eToro was the first broker to introduce social trading network called eToro Openbook. Many other brokers trying to imitate them now by offering similar features on their platforms but I consider eToro is still the leader in this space. You can read in depth eToro Openbook review here.
The idea behind creating social trading platform was “what if you could bring the advantage of the wisdom of many traders in a collective format to make fundamental investment decisions?”
Sounds great right? This would surely translate into an “auto trade” option that could work wonders and help you decrease the risks of loss in major trading decisions.
This is what social trading is all about – Connecting on a global network with traders and investors around the world, following their ideas and experiences and using them to make your own investing decisions.
This “See, follow and copy” approach is a golden key to success, especially for newer or less-experienced investors on the block. And for those who are already on a high track, a little extra wisdom, skills and expertise from the other masters of the trade never goes waste!
The Need of a Social Trading Platform
Similar to social media platforms like Facebook that let people with similar interests share their ideas, a social trading platform brings professional traders, followers and enthusiasts on a single platform to connect, interact and share. Through these platform traders can
- Share information, relate experiences and read latest news
- View and analyze the performance of different traders
- Copy the skills and trades of other traders to your account
This advantage of not only seeing the skills but ACQUIRING them is the factor that makes these platforms a true success. The concept of a social trading network removed the need for physical availability, enabled easy access to relevant information, smoothed out the process of research and analysis and shed a light on the feasibility of a chosen mode of financial trading.
Social trading platforms are classed as a subcategory of other online social websites on the internet. This means that what Facebook is to a teenager, eToro social trading is to an investor.
The Key Concepts of Social Trading
Social trading is a new trend in financial marketing and its formation has greatly facilitated the process of online economic trading by providing a social network for traders on the Internet.
Before the introduction of the Internet to the financial market, traders and investors had to do extensive research and analysis about the profit and loss margins and feasibility of investments or trading through techniques that provided results at a very fundamental quantitative level.
The “See, follow and copy” approach is main factor that defines the success of this technique as it is beneficial for both beginners and seasoned pros.
Advantages of Social Trading Platforms
There are dozens of advantages and benefits of creating a portfolio in a social trading platform. Some of the main points are discussed as follows:
Different traders can invest in a particular position, for example a forex currency pair, and they can invest on it collectively. Thus your performance and earning are dependent upon the performance of those traders that you follow and invest with and not on the overall market situation. Social forex trading is a promising and profitable opportunity for new traders.
You can also share your trades with fellow peers on the network, and the more people who copy and follow you, the more your sales and earnings will rise!
How is it Gold for Beginners?
Beginners in the trading industry can look up to market trading giants, learn from their experiences and copy their skills and expertise to carve a safe and profitable way for them. In addition they can also get guiding tips and advice from seasoned traders.
How is it Gold for Experienced Gurus?
For experts and experienced gurus, nothing can be better than gathering followers and building a strong portfolio. Social trading sites are also a great resource to find new opportunities and making them work in your favor. And what’s more, the more copiers and followers you have, the more money and recognition you will earn!