Social trading in forex or binary options is the practice of imitating other traders’ trades found through an online social trading community.
Also, traders can use the trading community as their personal support system and as a place to learn ideas and talk about strategies.
There are plenty of different ways to communicate with other traders through social forex trading – like forums, profiles, blogs, signals services, brokers, and particular platforms providing copying abilities.
The forms of social communication help every trader interact with each other and enhance their trading strategies.
Social forex trading has a unique advantage for new or worried traders. It lets them follow others and ‘hold hands’ with a more experienced trader over the trading process.
In addition to that, it offers distinct advantages for more experienced traders as it allows them to be trade leaders and profit by recruiting more followers.
From newbies to experts, it’s better to determine the different social offerings available to find a comfortable place in the industry.
Signals or Tips
For traders starting in social trading, search for signals and tips to see the right way. And these can be found from simple sources like a trader sentiment indicator showed on a broker’s site or emanated from very sophisticated computer-generated systems.
People won’t see any kind of interaction from this sort of social trading. Also, they may not completely understand what they see because they can’t ask the trade leader.
However, with signals or tips, traders can get the direct market position to follow if they want.
Copy trading is the act of copying trades of other traders. Some copy trading platforms enable traders to copy another trader and echo success.
They pick a trader from the leader board where every trade the person makes goes into the traders’ account.
Restrictive controls monitor the accounts, so they don’t follow someone blindly. But still, the overall responsibility is in the trader.
Copying is a quicker way to trade without the concern of making choices as they all need to do is choose the trader that seems to be the best and copy it.
Forums and Profiles
Forums and profiles are essential if traders aim to be a serious trader and be the fun part of social trading. Forums lets traders talk to each other while profiles help in getting to know them.
The best platforms will give full profiles with biographical information, details about trading style, and a tally of open and closed trades.
A lot of brokers offer forums for account holders. Most of the time, they can enter the discussion rooms of more public forums.
A good forum consists of hundreds, if not thousands of active users, and traders can join the threads of their choice – such as those dedicated to strategy, tools, tips, and forecasts.
Auto-bot trading is not really social trading. It gets rid of the social aspect of the trade. Also, these are robots that make trades every time a specific strategy or pattern becomes triggered.
Social trading requires human traders to execute the trades, while auto trading bots do not need human monitoring at all. The system generates a signal and automatically executes it into the traders’ accounts.
The good thing about auto-bots is that traders don’t have to worry about human error.
However, people lose human monitoring, meaning trades are executed even when the lead trader might want to override the suggestion.