What is Social Trading?
Social Trading allows the investor, even if inexperienced, to copy automatically the financial transactions made by one or more professional investors inside a trading network.
Investors from which to copy can be selected either by observing their track records their performance, either interacting with other investors inside social trading platforms (among the best, we can mention eToro and ZuluTrade).
Social Trading is therefore a particular form of trading that is made by the investor not on the market but on the traders that operate on the market (or even on a traders’ fund with the eToro CopyFunds).
In addition, working via server, operating with Social Trading does not even require to have always your computer turned on and running programs.
This new field born and developed mainly due to the Forex market and the use of MetaTrader platforms, and even today the Forex Social Trading remains the most widely used sector, despite the advent of CFD is enabling the expansion into a number of other derivative instruments (shares, indices, commodities, bonds, interest rates, etc)….
The Social aspect of Social Trading
In Social Trading the user is no longer alone, but is surrounded by thousands of investors who, like him, are trying to make the right choices and avoid following all those traders who are not professional, relying only on the best.
This interaction between users can definitely bring benefit in some cases, but you should not overestimate it.
The “Social” attribute in Social Trading can be a good thing, definitely innovative and in some ways can be an advantage compared to being completely left to yourself, but you have to take everything very cautiously.
Because This is not about commenting your friend’s photos, sharing your thoughts with the world, discussing of politics, of your passions, or in general interacting in a social network as you would do every day.
Here we are talking about Social Trading networks, we are talking about money. And money is a very serious thing…. as any other form of investment, involves risk.
Does Social Trading work? What are the benefits?
You have and will always have the full control over the operations the trader you have chosen will execute, and on your money.
The property of your trading account will always be yours, you will not deliver your money to anybody, you’ll be able to manage every single aspect of your investment and always have everything under control, at all times.
This is a huge opportunity, however, requires you to be fully responsible. The reward for this thy duty is that the percentages of return on your investment (ROI) can be much higher than any other traditional method.