Politics and Business
Forex Social Trading: Why It’s Ideal for Beginners
Forex trading has been going on for decades, but forex social trading is a relatively new phenomenon in the forex exchange circles. Similar to the way the internet changed forex trading, this new development has revolutionised how people do online forex trading. Unlike in the past where a beginner had to learn everything from scratch for a chance to make money, forex social trading allows him to copy a trade from a more experienced trader. This copying or mirroring of a trade is done in real time.
Understanding Social Trading
Like social networking, social trading involves following other traders and copying their moves in the market in real time. For traders who want to make money in the forex business but have limited time to invest in learning everything necessary to make noteworthy money, social trading presents a great opportunity. It is equivalent to having someone else do the trading for you. Unlike the traditional way of forex trading, social trading takes a shorter time and is cost-effective. It does not involve admin or performance fees that can sometimes wipe out all the money in your account even before you get your way around actual forex trading.
Automated Trading a Draw
eToro, one of the most popular social trading platforms has gained such traction because it allows traders to automate their trades with unmatched simplicity. All a trader needs to know is how to use eToro and they are all set to do social trading in the comfort of their homes or offices. Most social trading platforms work the same way. This ability to automate trades is a big draw to forex traders.
As already mentioned, social trading is a good option for new forex traders who want to start making big bucks right from the start. Here is a number of reasons why forex social trading is the most ideal approach to forex trading for a forex trading beginner.
Relatively Low Start-Up Cost
Some social trading platforms will allow you to start trading with as little as $200. This allows people who would have otherwise been locked out of trading to get started and grow using other people’s experience in the trade.
Social trading allows the trader to diversify his risk. He does not have to be limited to a single provider, making it possible to apply different strategies from a number of strategy providers. This increases the chances of making money while decreasing the chances of losing money.
Compare Your Own Performance with That of Other Traders
As you copy other traders, you will learn your own tricks and how you can make money using your own strategies. Implementing these strategies can give you an idea of how well you are learning forex trading. In time, you will be in a position to determine whether your own strategies are better than those of the traders you regularly copy from, ultimately making you a better trader.
Typically, social trading platforms use real live accounts that have a clear track record of results in forex trading. This means that you can easily determine how likely you are to make money using another trader’s work.
Forex social trading has presented an opportunity that anyone wishing to join this business should consider. There is no reason why you should risk your money on unproven strategies when you can use the work of more experienced traders to start getting returns on your investment faster than you would if you used your own strategies as a beginner in forex trading.