed, these programmes do not take account of market developments and fundamental analysis, which nevertheless has a major impact on the stock market price of assets. Only a human being with sensitivity and a sense of anticipation can foresee the reaction of investors to various announcements.
An alternative to high frequency trading: social trading!
Fortunately there is an alternative to high frequency trading with some of the advantages but without the disadvantages: social trading.
This type of speculation is not based on machines, but on real traders, and proposes you to automatically copy the positions taken by the best investors of a specific platform. You will then be able to take advantage of their experience and expertise and begin to make a profit without having any knowledge of the stock markets or their functioning.
Social trading is also a good way to learn how to make your own strategies by studying the behavior of the traders you have chosen to follow and copy.
Using social trading as a method of investment
As we have seen, social trading is a good alternative to high frequency trading. Start experiencing it right now by joining a quality trading platform that offers this functionality.
You may have already heard about the Zulutrade social trading platform proposed by AvaTrade and are wondering how it works and whether it is really interesting or practical.
In that case, I’m sure you’ll be interested in the following article.
Thanks to some explanations you will be able to discover the functioning of this specific platform as well as our opinion on the functionalities that are proposed in it.
Trade without previous knowledge thanks to Zulutrade
Forex users are already familiar with the Zulutrade principle, as other brokers have already established it, such as eToro, which pioneered social trading in Forex. It is actually a form of automated social trading accessible even to beginners.
In fact, it is enough to select the traders registered on this platform and who seem more competent to you to have their positions automatically taken in parallel to yours. Of course, and to help you identify the most interesting traders, i.e. those who are most profitable, Zulutrade gives you access to an automated classification of your performance, called zulurank.
In addition to the selection of traders, you can also determine the level of risk you wish to take and which the platform will automatically take into account.
How to use ZuluTrade with an AvaTrade broker
To use the Zulutrade social trading platform, you just need to open an online trading account with an AvaTrade broker. A setup wizard will then show you how to access this functionality and how to quickly select the most profitable traders to copy your positions live.
Of course, you will have the possibility to modify the list of traders you follow at any time to further improve your profitability.
In addition to these features, AvaTrade provides ZuluTrade users with useful tools to control risk through a global risk indicator, but also advanced parameters that will allow them to determine a different level of risk for each trader.
Advantages of using the Zulutrade social trading platform
To sum up, the Zulutrade social trading platform allows you to:
start trading Forex without prior knowledge;
enjoy one of the largest social trading platforms with more than 70 thousand traders worldwide;
determine your risk level for each trader you follow;
access your account to manage it from the online platform or from a mobile device;
maintain full control of your trading account and learn how to establish effective strategies as well as being profitable;
How to join the Zulutrade platform
To join the Zulutrade social trading platform now, simply sign up for this broker and create an online trading account.