Forex trading via social platforms has several setbacks despite being very helpful to the traders. First, there is a large number of traders and social platforms, therefore, making it difficult to choose the best. It, therefore, requires a lot of time and dedication to making the most appropriate decision.
It is also difficult to predict future trends in the trade because some successful traders only care about the commission they will receive and do not pay much attention to the new traders with no experience. Thus no protection against risk is offered in these social platforms, and the new traders may incur a lot of losses.
History of successful traders is not always an assurance of success; thus, copying their strategies may mislead the new traders. This is in the case where the new traders are not able to understand the masters’ concept of forex trading by themselves.
The social platforms may not always have real-time information on forex trading, and therefore traders can be exposed to outdated content. This information increases the risks of making misinformed decisions, and this may result in losses.
Some traders may end up copying previous trades and strategies that other successful traders used, yet they don't have enough capital. Thus, they are not able to obtain the expected profits, which may reduce their motivation.
Slippage may occur where the expected cost of trade differs with the actual price. Slippage happens because of the difference in time between the execution of the order and the accomplishment of the trade; thus, making the traders pay an extra cost.
Another con of social forex trading is that many fake forex brokers may mislead the new traders with no prior experience. Thus unnecessary losses may be incurred and make the new traders feel demotivated and end up losing hope in forex trade.