Tips & Tutorials -
7 tips for following traders on TradeHero
Besides the increase in information shared among users of social trading platforms, the biggest advantage for users of social trading platforms is the ability to follow another user and mimic the trades he makes.
On TradeHero, these users with followers are aptly named Heroes. They can help new and less experienced users learn the ropes by providing alerts and stock tips.
Using our proprietary ranking algorithm, the “Hero Quotient”, we are able to find the best Heroes based on a unique set of trading metrics.
Following the Heroes at the top of each leaderboards or the “Most Skilled” Heroes is by no means the easiest way to a profitable portfolio in the long run. Here are 7 tips to selecting your next Hero.
1. Browse rankings on leader boards
A good place to start is by searching on the leaderboards based on our Hero Quotient. Besides looking for heroes who are providing good returns, find traders that suit your needs based on the hero’s risk tolerance and gains achieved.
2. Consider the Hero’s trading history
A Hero who has consistently performed over longer periods is likely to be more valuable as he would have a proven record of adjusting and adapting to different market conditions.
3. Look at the Hero’s past performance
Trends in the Hero’s past trades will help you gauge the consistency of his trades. A hero that is profitable on the platform and trades regularly is more likely to be a consistent trader as compared to one who whose profits come from a few irregular trades.
4. Find Heroes with good risk/profit ratio
Experienced and good traders have a good money management system. On average they do not risk more than 2% of their trading capital on a single trade. Disciplined traders know when to cut their losses or take profits from each trade.
5. Heroes with followers
Looking at the number of followers a Hero has is a good gauge of how well the hero performs. This is a key advantage of a social trading network as it allows you to benefit from what other investors are thinking and doing. However, this should not be the only factor of consideration when selecting a Hero.
6. Heroes’ Communication
Heroes who communicate with their followers regularly about their strategy and market views are more likely to be following the markets closely. They will be able to react and adjust their strategies when faced with new market conditions.
7. List the 10 potential heroes to follow
Select a proportional mix of traders with low, medium or high risk according to your trading strategy. It helps you create a more balanced portfolio. This will help you when one or two traders are underperforming.
One of the biggest mistakes we see users make is not understanding the relationship between signal providers and trading strategies. For example, users are attracted to traders with 90% winning trades. All they can see is easy and quick profit. But they do not know that the strategy includes a huge risk and when trends go against them, these users might just leave massive open positions in the red.
Knowing when to cut your losses is the best skill any trader can have. The same rules apply when it comes to following a Hero. If a Hero is underperforming, not communicating well with followers or taking bigger risks than usual, you should consider these as signs to drop these Heroes.