Social trading broker eToro has announced today that it has reached 50 million trades and 2.75 million traders on its social trading network, since launching the product in 2010. Since pivoting to become a social trading only focused firm, from its previous incarnation of traditional brokering with an interactive platform , eToro has paved the way for social networks among other brokers.
There is no doubting the importance of social trading in the forex industry. It provides an engaging platform for users and most importantly lowers the barrier of education for traders. As written about previously on Forex Magantes, copy/social trading is becoming an increasingly essential feature for brokers with large affiliate networks, as the product can lead to more stable revenue streams for partners.
Today’s release sheds some more light on the social trading. According to eToro of the 50 million trades on its social network, 32 million (64%) were copied trades. They also reported that trading leaders, tended to become more risk averse and stated “A very interesting take out of this study is that traders with a large number of users copying their trading activity, are adapting their trading strategy from high risk to medium risk and lower. This is what we describe as the responsible social trading phenomena.” They added that 80% of positions were held for “an unexpected” average of 13 days and were traded with ‘medium risk’.
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In addition, eToro posted an infographic with more details of their network. Some highlights include:
- 79%/21% Male/Female distribution
- Europe is the network’s top continent, with 49% of traders living there
- 13% of trades originated from mobile devices
- 73% of trades were placed during European market hours
- The 25-34 year old demographic was the largest group using the network, accounting for 34% of users. More interestingly, they reported that 13% of traders were 65 years or older
Commenting on the news, Yoni Assia, CEO and Founder of eToro stated “it confirms that our users crave a simple yet innovative way to access and invest in the financial markets.” He added “this is best reflected by the readiness to copy the trades of any other user in the network.”
While there is no doubting the success of copy/social trading, with nearly every broker having launched some sort of similar product to eToro, it begs the question ‘what is the next big thing in the industry?’