Social trading is one of the hottest buzz words in the world of trading at the moment. You can’t go to any major Forex website without seeing someone mentioning social trading or investment. Social Trading has the ability to radically change the financial markets, meaning people are understandable excited about Social trading.
What Is Social Trading?
Social trading has the potential to allow those without significant trading experience to make money from the financial markets. Social Trading allows individuals to see what positions other traders are opening in real time thus giving them the ability to copy that particular trade or all the trades that one particular trader makes. Many of the social trading networks currently operating allow individuals to see how other traders have performed in the past allowing them to make informed judgements in regards to which traders to follow.
The basic idea behind Social trading is very simple, those without the experience or skill to trade the financial markets can piggy back on the success of those who do have the relevant skills and experience. You may now ask ‘Why would successful traders share their secrets with others?’. Generally those who are providing the signals for others to follow will be rewarded in the form of commission for bring trading activity to a particular brokerage or the platform in question. This gives successful traders a reason to share their trades with others and often allows these top traders the opportunity to make a substantial second income.
Why Is Social Trading Attractive?
It should now be clear why social trading is attractive. Social trading makes the process of trading financial instruments much simpler than ever before, while also opening up access to the financial markets to many more people. Before the rise of social trading, if one wanted to try their hand at trading Forex or other instruments they would have to keep up with current financial news and learn about trading techniques. When it comes to social trading all one has to do is pick a number of successful traders and then carefully monitor their progress. Social Trading has therefore attracted a new breed of investor, one who is interested in making money from financial markets but doesn’t want to get to grips with trading themselves.
How do you start social trading?
There are a number of different social trading platforms out there, all of which cater themselves to slightly different target markets. Those who are interested in the prospect of social trading should go out and research the different platforms before determining which platform is suitable for them. Of course some capital is needed to take advantage of social trading, though it is possible to dive in with no more than $50. However to be successful a higher initial deposit is probably going to help.
Can You Really Make Money From Social Trading?
The answer is yes, I know of many people who have done very well out of social trading and I myself have had positive experiences with social trading. But as with all forms of trading and investment significant risk is involved. Many social trading platforms have introduced a number of ways to help traders reduce their overall risk. In order to be achieve ongoing returns from social trading, individuals are going to have to make sure they make diligent choices as well as carefully managing their risk. It does seem clear however that there are real opportunities to be had in the world of social trading.
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