How social trading revolutionises prop traders recruitment

TopTradr is such an app, looking to disrupt traditional trading in a simple yet powerful way. So, Real Business talked to serial entrepreneur James Olden about how TopTradr is set to break down the high barriers of entry for becoming a professional trader and the introduction of a social dimension to the world of FX trading at a time when the world seems to be going app and social network mad.

Recent investment trends have showed that social trading, especially within the FX industry, has become increasingly popular with more and more traders, as well as aspiring ones, embracing social media in the context of trading. 

Genuine trading v Mirror (copy) trading

Recently, there’s been a lot of buzz around mirror trading, especially as there is an expectation that regulators may take action in the near future. Should this happen, as the market stands today, TopTradr would be one of few trading apps not to allow the practice. 

One of the reasons why mirror trading has become so popular is the belief that, at a novice or retail level, it helps overcome the barriers to successful trading. The premise is that everyone benefits if the mirrored trading is successful, which is unfortunately far from reality, as it is often only the mirrored trader who gains. There is also an issue of credibility, how do you know that the ‘guru’ you are copying has a much better knowledge of the markets than you do? Without independent verification, it’s impossible to tell, resulting in the danger of users blindly following other traders’ strategies rather than to form their own decisions.

As TopTradr is all about finding talent and discovering and rewarding those who are promising traders, the model simply does not need copy trading; even more so as TopTradr encourage users to make their own decisions as they compete to win up to $3,750 every week, in addition to the equivalent of a $37,500 hedge fund to manage for the highest ranked trader as well as the help to get noticed as a serious Prop Trader.

Discovering Talent

At the heart of the TopTradr offering is a proprietary algorithm which ranks traders based on their trading performance. Rather than just focusing on total return, TopTradr takes into account consistency and risk reward ratio. The algorithm then returns a TopTradr score, allowing users to instantly compare the performance of fellow TopTradr traders.

Kelly Tonkin, chief investment officer at Penrich Capital commented: “In terms of social trading, risk management remains crucial. That’s why a social trading platform like TopTradr that promotes risk responsible behaviour is so important. Everyone should bring something different to the table. That’s part of the value in TopTradr, you’re bringing together traders from all over the world, with different kinds of knowledge and giving them a platform to discuss and debate that knowledge.”

“Starting out in trading now is very different from when I did. I can’t imagine being a young trader, and having networks like TopTradr that allow you to expose your trading skills to potential investors. There are some really good young traders waiting to be found and it’s exciting to see these new avenues that will allow them to come up. I think the traders just starting out should take full advantage of that. “

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