Everyone wants to get rich quickly, but the thought provoking point is “Can you get rich by copying other traders/investors?” Financial trading is a secure route to earning profits; however, it’s imperative to understand that even social trading has its limitations and can swing in either direction. At the end of the day, the choice, the strategy and the decisions are yours to take.
What is social trading?
This brings us to the thought of “What is Social Trading all about?” Like Social Media connects people and business from different walks of life, even social trading trends on more or less the same concepts. It links traders from various parts of the world so that individual traders can follow and copy their trades automatically. This way, not only are successful trading strategies built, but the efforts of trading are also put to good use.
By following traders with sound trading knowledge, a novice trader can try and get up to 80% returns on their trades, thereby allowing them to make the most out of their investments.
How can social trading help investors?
Gone are the days of using the traditional methods of trading. With the advent of social media and new technology, there is a lot available to traders today. The benefit of social trading platforms like eToro and copyop social trading platforms is that you don’t need too much startup capital to invest.
At the same time, any investor, irrespective of their trading experience, can use these platforms to trade effectively and efficiently. This way, they can benefit from the use of social networking when it comes to expanding their portfolio of investments.
How does social trading work for investors?
Social Trading offers online platforms to retail traders to share information which can help other investors copy what they think is best for them. However, to the novice investors’, it might seem as if the concept is all about copying others. In fact, social trading is much more than that. The less experienced traders or the beginners get access to a pool of information which is crowd sourced from experienced investors.
For example, a Chinese trader might have adequate knowledge about the securities being invested and traded on the Chinese Stock Exchange. The Chinese trader’s information can, in turn, help a German investor to understand the exchange rate of the Chinese securities, in case he is willing to invest in the Chinese Stock Exchange. This way, they can engage in low-risk trading, which will further help spread the trades out differently. At the same time, there is a vast sharing of knowledge about different markets, which help make the whole concept even more versatile.
Selecting some of the best traders in the market
• Look for traders with at least a track record of 12 months or more on the social trading networks.
• Once you have shortlisted a trader(s), you need to look at their delivery of results. If their security choices have been bringing in consistent returns, then you can consider following those traders.
• At the same time, it’s imperative to see the existing number of followers a trader might have. This way, while you might end up following the crowd, it might, in turn, help you take important decisions with regards to your investments.