Social trading in the Forex market is the practice of copying the trades of other traders through the social media community. The trading community can be used as your personal support system and as a place to get ideas and discuss your own strategies. For social Forex trading, there are many different ways to communicate with other traders, including forums, profiles, blogs, signaling services, brokers, and special platforms that provide copying capabilities. All of these forms of social communication help traders of all levels to interact with each other and improve their trading strategies.
Social Forex trading offers a unique advantage for novice or nervous traders. It allows them to follow others and communicate with a more experienced trader as they trade. Social trading also offers clear benefits for more experienced traders as it allows them to become leaders in trading and profit by gaining more and more followers. Whether you’re a beginner or an expert, it’s a good idea to sort through the various social offerings available to find a comfortable place in this new and exciting world. Here are some of the more popular types of social trading platforms.
Signals or hints
If you’re just getting started with social trading, look for signals and tips to show you the way. They can come from simple sources, such as the trader sentiment indicator posted on a broker’s website, or from very complex computer systems. There is not any interaction from this type of social trading here, and you may not fully understand what you are seeing because you cannot ask the trade leader. But with the help of signals or clues, you will get a direct market position that you can follow if you want.
Copying trades is just copying the actions of other traders. There are copy trading platforms that allow you to copy another trader and repeat their success. You select a trader from the leaderboard, which publishes information about every trade that person makes and that information is entered into your account. Restrictive controls control your account, so you don’t blindly spy on someone, but all responsibility lies with you. Copying is an easy way to trade without worrying about making your own choices, because all you have to do is choose the trader that suits you best and copy them.
Forums and profiles
Forums and profiles are very important to you if you want to become a serious social trader, and they can be an interesting part of social trading. Forums allow you to chat with other traders, and profiles help you find out who they are. The best platforms will provide complete profiles with biographical information, trading style details, and a count of open and closed trades.
Most brokers offer forums for account holders, and often you can enter discussion rooms in other public forums. A good forum will have hundreds if not thousands of active users, and you can join those discussions of your choice, such as strategy, tools, tips and predictions, and more.
Technically speaking, trading with automated bots is not exactly social trading as it removes the social aspect of trading. Autobots are robots that are configured to execute trades when a specific strategy or pattern is triggered. While social trading requires traders to complete trades, automated trading does not require human supervision at all. The system generates a signal and then automatically enters it into your account. There are a few fairly simple automated systems, but there are also fairly advanced versions that can interact with your computer and account without any problems. The advantage of Autobots is that you don’t have to worry about human error. The downside, of course, is that you lose human control so that trades are executed even when the lead trader (or programmer) may have wanted to cancel the offer.
When choosing a social trading platform, always look for a platform with strong account controls. These can include the amount you make on each trade, the total amount of losses allowed for each tracked trader, the amount of time you track the trader, and what assets you will follow. As with any platform, the degree of control will vary from broker to broker and platform to platform, but the more controls available, the better you can manage your money, and this is the most important aspect of trading for both newbies and experienced traders.