Trading in the stock market is all about timing. If you know how to deal your cards right, then, no one can stop you from earning gains on market corrections irrespective of the volatility. These types of investors are financial experts and professional traders in this financial expanse. Now, some traders don’t have time to sit, think, discuss, compute, and to put all the pieces together. That’s when you pick social trading en route, a trajectory to mimic or follow the footsteps of the winning traders in the stock market game. Well, let’s take a leap to know more about the social trading concept in detail.
What is Social Trading?
Have you heard about the index fund? It just mirrors the attributes and performance of a particular stock market index. Social trading works in the same way. The only difference is that it tries to copy the other traders’ positions in the financial market. It allows traders to access and execute similar sets of strategies and trading techniques that were operated by successful traders.
This form of trading conception enables rookie traders to learn and absorb the way how trading works. As the name suggests, social trading allows traders to interact and socialize with the financial markets in a much more friendly manner. You take the inputs of various traders to replicate the same output captured by those traders.
Find out more about social trading. It enables beginners to learn and adopt various things in the trading world. Not only that, but this process also teaches traders on how to take swift actions and make impromptu decisions when it comes to choosing between buy or sell a particular stock. Unlike social media where people share images and videos, here, in social trading, you see the analysis reports of the market.
If you sign up on a comprehensive social trading platform, you get to view the market positions of other professional traders in the market. You can also subscribe to follow their trading works, and incorporate the same financial principles while you are trading. Traders can use social trading to mimic the trades of any asset classes across the financial horizon.
In fact, social trading is not just for untrained finance enthusiasts, even experienced traders enjoy the benefit of rewards when someone impersonates their trade strategy. Now that you have learned a lot about social trading, let’s learn the steps of creating an account on a social trading platform.
Process of Starting Social Trading
Social trading can be fun if you are animated about trading and have the zeal to make a headway in the financial stock market.
Find a suitable social trading platform and signup
After that, search traders and check out their portfolios on the platform.
Next, use the filter to locate expert traders that suit your persona and style.
Once done, check out their trading models and mimic accordingly.
Pros of Social Trading
As you have understood the steps to set up your profile on social trading, below we have shared the pros to give a sneak peek of why this platform is popular among traders, investors, and other finance nerds.
Transparency: Technology and the internet has brought everyone closer to each other. Despite the distance, the extended social media family always made people feel like home. This goes the same with social trading, a platform where traders meet, greet, interact, learn, copy each other’s trade activities, etc. The best part is that traders get to exhibit the trading portfolio of influential people and popular traders as well. The closer we indulge in social networks, the more transparent we become as with each passing day.
Inclusive Learning: The foremost reason why traders start social trading is to comprehend the trading analysis and learn the basics from other traders by watching their trade portfolios and approaches towards trading. The benefit of doing so ensues in building a better portfolio for traders who want to succeed in the financial stock markets. Simply put, social trading is like trial and error where a trader learns the model of one trader, putting it to trial to check whether his/her strategy is working or not. If the trail turns into a win, the trader saves the modus operandi of the trade to implement in his/her future trades. On the contrary, contemplating failed trades teaches you a lesson that’ll serve you better while you are making an investment decision.
Helps You Build a Community: Well, social networking is all about building like-minded communities, so is for social trading. Using this platform, as a trader, you can create a community of your own by following and subscribing to the list of traders you feel like they can be worthy down the line in helping you to build your wealth. Best of all, these trading communities act as a mentor to young traders, where here, you can simply observe and learn.
Trains You to Become a Professional Trader: Every beginner and expert trader wants to make good money out of the stock market. That’s only possible when you play your cards right by following all the analysis and strategies properly. Social trading trains traders exactly for that. Through this platform, you can extract a lot of trading-related knowledge that’ll help you during trading. Not only social trading teaches you to become a pro trader but also educates you on multiple stock market domains that are very essential to know prior to trading independently without the assistance of these platforms.
Truncating Extra Costs: Generally, learning trading all by yourself costs a fortune if you look at the list of topics available in the market to cover. From stocks to mutual funds to bonds to derivatives, there’s so much to know about each division. As they say, Rome cannot be built in a day, learning trading is just the same. It takes years of learning, practice, dedication, and toilsome hard work to reach the acme position in professional trading. Social trading alleviates all those hindrances and costs that are called for you to become an expert trader. Though you are inexperienced, going forward, this platform supports you to achieve the desired results. Continuous learning, patience, and perseverance will help you get ready to face the market individually.
Con of Social Trading
Although social trading platforms are busy with traders across the world, the idea has its share of differences as well. As they say, every coin has two sides, so is for social trading too. Below is one con we felt it would be important for traders to know what they are getting into before labeling the social trading platform as “successful”.
Relying on Other Traders’ Consciences: The concept of social trading itself is following the trading methods and strategies of others. That’s one part of the job description but as a trader, it’s you who have to be intuitive about your trades. Before you buy or sell anything in the stock market, it’s you who have to keep a tab of what’s going on in the market. It’s not illegitimate to follow the same steps of other professional traders but, you have to do your homework prior to signing up for anything. Solely depending on someone’s skill and expecting something more out of it doesn’t make any sense. Because, each trader has their own perspectives and thoughts about the ups and downs in the market. Finally, if you are oblivious about what’s happening in and around the market, then, as a trader, you might end up missing out on something big.
Social trading is an incredible way of learning how to trade and to become a master in trading. This platform helps you to attain knowledge, experience, and boost your earnings. However, at the end of the day, to become a successful trader, you have to be aware and conscious about the everyday occurrences in the stock market.