The world of trading is advancing all of the time, and one type of trading that has become very popular in recent years is social trading. Social trading can help you to deal with a number of challenges, for example, the difficulty that comes with staying up to date with all of the latest trends, reports, and news events impacting the business world. Keeping that in mind, continue reading to discover everything you need to know about it.

Understanding social trading
Social trading is pretty much like a social network for traders. The only difference between the likes of Instagram and Facebook is that you won’t be sharing lunch photos or selfies! Instead, you will be sharing and following trading strategies and suggestions. Here, traders will brainstorm on market situations, watch the trading results of other professionals, and interact with one and other.

What are the benefits associated with social trading?
There are a number of different reasons why social trading makes sense. This includes the following:

Quickly grasp the trading market - For beginners, social trading platforms give you the ability to lower the cost and duration of becoming a pro-investor, as you will be able to efficiently and quickly learn from seasoned investors.
Gain fast access to a reliable trading medium - Social trading platforms cut down the amount of time that you will spend looking for a reliable trading platform by giving you access to a wealth of information from more experienced traders across the globe.
Access a community of investors - Social trading platforms are also beneficial because they create an investor community. You can collaborate on other ventures while also sharing information and discussing the market with people you like and trust. Who wouldn’t want to be a part of this while trading?
Earn and learn at the same time - Social trading also gives you the ability to earn some money by copying the trades of more successful investors while still learning from them at the same time. This is why it makes a lot of appeal to people who are just starting out or feel like they have gaps in their knowledge.

Why would investors share their secrets?
You may be wondering why other traders would want to share information on their strategies. Well, there are two key incentives at play here. The first is status. The second is money. These are the two motives for sharing information about your trading strategies on social trading platforms, and we are sure that you will agree that they are pretty compelling, hence why a lot of traders decide to share their secrets on such platforms.

So there you have it: an insight into social trading and how it works. If this is something you are interested in, the key lies in finding the right traders to follow. This is going to determine how effective social trading is for you. The good newsies that most social trading platforms will have leaderboards, so you can easily assess the success of those who share their secrets.

By Sumeet Manhas

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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