Are you wanting to find out more about Forex? Have you considered trading Forex with a Social Trading platform? You might find you can become profitable – fast – and – you can earn good cash while you learn!
Forex + Social Trading?
Financial markets offer diverse opportunities to make money. Entrepreneurs continuously explore and craft opportunities through innovation to leverage the skills of traders. One of the most recent innovations in the financial markets is Social Trading which blends social media with online trading. Leveraging cutting edge technology, Social Trading companies’ like eToro, ZuluTrade and Ayondo offer compelling products. Platforms like these have revolutionized the way people perceive financial markets and trade them.
As it’s a commonly known fact that 95% of Forex traders lose, Social Trading and Copy Trading offers a profound opportunity for newbies to follow in the footsteps of those 5% traders that succeed in making money over the long-term. By allocating some of your funds to copy the trading actions of experienced traders, you can benefit from their experience, and even make money while expanding your knowledge.
The Social Trading phenomenon
Social trading is a fairly new phenomenon in the retail Forex market and the concept has been gaining popularity over recent years. A credible Social Trading Platform offers complete Transparency by presenting the Trader’s profile for all followers to see; including valuable information such as trading history, gain, risk score, portfolio diversity and more. This data on eToro and ZuluTrade is absolutely fantastic.
The notion of a ‘Social’ Trading platform refers to the ‘Social’ themes, in a similar vein to those offered by social networks like Facebook, Twitter and Reddit, where people directly communicate to anyone on an ongoing basis. Customers, unlike institutional investors, do not object to sharing their investments. Users can therefore benefit from “the wisdom of the crowd” and learn what other investors are doing.
For social interactions, we at the Shark feel, eToro offers the most engaging global trading community.
Is Social Trading or Copy Trading a Scam?
Copy Trading as provided by eToro and ZuluTrade is definitely not a scam. In fact it’s more like the opposite, they are strictly regulated. The degree of compliance required from these companies is staggering and as a result they have to keep their house in order.
Read our full review of eToro here, else keep on reading to find out the big benefits of Social Trading.
Top 5 Benefits of Social Trading
1. Social Trading Boosts Learning
Every successful trader has had to go through a significant amount of learning and practice in order to become profitable. This time investment needs to be taken to familiarize with trends, momentum, charts, and building and testing their strategies in the market. The major challenge is that learning on your own is hard as you may not find the right direction and it can take much time for you to learn the right thing and apply it correctly in your trading. Of course the internet offers plentiful resources but it can become perplexing attempting to make sense of it and deciding which resources to trust.
Social trading removes the stress of learning, though it still does not guarantee success, but this model gives you opportunity to find the way that most experienced and skilled traders use in their trading. You can simply explore their strategies and learn from their experiences or you can choose to copy any strategy of a successful trader after analyzing their actual historical trading record.
2. Earn While You Learn
It’s quite rare to find such opportunities when a trainee is paid for learning. Social trading platform offers this privilege to the newbie traders to not only learn quickly with social trading but also make money in parallel to trading. Once you are able to find the traders who fit with your criteria of annual profitability, risk and Drawdown then you can simply copy the trader, and their trades are copied in your account!
3. Opportunity for Collaboration & Skill Development
Another prominent feature of the Social Trading networks like ZuluTrade is that it allows you to connect with the professional traders. Before this idea really took off, it was barely possible for people to interact with other professional traders, exchange ideas and effectively gauge the common trend and sentiment of the market.
The transition from trading floor exchange to the computers and internet has virtually eradicated trading floor communication. However, Social Trading platforms like eToro have enabled the traders to form collaboration again by creating truly global trading communities. These networks enable the traders to easily contact other traders and exchange trade ideas; gaining deeper insights on any financial instrument. This is priceless. When you can apply concepts to your own trading strategy that may eventually enhance your performance.
Social Trading platforms offer a profound opportunity to enhance your trading abilities and sharpen your skills. You can literally improve your trading by copying and observing those traders that can maintain a consistent profitable track record rather than wasting your time experimenting with the things that don’t really work and getting caught by beginner gotchas.
4. Avoiding Anti-Trend Trading
These networks also help the newbies to avoid the common mistakes by trading against the trend. They find the direction opted by most of the traders so they are half way safe by trading in the right direction by copying the common sentiment and momentum. Traders working as a unit become more efficient as they cover more of the nitty gritty than an individual trader can cover alone.
Social trading networks offer more transparency as there is no need for a middle man intervening in the process of copying trades. The trades are copied from master account to the copier at almost the same price provided little slippage that varies from broker to broker. Also, the flow of information becomes efficient as there’s no blockage that can occur in conventional modes of trading for the retail traders.
Fast-Track. Follow an Expert.
There are numerous advantages and disadvantages to any investment and so is true for Forex social trading. The key to secure success in any endeavour is based on knowledge. The more you understand how financial markets and in-particular, the instruments work, the more you can substantially capitalize your profit and reduce your risk exposure. The accumulated knowledge can then be used to equip you against leaping into unlimited risk exposure. By an order of magnitude, this is easier when you are not trading alone but rather you are developing your skills in the shadow of an expert professional.