What is social trading?
When we hear the word social the first thing that comes to mind is most likely to be Facebook, Instagram, TikTok, Twitter and so on. But what if there’s a similar social platform specifically built for investors? A platform that allows investors and traders alike to communicate their investment ideas and execute trades, all in one. Well the great news is there is, and these platforms are known as social trading platforms. Through social trading investors my not only discuss strategies, stock prices, and projections, but also copy other people’s trades automatically. The beauty of social trading platforms is that you don’t have to be a professional investor to invest successfully, you can simply copy the trades of a professional individual whom you believe in. Isn’t that wonderful?
Where do you start social trading?
200 AED Only
And access:
• Social Trading
• Copy Portfolios
• Over 2000 Markets
Advantages of using a social trading platform
- Take decisions based on other people’s insight
- Use other investor’s experience to your advantage
- Ideal starting point for newcomers
- Diversify your portfolio by investing through other investors
- Share your opinion and influence others
Social trading platforms
As briefly mentioned above, social trading platforms are online website that support social trading. Social trading nowadays comes in varies shapes and forms. These are some social trading features which some of the most established platforms offer:
- Automatically mimic other people’s opening and closing of trades in proportion to your investment. Example, if you invest $200 behind Tom, an investor with a successful track record which you believe in, and Tom invests 15% of his portfolio in Apple stocks, the platform will automatically invest 15% of your $200 investment in Apple stocks.
- Copy a pool of investors as if it’s a collection of stocks
- Publish and read posts that tag a specific stock or market
- Share your thoughts, ideas, and portfolio with others
What differs a good social trading platform from a great one?
The answer to this questions is very straight forward, the people onboard that platform. Would Facebook be as good of a platform if very few people used it? The answer is obviously no because it’s based on social economics. The first and most important factor of a social trading platform are the investors and the traders onboard the platform. The second factor is of course the platform itself which takes into account the fees, market availability, liquidity and plenty of others factors which we cover in our “Best online trading platforms” page. Last but certainly not least, it’s how user friendly the platform is. Remember, this is social trading. What’s the point of having tens of thousands of markets for very affordable fees, if no one understands how to use the platform, let alone set up automatic trading with their hard earned cash.
Are there risks involved with social trading?
The straight forward answer is, yes, there are risks involved. However, if you’re wise and instead of placing all your investments in one basket, you diversify, and spread the portfolio across several investors, the risk will be less. This is not financial advise, but diversification helps. The idea is instead of simply investing in stocks, ETFs and Indices, you also place a portion of your funds to follow the performance of investors with a successful track record.
