Is Social Trading For You? Here’s how to judge it
Social trading has been one of the major developments in the securities field of late, especially for those new to the securities markets. You may have heard of social trading or its distant cousin, the copy trade. The latter is sort of a subset of the former, but copy dealers are more likely to be tied to a rigid way of doing things.
This is the main difference between what most people call social trading and copy trading. Those who participate in social trading websites, forums, chat rooms, and formal clubs are more open to using and adapting the ideas and expertise of others. When you are a copy trader, you are just doing exactly the same thing as the person you are following, which leaves little room for creativity and adaptation.
Social trading forums, many of which are included on broker websites, are where people gather to discuss all kinds of strategies. The main benefit for newbies is the opportunity to learn from experts, test some of the techniques people talk about, and even team up with large groups of traders to try to bulk buy or sell the price of a particular security influence. What Kinds of People Are Best for Social Commerce? Here is a brief overview of whether this new form of buying and selling securities is suitable for you.
You want to learn new techniques
If you tend to be an open-minded guy who likes to listen and learn from others, social trading might be a good choice for you. If you want to get started with trading copies, it is entirely possible to duplicate an expert’s purchases and portfolio additions. Copying implies buying and selling the same security at the same time, not necessarily in the same quantities. Many social trading enthusiasts are copy traders. After a few weeks or months of copying, they develop a desire to learn a few new methods. From there, they usually venture into one of the many social trading chat rooms or other such rooms.
Chatting and online discussions are part of your skills
If you already participate in various topic discussion groups on social media websites, joining social trade groups is a given. If you are new to the give and take of online conversation, you will likely discover a new way of interacting with other people who have a common interest.
You are ready to make corrections
If a new strategy doesn’t work as planned, can you change course? If so, you are a good candidate for social trading. This is because much of what goes on on the forums relates to theories and experimental techniques. They try a few new methods, sticking to those that work and rejecting those that don’t.
They are not devoted to any particular style or theory
If you are solely devoted to a particular theory or style of investing, social trading may still be able to help you connect with others who share those beliefs. In general, however, the social trading groups are open to all kinds of concepts, ideas and approaches.
Making a profit is your overall goal
In many forums where hundreds of people are discussing their favorite strategies, you will usually find that there is one common theme and that is a willingness to try anything that is profitable. In a way, this is capitalism at work, an interactive meeting of different systems that have one goal, which is to make money.
Disciplined, emotionless decisions suit your personality
In the trading universe, emotional decision making has a very bad rap. When human emotions become embroiled in profit and loss issues, the outcomes are almost invariably negative. If you want to adapt to the social trading niche, it helps to leave emotion-based techniques behind. People want to learn from others, but are almost always looking for objective, level-headed ways to choose stocks that can improve their financial position.
You know how to ask questions when in doubt
It is important to be able to ask questions whenever you hear something you don’t understand. This helpful skill is vital when it comes to your capital. While on forums, never hesitate to ask someone what a term or concept means if you don’t understand it. How you combine these two technical indicators and what Average Cost in Dollars mean are just two examples of the kinds of questions you should always be happy to ask. The whole point of a discussion forum is openness, exchange and dialogue. Never be afraid to make statements or ask questions of others.