A popular feature on trading platforms, especially with social trading, is the Popular Investor Program. Usually consisting of different levels, investing on a certain platform under certain requirements can see you progress up the stages to a Popular Investor, with each level coming with its own benefits.
Depending on the trading program in which the investor is enlisted to, these benefits can range from a monthly fixed payment to a percentage of their total yearly assets under management (AUM). Investors can also promote themselves more easily with a Popular Investor status and can prove themselves to the trading community, meaning that they are more likely to be involved with Copy Trading.
Copy Trading consists of the automatic copying strategies of more experienced traders and investors, replicating their trades into your own portfolio. And if you are one of the Popular investors that others are copying, it can earn you a good sum of money.
So, if you believe you have unique strategies, a portfolio with good statistics and can offer value to the trading community, you already have the best qualities to reach the Popular Investor title. But what are the risk requirements that you need to meet in order to do this?
The first initial steps are usually creating an account on your chosen trading platform including your name and a short biography about yourself as an investor, with a minimum average equity set by the site established in the account. As progression through the levels are completed, the minimum equity increases, as well as a required minimum AUM needing to be achieved.
One of the main requirements for a Popular Investor level is to adhere to particular Responsible Trading Requirements set out by the trading platform, especially if the investor is managing the funds of other people.
In order to be a Popular Investor, you must also maintain a maximum risk score. This can vary between six or seven, depending on the platform, and must be kept for a full two months. A risk score gives the level of risk a numeric value, with zero being extremely low risk, to ten being extremely high.
Although risk scores can determine the volatility of a certain asset, for Popular Investors it is calculated for people. The risk score of an investor includes the calculation of various factors, such as the largest amount of equity loss encountered during a certain period of time, the volatility of the assets within the portfolio, the amount of equity being invested in each trade, and the leverage used.
For Copy Trading, the risk score is an indicator of how much others are at risk by copying the trading strategies of your portfolio. It allows for a better understanding of the types of portfolios and people that traders or investors are investing in, as well as a risk requirement of the Popular Investor status.
You will also need to abide by leverage obligations or restrictions, to maintain the risk requirements, as using more leverage amplifies the risk. With more flexibility than traditional investments, CFD Trading allows for monitored leverage trading, so is something to consider when observing the risk requirements for Popular Investor Status.
CFD Trading also has access to global markets, and is a popular way to trade commodities, indices, currencies and stocks. CFD, short for Contract for Difference, enables the trade and investment of assets by having a contract between yourself and a broker, instead of owning the asset directly. It means that investors can profit from the price movements within the market, with a more instantaneous transaction. This type of trading is worth considering to diversify your portfolio, improve the possibility of copy trading, and increase the chances of meeting the parameters required for Popular Investor Level.
Popular Investor Programs also tend to come in a tiered system, so although you may be hitting all the marks, meeting the criteria and eager to move up a level, the program usually requires you to maintain the status you’ve acquired for a particular amount of time. So be patient and consistent, and you could see yourself progressing within a few months.