It is almost unthinkable to imagine the world without social networks and the ever-flowing stream of ideas, knowledge and various data.
It would probably be true to say that most of us have a mild addiction to social media sites like Facebook, Twitter, MySpace or Pinterest. At any rate, social media networks have become powerful tools where people actually make staggering sums of money.
So, what happens when you marry social networks together with online trading?
Social trading, which is becoming the next big thing in the financial world.
Why is Social Trading Making so Many Waves?
But, what is it exactly that makes social trading so ground-breaking?
It functions like a giant brain, actually. Yet, the twist is that it is shared by millions of people. Social trading uses the collective wisdom of many as opposed to one, or just a select few.
It provides a powerful insight into the world of online trading like binary options, Forex or CFDs.
In fact, many claim it has shortened the learning process, taking novice traders to professional ones in a much shorter time period. It also took a usually solitary activity and turned into a social one.
Just like social media, on social trading platforms people share their knowledge, swap tips and ideas.
The only difference is that it is all focused on financial trading.
Benefits of Social Trading
Knowledge always meant power.
This much has not changed since the early days of human existence and social trading platforms became places where knowledge and information are shared rapidly. This also ties in neatly with another old adage – time is money.
For numerous keen investors around the world that means they can make money quickly by following what those with more knowledge and trading skill are doing.
By observing, sharing and copying trades beginner traders are no longer left to figure things out on their own in the trial and error fashion. Of course, not every trade is going to be successful but by observing and interacting with others this somewhat intimidating process becomes easier.
And more fun.
Social trading platforms have become places where traders come together to support each other instead of engaging in the mindless competition so intrinsic to the financial world thus making it more humane.
How Does it All Work?
Every social platform is slightly different from another, but hopeful traders can join in for a fraction of the price traditional investment usually required.
In a way, what social trading did is it took down the centuries old fortress which was only accessible to a select few.
In the shared knowledge approach, new traders are spared the often difficult, complex and confusing technical and fundamental analysis which could take a long time to master.
People want results quickly. They want to earn profits as soon as possible and with social trading that is a real possibility.
Social trading is not just a handy profit-making tool for new traders, but those with far more experience as well. Professional traders can get fresh ideas and brainstorm various trading strategies with fellow traders from around the world.
Traders have access to other investors’ portfolio which means they can assess their success rate, get constant news feed and monitor what trading activities they are taking.
Social trading functions much like social networks so you can simply elect to follow traders you find interesting and learn rapidly from what they are doing.
The principle is simple – select to follow popular and successful traders, observe their trading activity and learn from it, interact with those who have more experience and finally, copy their trades.
With social trading, financial investment moved away from the often intimidating world of grey suits and injected more colour and energy into it.