When you deal with social trading in forex or binary options, what you are really doing is imitating trades you see in an online trading community. Essentially, you are ‘copying’ what another trader is doing. But as well as this, the online trading community is a place that can be used as a support system so that if you have any questions or need to check that you’re doing the right thing, you always have somewhere to go.
Through the online social trading community you will discover new ideas, discuss strategies, and generally feel at home with like-minded individuals who have as keen an interest in trading as you have.
The online social trading community is made up of forums, signal services, blog, brokers, profiles, and – something that is extremely popular – platforms that allow you to copy other trades. They are, in fact, specifically set up for this reason, so there is no need to worry; you’re allowed to copy when it comes to trading like this!
Let’s take a better look at the different types of social forex trading you can join in with to give you a better idea of what’s going to work for you.
Signals Or Tips
When you start using online social trading platforms, it’s a good idea to search for signals and tips as these will help you get on the right path. It depends what you’re looking for exactly as to what you will want to seek out, but examples include simple sources such as a trader sentiment indicator which can be seen on a broker’s site or through computer-generated systems.
There is no interaction with other traders when you use signals and tips. It’s purely about searching for something useful and then implementing what you find. This is easy to do, and therefore is popular and can take you direct to market, but you should bear in mind that if you have any questions, you won’t be able to ask the trader about them, so you may not reach a full understanding.
Copy Trading
Copy trading is exactly what it sounds like; it means copying other traders’ trades. Using specially designed copy trading platforms, you can emulate the success that someone else has had.
To use these platforms, you need to choose a trader from the ‘leader board’ set out on the site. Every trade any of the registered traders make will be shown there, and that will give you a good idea of who you should follow. Although there are some controls in place, in the end, the responsibility for choosing who to copy and which specific trades to copy will rest with the new trader. You cannot guarantee your own success by emulating someone else’s trades, although copy trading will certainly give you an advantage.
Forums And Profiles
If you are serious about trading well and you want to learn as much as possible, forums and profiles are a crucial part of your work. This is where you can talk to other traders and gain as much insight – perhaps even imparting some of your own tips and tricks and knowledge – as possible. Using this information, you can work out how to trade in the most successful way.
The platforms to look out for are those that offer full biographical information about each trader. This will help you choose who to interact with, especially as you’ll see their open and closed trades, and you’ll know how well they are doing.
Your broker may even offer you information about the forums they frequent, and it’s always worth asking since there are many of them and finding a good one that offers you real value can be time-consuming. On a good platform, you’ll find potentially thousands of traders to speak to.
Auto-Bots
Technically, auto-bot trading isn’t social trading because the social aspect is removed. What does happen is that you can program these bots to trade whenever a certain set of circumstances are reached.
To have true social trading you do need some element of human interaction, and auto-bots do away with this aspect. On the plus side, there is much less chance of an error happening since there is no human input when auto-bots are trading (and human error is a big reason why some trades fail). Conversely, when there is no human input, trades will be executed no matter what, even if the trader would have preferred to sit it out.