Social Trading Platforms for USA Residents

Social Trading for USA Residents

Background:

If you’re a resident of the United States and you’ve been looking for a social trading network or platform to join you’ve likely come across the following message many times: “I’m sorry but at the moment we cannot accept customer from the USA.” Or if they do, the service offering you get access too is restricted compared to non US customers.

The reason for this is that the US government passed a law called the Dodd-Frank Act. Aimed at avoided another financial crisis the law puts many restrictions on banks in terms of the investments they can make and basically terminated currency trading in the USA. They key restrictions impacting social and copy trading are:

  • No hedging of trades, i.e. you cannot have a trade in the same instrument open in 2 opposite directions (BUY and SELL). So while most traders you might copy on social trading platforms don’t hedge themselves, this restriction becomes a problem if you copy more than one trader and they both open for example a EURUSD position in different directions.
  • First In First Out (FIFO) trades rule. While it is possible to have multiple trades open of the same pair in the same direction, they must however be closed in the order they are opened. Plenty of traders and trading systems do open multiple trades in the same direction, and they don’t necessarily close them on a FIFO basis.

These government restrictions meant that even brokers which used to be happy to accept customers from the USA no longer do so. Your social trading options have become much more limited though not impossible …

Available Social Trading Plaforms for US customers:

ZuluTrade:

Of the mainstream social trading networks which let you follow and automatically copy other traders, ZuluTrade is the only one which still accepts clients from the USA. But unfortunately there are quite a few restrictions put on the service:

  • While non-US customers can choose from about 10 to 30 brokers to open their accounts, US ones are limited to 2. Currently these are: Forex.com (Gain) and FXCM. I.e. very limited though we have ourselves accounts with both of them and had no complaints of the service so far.
  • US resident are also restricted to opening one trade pair at the time because ZuluTrade has no control over the strategy their signal providers follow. This means you best look for traders to copy who normally only open one trade at the time themselves. If you copy traders who normally open many positions, your results will differ significantly from those of the trader you copy.

ZuluTrade is free to join and try.

Trading Motion:

Trading Motion gives you access to over 900 automated trading systems which trade everything from S&P futures to Euro Bonds and Gold. You pay a monthly fee to subscribe to a system and the trades will be copied directly in your broker account. Currently about 600 of their systems are available to US customers (i.e. their strategies fall within the restrictions) and over 20 US brokers and FCMs are supported.

We’ve not tried this service ourselves though and no demo option is available. However you can freely look at the past performance of the trading systems on their website.

Peeptrade:

Peeptrade call themselves the “Social Network for Investors”. Instead of copying other traders or systems, Peeptrade allows you to look at (‘peep’) the portfolios of professional investors (such as IFAs and wealth managers). You pay a monthly subscription fee per investors you ‘peep’. You also get email alerts when they make a new trade or close a position, and you can be “trade socially” by interacting with the investor privately via the Peeptrade dashboard. But basically it is up to you whether you want to copy the actual trade or not.

Peeptrade itself is based in the USA and so are most of the investors on the platform, meaning most trading strategies are fully compatible for US customers. In addition, their platform is now connected to all brokers and financial institutions in the US.

You can join the network for free and some investors offer a free trial.

Collective2:

Collective2 US based copy trading network also brings “Trade Leaders” together with “Investors”. They’re broker independent so you’ll have to sign up with one of their partner brokers, most of which accept clients from the USA (although when we tried to sign up it only gave us the option to sign up with their preferred broker: Interactive Brokers).

There’s a good choice of Trading Systems you can copy, and we’ve been told that all of them are compatible with the US trading restrictions (which seems correct from the ones we looked at so far). Depending on the system you want to copy there’s a subscription fee ranging from $20 to $150 per month.

Some Trade Leaders do offer a 7 or 30-day free trial period.

Porter Finance (Social Option Trading):

There are a few binary options brokers which started offering a social trading feature which allows you to copy the best performing traders on their platform. Unfortunately most of these don’t allow US customer.

Porter Finance however is an exception. The have local support numbers in NY and LA. And via their social trading solution you can find and automatically copy the best binary option traders on their platform (i.e. the ones with the highest win %).

MQL5 Trading Signals:

MetaTrader is a trading platform used by over 600 brokers worldwide (we don’t have the list of US one though we know there are quite a few). Through the MQL5 website you can subscribe to automated signals or buy systems developed by MetaTrader4 and MetaTrader5 developers.

You can copy the signals or run the systems direct from your MetaTrader terminal. However this would mean you have to leave your computer on 24/7 so a cleaner solution is to find a broker which offers a VPS service or use virtual hosting.

Unless you’re a little bit technical these options are obviously a little complicated. You’ll also still have to look through the systems yourself to find one which are compatible with your US broker account. There’s unfortunately no option to search specifically for USA compatible signal providers or systems.

 

We know that being a USA resident is fairly restrictive when it comes to trading and finding a broker. However we hope that the above solutions at least provide you with some options to try social and copy trading. This list is certainly not exhaustive and we tried to focus on different types of solutions. When we come across any new relevant networks or platforms that accept US customers we will add them to this list. Your comments are welcome too?

Trading in CFDs and other leveraged products related to FX, commodities,indices, stocks and other underlying variables, carries a high level of risk and can result in the loss of all of your investment. Always consult an independent financial advisor. Never invest money you cannot afford to lose. Content on this website does not constitute advice and is for educational purposes only!

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