Not everyone is familiar with the term social trading network, but more than likely you have either used the concept in the past or are doing so now. It is simply a type of investing where you watch how your peers or trading gurus work. You not only learn from them, but you actually copy or mirror their trading behaviors. In this way, you don’t need to know everything about the market you’re investing in or spend the time it takes to become an active trader. While it is a common way for newbies to learn the tricks of trading, some investors rely strictly on social trading networks to place trades.
How Forex Social Trading Networks Operate
While it might sound immoral to copy the trades of others, it does work well. It’s actually a two-way street because the concept has been organized into official networks. Both investors and traders have the opportunity to find one another through these networks. For a set fee or a percentage of profits, you can tag along with a pro and take advantage of profitable trades. So whether it’s to learn from a professional investor or to cash in on an investor’s successes, it’s a win-win. Additionally, it helps bridge the gap between the new traders and those who are very successful.
Unlike managed accounts, social trading networks are transparent in that they provide a platform where traders share ideas, follow signals, evaluate charts and market direction. In this open platform, traders discuss market knowledge and they allow other traders to copy what they are doing. In fact, it is a collaboration of sorts, with the joint goal of succeeding together. There are many social trading networks available, but they each play by their own set of rules. For instance, some of them only use mirror trading. Some of the other open platforms give a greater degree of flexibility or more intensive communication between the traders. Even with all the pro-talk going around, you should never take what you hear for granted. Check into the trader’s profile and carefully review that trader’s past history. Try to locate those traders who have established themselves as knowledgeable and have several years of success in trading.
Joining a Network
Forex brokers can lead you to the trading platforms that are available or you can go the third-party route. There are service providers where you can sign up for copy trading, mirror trading, trading statistics, signals services or market analytics. With a forex trading account that has been funded, you can join a social trading network. If it’s a third party platform, you might be required to join their live trading account with a specific social. However, it is wise to be cautious here. When you are ready to open your own social trading account, make sure to go with a regulated broker that will support this.
In short, you can learn about successful trading styles, tips and tricks through social trading networks.