The emergence of social trading was made possible due to the evolution of social media and their establishment as a mainstream method of information sharing over the internet. Users of social trading platforms get instant and constant access to information about the markets, but this information is generated by the other users of the network, allowing newcomers in the world of trading to make trades without having to perform the necessary fundamental and technical analyses themselves. In essence this means that through social trading, we base our investment decisions on the data and analyses performed and generated by others and which is shared with us in real time. For newbies in trading this is very useful and significant, since it can dramatically shorten their learning curve.
The beauty of the whole process is the fact that new traders get the chance to witness and then replicate the trades performed by the more seasoned traders and gain a full insight on how such expert traders behave, decide and act. In a nutshell, this is a real-time learning experience taking place in a real environment. Learning is thus faster and learners can trade with the assurance of being aided by a kind of safety net or training wheels. Although not all risks associated with trading are eliminated through social trading, it becomes much less possible that a newbie’s trading debut will end up with the complete obliteration of one’s trading funds.
The difference in the trading and market information one gets through a dedicated social trading platform compared to such information than is posted on other types of social networks, such as on Facebook, is that the info on the social trading platform is much more reliable and you can also check if the person sharing the information is also putting their own money where their mouth is by verifying if what they claim is reflected in their own trading decisions in their trading profile and portfolio.
George Milios is the founder of onlineforextrading.net, the binary options and forex news portal which is dedicated to providing you with all the information you need to successfully trade.