Social trading is a relatively new but popular phenomenon in the financial world. The secret to its popularity is simple: it brings online trading to the masses, allows them to interact with each other, use the wisdom, experience and knowledge of thousands of other traders and even turn experienced traders into their so called mentors.
Online social trading has revolutionized the decision making process of investors. Technical and fundamental analysis have been reinforced with insight and collective knowledge sharing. More and more investors rely on collective wisdom for their decision making and act according to the community's advice.
The most important aspect of social trading is the copy trading function. This function allows traders to copy the activity of other members from the network. This absolute transparency and sharing between members of the community is where the real appeal of social online trading lies. It allows anyone to monitor, follow and copy the activities of other traders from the social network. You can watch other people's successes, and then copy them selectively or entirely by adjusting the degree of risk you are willing to take.
The advantage is very clear: inexperienced investors can operate in this otherwise hard to access world, with the help of the experienced investors, usually free of charge. It is ideal for those who feel that they don't have sufficient knowledge to operate in the market on their own, or even experience traders who are in need of an emotional "recharge" after a period of losses.
The social networks will even go the extra mile to facilitate this type of activity.
eToro, for example, which is the leader in this field, provides information about each member's profits or losses, number of followers and copiers and even level of risk.
Its advanced members' search function will help you screen the results according to their country of residence, the financial markets they operate in and their profit during various periods of time.
By now we have all understood the advantages copytrading offers novices. But the big question is – what does it offer skilled, successful traders? Why should they allow others to copy their actions? the answer is very simple. They get paid for it. eToro, for example, pays traders who get copied a 25%-30% revenue share. Popular investors can also get cash fixed monthly payments and spread rebates. So you see how everybody wins.
If you also want to enjoy the advantages of social online trading, go to any of the brokers of the list in this page and get started.
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