Social trading experience – which social trading platform is worthwhile? Many people are looking for a successful entry into trading. And are looking for suitable investment opportunities. But at the beginning there is a lack of overview and the necessary knowledge. Social trading would be created for this.
Often one is lured with great vacation photos in social media for social trading. Instagram and Facebook show how simple everything is. Is that it? There’s a little more to it than that. And that’s what we’re going to get into today in this article.
What is social trading?
A social trading platform offers you the opportunity to exchange information about current stock market events. Followers follow a trading expert – a signal generator. You can follow and copy his trading ideas. However, this is fraught with risk. We will go into that further here.
How does social trading work?
It has been part of online trading for a number of years. Numerous providers and brokers offer this trading opportunity. As a rule, the respective social trading platform is kept very simple. So that it can be used by the masses easily and without great effort.
The followers and a signal transmitter meet via the platform. It is therefore important to follow a signal transmitter that is already experienced. Because you copy his results and trades. There are also many beginners and inexperienced users who share their trades through these platforms.
In order to be a successful follower you should look for one who can have at least a trading performance of 6-12 months. Social trading was created to easily follow a signal generator. But this one should be chosen carefully.
Copy Trading and Mirror Trading – What’s the Difference?
As the name suggests, copy trading is about copying trades. Without having to analyze the Forex market yourself. You copy the trades you want from the signal provider.
With mirror trading, all trades of the social trader are copied. So the follower doesn’t have to do anything himself. The trades are automatically opened and closed on your own trading account.
As a beginner you get the chance to participate in the Forex market. Acquiring without prior knowledge. This is often used by people who do not have the time. Or don’t want to learn to trade yourself. However, it is important not to blindly follow a signal transmitter. You have to choose it wisely in order not to end up losing.
Social Trading Experience – This allows you to participate in the Forex market without prior experience. Without having to master analyzes or chart technology yourself. Or opening rash trades. This is particularly helpful as a beginner.
But why are there traders who make their trades available to others?
On the one hand, it is advertising for the signal generator if it can demonstrate a successful performance. On the other hand, if he is successful, he benefits from commissions. Since these are usually success-based and only arise in the case of profits, we strive to deliver a good result.
How can you start with social or mirror trading?
Anyone who has found a provider who has proven results of at least 6-12 months can register. And benefit from this.
So you first set up a trading account. Pay in money there and connect with the desired copy trader. Usually this is quite easy to do. Otherwise you can always get in touch with the provider.
Is social trading worthwhile as a follower?
As in school, you learn from someone who already has knowledge of what is still missing. Be it the teacher or a classmate. Signalers have often read a lot of books, tried strategies and therefore had great trading experience.
Social trading is a way to get started in Forex trading. You benefit from the knowledge of others.
This offers you the following advantages:
- little capital investment required
- no prior knowledge necessary
- Learn from professionals!
- Further training possible
- Exchange with other traders
However, there are also disadvantages to social trading. Many providers make a good impression at first glance. Sometimes even hyped. Because they are only interested in commission. But disappear again after a short time from the market. Because the trading performance was only achieved through high risk. In the worst case, it ends with a total loss of the invested amount.
You should take the time and look for a suitable provider. One who does not have high open positions (high drawdown of 40 percent or more). You should also keep your distance from providers without long-term performance.
Conclusion on social trading
It is becoming more and more famous and popular. Even more with social media.
You can learn from the knowledge of other. But you trusts the person or the provider at this moment. So you should choose it carefully. But it doesn’t automatically make you successful. For example, you can use the time you use social trading to learn to trade yourself in peace. To make yourself independent.