Social Trading and you
Social Trading offers you safer trading experience with a minimum risk. It will take Forex and all other online trading methods to a whole new era in the near future. This lesson is for all forex beginners for a stable foundation about Social Trading.
From the 3.8 billion internet users all over the world, 9.6 million do online trading. These traders do trading using many different types of financial instruments via various trading platforms. Banks, financial institutes and Forex brokers work 24/5 to handle these transactions and continue five days a week Forex trade routine. As an individual Forex trader, you always have to take risks with your decisions and the money you invest in.
People everywhere need a proper way of earning money with minimum risks. From the constantly increasing 7.7 billion world’s population, you are just a single entity. You may have a daily routine, carrier life or full of life dreams to achieve. Therefore, have you ever stopped thinking of finding a safer way to earn money to follow your simplest dreams?
What is Social Trading?
Here we have the safest solution for all who want to earn money through online trading. Social Trading or Copy Trading is a concept which allows traders to copy successful strategies of successful traders. After copying, you can apply them and earn money only using a set of simple commands. Back in 2006, worlds’ first social trading platform “eToro” was founded as RetailFX. In this stage, even the founders might not have thought about today’s situation. Today, not only eToro but many other social trading platforms are in the trade. They provide millions of traders safer opportunities to earn money through online trading.
Think about yourself with a little money in your pocket. You can invest in Forex as a retail trader. Once you did, you must bear all the risks according to the asset you choose to trade. Maybe you do not have time to watch the news and financial and market updates. Without a proper Forex signal source, you will lose all your money/investment just by taking wrong decisions in wrong situations. For this, the uses of copy trading will guarantee profits without any risks. This is a good example of how Copy Trading helps individual traders for their success.
Features of Copy Trading
In Social Trading platforms, as common factors, you can read about professional traders strategies, behaviour and follow them. In advance, you can allow your trading account to copy pro traders strategies and apply automatically. When the pro trader you followed, achieve a profit, you are also be profited. But if his strategy does not enough to win, you must bear the loss. The reason is you are the one who selects your pro trader to follow. In Social Trading platforms, you can share your trading strategies with other traders. Furthermore, you can share them either free of charge or under a commission defined by the platform. For a better income in Social Trading, you do not want to be that much professional. You only need to be talented in making decisions and share them with your followers.
Up to now, you have learned about Copy Trading, its features and the benefits. Let’s look at the dark side of copy trading. Think about copying and applying a strategy of another trader. The situation of the relevant market will not be the same when compared to the time of the pro trader’s application. Results may drive towards a huge loss. Maybe there is a small time lag between the pro traders trade open time and yours causing you losses in your trade. These disadvantages made Copy Trading a little riskier while researching a method of risk-free Forex Trading.
The first step to Trading
Now you know the basics and features of Copy Trading as well as the risks. Let’s take a look into the social Trading platforms available for traders around the world. From hundreds of Social Trading platforms, below list shows 12 most popular and accessible platforms for your convenience. You can individually review every platform and make your decision in starting trading.
World Most Popular Social Trading Platforms
- Zulu Trade
- Naga Trader
- Collective 2
- MyFXbook AutoTrade
- Trade 360
- Tradency Mirror Trader
- FX Junction
If you want to read more about the world’s most popular platforms, please refer World’s Best Social Trading Platforms 2019
All above-mentioned platforms allow you to copy other professional traders but there you face a few limitations and risks. You yourself must take the responsibility of opening and the trade. To avoid these factors, algorithmic trading/ automated trading is the solution brought by professionals in the field of financial technology.
Algorithmic Trading / Automated Trading
To avoid the above-discussed disadvantages and create a trading portfolio that allows you to trade in a risk-free environment, people started to do research on binding computer technology and financial markets together. From the early stages in 1930 to 1990s, many professionals in the financial sector created computer programmes and algorithms. They worked a thousand times faster than the human brain to do calculations and predictions. Even they could automatically open and close trades in Financial Markets. These Computer programmes, algorithms were developed and tested by various investors in various situations. In today’s world, they have created a whole new section in investments called “Algorithmic (Automated) trading”
Algorithmic Trading/Automated trading can be explained as follows. It allows you to give all the decision making and prediction part of a trade to a computer program and wait until achieving profits. These computer programmes/algorithms are created by evaluating many successful trading strategies and they are constantly tested using many parameters. There are no human-related errors inside these programmes. So that the computer programs/algorithms are in the very high potential of offering profits. In the past few years, development of the above-mentioned computer programmes reached an era of creating “bots”. The sole purpose was to earn money through online trading with zero risks in 100% profit gaining situations.
One of the worlds’ most famous Automated trading portfolios is CopyFunds by eToro. As a retail investor, the initial investment in Automated trading portfolios is comparatively higher than other trading methods. In the past, both retail and institutional traders used algorithmic trading. Today, most of the huge financial institutes use this facility in trading very large amounts.
After reading this brief explanation, hope you have learned well about Social Trading/ Copy Trading and Algorithmic trading. Purpose of this lesson is to create a stable foundation about Social Trading, a safer way of trading for all of us. Stay with us to learn more about Forex, Investments and online money earning. We will be back to you soon.