Thanks to the internet and all the social networks today is possible to share information and track people movement in real time. This ability has generated all kinds of social phenomena. The financial industry is not the exception to this new trend, and many investors are getting huge profits just by following what the best trader and their fellows do.
What is Social Trading?
Social trading is the legal used of top professional brokers and most renowned traders generated financial content derived from their online trading, which is gathered from several social and financial platforms as the main information source for making a stock or financial investment, or Binary options trading. Using social trading the investor does not need to do technical or fundamental analyses, he just copies the strategy, analyses, and wisdom of the broker’s networks and the trader’s crowd to maximized his profits and minimized his risks.
Understanding Social Trading
Social trading has two basic modalities to invest:
A. Copy an expert broker or user strategy and portfolio.
B. Invest in a social trading fund.
Copy an expert broker strategy and portfolio Tops brokers make their investment and establish a strategy for the period. This data is recorded.
1.Tops brokers make their investment and establish a strategy for the period. This data is recorded.
2. Brokers are rated based on their accuracy, profitability, and investment trajectory and their information is properly cited
3.Data is periodically available as a newsfeed to share with the trading platform, and the source is indicated with the broker rating on it. (Usually, only brokers with the highest success rate are included as data source)
4.Investor from social trading choices if he wants to become a follower of any particular broker or trading network, or just read the information and get the data for his learning and analysis.
5.Once the investor decides, he wants to follow any broker or financial network. He can copy their entire portfolio or just select some assets from them and invest in the same way as the professional brokers.
6.Investor has completely control over the amount of money, that he wishes to invest per trade.
7.Once maturity is reached the investor gets his profits, He can continue following the social trading or invest on his own.
Invest in a social trading fund.
It offers the possibility to take part of a social trading fund in which the traders can invest in a social fund created on the social or trading platform making a deposit. Afterward, the best and more knowledgeable traders manage this fund, investing it in a diverse portfolio, using some top-notch algorithms and the financial wisdom acquired after years of trading experience to maximize profits and decrease risks. This social trading fund works similar as a hedge fund with the main difference that the investor can get his profits sooner and increases his participation, or gets out of it easier and several times during the months.
Social Trading Benefits
The data shared has been gathered from the top performing and bestbrokers
Investor can read the data and prove it just by watching its outcome before deciding if he wants to follow it, or not.
Feedback score for each trader used as a data source is displayed, this allows investors to properly identify the analysis and strategy’s author, as well as his profitability, success rate, and risk score before others even read the information he is creating.
Easy to use interface, Investor can just do a copy and paste of the crowd or any investor’s portfolio from the think-tank, or do any modification he considers and trade accordingly.
Any new trader can get the wisdom and financial advice of professional brokers and get the same information as big financial corporations.
Free to use it or ignore it. The investor is who has the last word, whether he may copy the strategy or use his own.
The amount of money to invest is up to the investor comfort zone.
Anyone who is part of the social trading gets a massive amount of information, which was previously exclusive for big financial corporations.
The information free flows as newsfeed, and it is delivered periodically or as soon as it is generated
Who may use Social Trading?
Excellent information from a reputable source is the best asset someone could have to make a financial investment. Trading is a financial tool in which the proper pattern identification and market signals must be understood to get the expected profit and take out uncertainty. No matter how many years of trading experience an investor has, a good hint and a better understanding of the assets momentum is priceless. Therefore, each big financial corporation has been doing social trading, sharing his inside information, and communicating strategies among each one of its brokers to avoid any major pitfall. The better informed you are the best decision you make. It is a proven strategy. To make this clearer anybody may benefit from getting more information about the assets momentum and its price expected movement. A new trader can learn valuables insight and strategies in a couple of weeks, which otherwise will take hit some years. Furthermore, an expert broker will benefit with additional information and the most important with more investor trading in his same way.
Social Trading in a Nutshell: It is the ability to get legally the investment strategies, portfolio and insight information of the best brokers and others uses from the trading platform in real time with the possibility for copy and paste it or just analyzes it to get bigger profits and decrease risks.
Rationale for social trading use
There are many papers about social and collaborative trading and the huge impact it has on the final asset price and the financial market. Almost all of them are positive, and those had proven social trading as an excellent investment tool with a higher than 80% success rate. The fundamental analyses as well and the technical information is more reliable when more than one reputable source confirmed it avoiding any misread or wrong data interpretation. Social trading gives the opportunity to get an invaluable market insight. Keep in mind there is a social trading fund from which you can take advantages too.
There is only 2 regulated brokers that allow social trading – eToro and Tradeo. Start copy Trades from best Investors!