In social trading traders communicate with each other and share their experiences and strategies. Regardless of whether the trader is inexperienced or has been on the market for a long time, other people's knowledge can contribute to even better investment decisions.
One of the leading trading providers eToro recognized early the need for a social platform where traders could access each other's knowledge, strategies and tips. And it did not take long before other trading brokers introduced their own Social Trading sites.
Traders who do not have sufficient knowledge, are new and insecure or simply do not have time to get acquainted with trading can choose to follow another trader's investments in real time and learn the strategy and thinking behind the trader's investment decisions.
By sharing their own experiences, it becomes a win-win situation for all parties as new experiences and ideas lead to new ways of thinking and by learning from other's successes and mistakes you become a better trader. Why repeat the same mistakes others have already made?
Traders who are successful in trading can sign up to be shadowed by other traders and thus become a mentor. The trader shares his knowledge and let others gain insight into his own investment portfolio.
Each trader has his own strategy and market in which he invests and the follower can choose to shade completely or choose only a few parts of it.
When choosing a trader to shadow, it is worth to carefully read through the strategies and critically question whether it is suitable for you. Keep in mind that there are big differences between what risks you are prepared to take when it comes to trading.
At Social Trading, you not only need to follow a trader, but it is also possible to discuss trading and get advice, tips and examples of articles to read. It is always recommendable to share your thoughts and reflections in Social Trading. Knowledge exchange enriches the trading.
The person who is being shadowed or the person who hands out tips and their experiences are not responsible if the investment does not turn out what the follower had hoped for. No matter how experienced the trader is, it is never possible to know one hundred percent how the financial market will react and therefore failed investments cannot be blamed on anyone.
All investments are made at everyone's own responsibility and therefore one should not blindly trust all tips. In order not to lose too much, it is wise to put in a stop-loss that protects your investment to a certain limit.