Source: Pixabay No Attribution Required
An honest broker will tell you that trading is not for the faint of heart. It takes skill, research, and experience to become adept at trading. This is particularly true when one delves into the intricacies of inherently volatile assets such as cryptocurrencies, forex, and to a lesser degree stocks. Regardless of your choice of underlying security, it's imperative to have at least a rudimentary understanding of the financial markets, charts, graphs, and various analytical resources. A good trader understands that there is no blanket solution to success in the financial markets, suffice it to say, a broad-based approach typically bodes well.
As a novice, you will invariably be lacking in the experience department, through no fault of your own. Shortcomings like this can be detrimental to your success as a trader. No broker offers FDIC-backed insurance on stock trades gone bad; that is a luxury afforded to customers of insured banks on their standard account holdings. One naturally assumes a much higher level of risk with equities, currencies, and contrarian investment options such as crypto. The formidable challenges faced by traders often serve as a disincentive to participating to the financial markets. Fortunately, the brains trust behind leading trading platforms unearthed an absolute gem of a solution in the form of social trading.
Social Trading Shines a Light on the Most Successful Traders in Our Midst
Social trading gained traction through the power of social networks like Facebook, Twitter, YouTube, Instagram, Pinterest, and others to influence the broader community with perspicacious insights into trading activity. This info is gleaned by traders by way of seminars, webinars, articles, guides, and trends analysis used to supplement trading knowledge. While social media focuses on soundbites like celebrity pop culture, breaking news stories, or current trends, social trading focuses on sharing trading ideas with the broader community of registered traders.
Therein lies its promise; it serves as a one-stop resource for fast-tracking the learning curve in a seemingly infinite database of highly complex trading systems, trading techniques, and market mechanics. It is impossible for one person to have a finger on the pulse of every significant factor in the economic markets. This consistently places the trading community at a distinct disadvantage. By haphazardly applying the ceteris paribus rule to trading, one runs the risk of neglecting valuable information in trading decision-making processes.
A workaround is found in the social trading arena. Of course, social trading needs to be understood before it can be utilized as an effective resource. At its core, social trading is about capitalizing off the collective know-how of the community. Given that a social trading platform by its very essence is focused on trading, registered members are inherently invested in the well-being of the community. Experienced professionals in the social trading arena actually share their valuable insights, understanding, and expertise with fellow traders.
This allows a relative novice to register at a reputable social trading network, and profit accordingly. Ingenious though it may be, social trading is not a panacea to countering the uncertainty and volatility inherent in the financial markets. However, social trading allows for a degree of risk mitigation by following, and copying successful traders in their trades.
The Perfect Hedge Against Imperfect Information?
Whether trading or investing, a social trading platform is a powerful resource to add to your inventory. One of the most difficult aspects of buying and selling underlying securities is determining what to buy and what to sell. In social trading, one quickly learns that safe haven assets like gold and the JPY are excellent hedges against stock-market volatility.
Social trading also provides answers to burning questions like what happens to cryptocurrency prices when stock markets plunge, or what happens to altcoin when Bitcoin prices rise or fall. The community of traders and investors are effectively first-hand resources to consult when markets are undergoing bullish or bearish movements.
Powerful trading platforms now make it easy to follow the trades of experienced professionals, whenever they buy or sell. Updates and notifications are provided in real time, for traders on iOS, Android, Mac, and PC. This means that anyone can imitate the trading activities of experienced professionals, thereby profiting when they do, based on the value of the underlying investments in those securities.
Allied with social trading functionality are the standard charts, graphs, webinars, seminars, guides, articles, insights, and trader expertise necessary to supplement decision-making processes. Such is the power of social trading that novices often become experienced professionals whom other novice traders start to follow. The option to share in the spoils of victory and learn from the collective mistakes of the trading community is invaluable.
Given the complexities of the modern-day trading milieu, it makes sense to enlist the assistance of the greater community for the collective good. That's why social trading is so popular today.