These days, virtually everyone is connected to social media in some way, so it’s not surprising that there is a new trend in trading called social trading. It’s become pretty popular, and it’s not hard to see why. People love to share, whether it’s photos of cats being cute, people being silly, or themselves giving advice. As traders, it’s the last one that we’re interested in.
You’d think that in Forex trading people would play their cards close to their chest, but no, human beings are social creatures who can’t resist the urge to share what they know, and now
they can do that with the rest of the world, so they do!
As a trader, you thrive on information (or at least, you should do) and social media has now given you access to an avalanche of information from other traders. You can look at the trading histories of hundreds of others, and just steal them—use them as templates, copy them into your trading platform, test them out, and see what happens. You’ll be able to trade consistently without having to stay connected to the markets, and as a beginner, social trading is a godsend. If you’ve got little or no understanding or experience of the markets, social trading is like a free (or very cheap) degree in economics!
Of course, every silver lining has a cloud (or so the pessimists say) and the danger of social trading is that following other people’s advice can sometimes lead you off the edge of a cliff. Forex trading demands that you be smart enough to mitigate your risks. Nobody likes a margin call. Maybe that’s why dedicated platforms for social trading have started to become popular.
With some of these spaces, you can get your own individualized social trading news feed, post a bio, and share your stats and portfolio with others. It’s a great way to quickly find what successful forex traders are doing and copy their investments or techniques.
Then, of course, there’s the actual interaction. Connecting with other traders and sharing tips with them, benefiting from their hard-won knowledge, and avoiding the need to spend countless hours poring over charts and figures. It’s a great way to start earning without needing to pick up all the skills and experience that traders usually have before they trade for real.
Of course, if you’re using a dedicated social trading platform then there is going to be a cost element. Some charge a flat fee for each transaction, so yes, if you’re using the platform then you’re also using it for trading currencies, but you’re benefiting from charting tools and access to people with skills that you would never normally encounter. Earning while learning and connecting is the way to look at it.
Social trading is one of the best new ideas that the age of the Internet has thrown up, so go in with your eyes open, and don’t expect to come out with your pockets full. Half-full maybe, which is still pretty good for a beginner. You can’t put a price on being a member of a reliable trading community, and the price they do put on the service is very reasonable, considering how much time it can save you in getting your trading career off the ground, and how much it can help you make the kind of informed decisions that will reduce your losses and increase your successes.