Social trading has recently gained a lot of space among the financial alternatives available to those who love to invest online. The reason is simple: it is a system that allows in a short time and even without large capital to try immediately to earn interesting sums. Quick and easy, social trading is a tool that brings even the inexperienced to finance.
What is social trading?
Although social trading is one of the most popular types of online investments on the market now, with online brokers specialized in offering investment in binary options, CFDs, Forex, and ETFs, there are still many tradesmen who do not have a clear conception of how this type of financial alternative actually works.
So what is social trading, and why is it becoming more and more popular with investors? Often viewed with suspicion in the initial stages by traders, social trading actually offers numerous advantages, in concrete terms, as regards investment strategies.
The network works in a very similar way to that of a normal social network, such as Facebook, with the difference that, instead, the elements of daily life, in the case of this particular type of investment, users share the results of their investments with everyone – the other subscribers to the platform. Thus, a system is set in motion that guarantees the opportunity to copy investment strategies in binary options, CFDs, Forex, and so on. Therefore, it also allows amateurs to operate in a reasoned manner on the online financial investment market.
The secret of investing in a social way lies in finding one or more investors who you trust and who you queue up to carry out your investments. Online brokers offering social trading are increasingly numerous. The number of investors who decide to try this new type of trading at least for a period of time grows exponentially, especially through a simple and dynamic trading sharing system.
Why invest with social trading
Social trading is today one of the most interesting types of investments in the online finance landscape. The main motive why more and more investors decide to look for this type of investment platform is connected to the possibility of operating with binary options, CFDs, ETFs, and with all the financial instruments made available by online brokers not in a solitary way, but as a large community that operates collectively.
In this way, the investment responsibilities are divided among several people and even less experienced users can obtain interesting gains by investing their savings.
Deciding to invest through the online brokers who operate with this financial instrument means, to some extent, replacing the uncertain advice of friends or acquaintances who declare themselves experts in the financial sector (often without really being one), with the financial strategies of users whose investment path is public and of which it is possible to view trends and actual success rates.
Social trading, therefore, allows traders to access investment platforms that do not offer cold financial news on the basis of which to develop their own financial strategy, but real data on performance and results obtained by users most capable of orienting their trades on the binary options, CFD, Forex market.
How to invest with social trading
To invest using the social trading method, simply open an account on a platform that offers financial services and that uses this type of trading. Obviously, as we will also see later in this article, it is essential to make sure that the trading company is serious and reliable both from a legal and commercial point of view.
Once the account has been created and the money deposited, it is time to analyze the statistics of the users already registered to understand which investor, among the shared results, could be followed. In general, online brokers usually offer the possibility of viewing a ranking of traders, often divided by type of financial instrument. Whether it is investing in binary options or trading in CFDs or Forex, it is therefore easy to identify the investors who are making good profits.
The next step is the one that distinguishes social trading. In fact, it will be necessary to select a user and copy, manually, or by authorizing an automatic trading system, the operations of the reference trader.
The advantages of investing with social trading
Social trading is one of the innovations of contemporary finance, a cutting-edge tool that allows, through online brokers, the interaction between users who collaborate by developing shared investment strategies in the field of binary options, CFDs, Forex, and of numerous other financial instruments.
As we also wrote above, the popularity of the platforms has dramatically increased over the last few years, mainly in relation to a series of concrete advantages that traders looking for good online investments recognize in this shared finance system. Here is a brief overview of some of the advantages related to investing through the so-called shared finance.
- Social trading platforms accelerate investor learning:A long learning process is required to make money with online finance. You need to be familiar with technical analysis and the ability to interpret market movements.Learning by yourself means investing a lot of time in training, without, however, the guarantee of actually being able to develop the skills to put together an investment strategy that is truly functional to your needs. In this sense, this financial tool eliminates any problem, allowing you to invest through financial platforms by learning from experienced traders and studying their market strategies. In this way,
- Social trading allows you to earn by investing online immediately:Usually, when you are a beginner, it is challenging to be able to earn immediately through financial investments. On the contrary, platforms offer the possibility of increasing their capital even for inexperienced investors.
- Collaboration in investments with online brokers:Another notable advantage of the platforms of this investment alternative is the possibility of collaborating in real-time with other investors who use the online investment platforms. Before the advent of the Internet, the time of financial trading did not allow traders to exchange ideas and effectively evaluate overall market movements. The transition that brought financial investments to the web has instead allowed thousands of traders around the world to develop collaborative synergies. In this way, not only is training carried out in real-time, but it is also possible to discuss financial strategies.
Criteria for evaluating a social trading broker
The fundamental criteria for evaluating a broker are the same as for investment platforms dealing with binary options, CFDs, and Forex, namely, on all, safety, quality of service, customer support, and web functionality.
The legal aspect is undoubtedly the basis from which to start any reflection on the seriousness of an online financial operator. If you are not sure you are dealing with an online broker that offers a transparent service and protected from any scam attempt, it is impossible to set up a serious and long-term financial investment plan.
Obviously, when we talk about security, we mean the set of protection measures and compliance with current regulations that a platform should always keep as an absolute reference for its commercial offer. In this sense, we will deepen in the next paragraph all the details related to the legal aspects that every online broker must necessarily fulfill to meet the minimum operating requirements.
How to choose a good and reliable social trading broker
Once we are sure that the chosen investment platform complies with the legal regulations, we can move on to the commercial part in order to understand which is the best broker on the market, based on our needs.
Not being duped by bonus offers is essential. Often the proposed benefits and promotions have the sole objective of convincing users to register with the financial intermediary. Therefore, it is better to evaluate the technical characteristics first, leaving bonuses and discounts in the background. To avoid the uncontrolled growth of unclear promotional proposals, the CySEC authority and most of the national bodies that regulate the market have decided to limit the possibility of offering welcome bonuses to new customers so as to re-stabilize the market. So, we reiterate the need to pay attention to all the bonuses proposed: the best platform is not the one that offers the highest bonus always.
To invest in security, you need to rely on online brokers that use dynamic and intuitive interfaces. In fact, these are the characteristics of a serious and good level operator, able to range between all the most important financial instruments: binary options, Forex and ETFs, must be available at all times both from desktop and from application.
Social trading is undoubtedly and ultimately an investment strategy that we feel we can recommend without any doubt, both for more experienced users and for those looking for online platforms through which to start investing from scratch. The important thing is to pay attention to fraud attempts and rely on serious and transparent online brokers, with a solid regulatory structure, a high level of web functionality, and a wide commercial offer.