Important For Beginners! Learn More About Social Trading
Social Trading – Being a beginner trader must certainly be a little extra when going to learn about forex trading. Because you will find many terms that must be understood, for example social trading. What is social trading?
Because social trading is a well-known term and appears after mirror trading and is a continuation of trading copy, before discussing further about social trading, for beginners who do not know it is very important to know what is mirror trading and copy trading.
Not a few traders who think that mirrors and also copy trading are the same thing, whereas in fact these two things have differences.
Mirror trading has emerged since 2000 as a result of algorithmic trading evolution. Initially mirror trading was only provided for institutional class traders, but later developed and could be accessed by retail traders. Its nature is automatic so trading decisions will not be triggered by emotions.
Traders who use mirror trading will use the platform provided by the forex broker to perform historical checks and details of many trading strategies, then choose one of the strategies that are available to be applied in the trader account. When making the strategy it will certainly execute the transaction, then the trading positions that have been created will automatically be copied by the mirror trading account and also by the followers.
Whereas copy trading is a new technology that applies to the social trading context and will appear and follow mirror trading. Both platforms will equally allow traders to automatically copy trading positions opened and arranged by other traders, but the fund control settings will be different.
Simply put, copy trading means money management for funds of followers who will be connected to the pro trader funds that they have followed, while mirror trading will only mimic the strategy.
Continuing again on the term social trading, this term will refer to a system that will be used by investors in the financial market to be able to rely on content that has been collected using certain applications.
This is done in order to be able to obtain information that will help to make a decision. The view that will be given is also different from the other systems.Social trading will present the latest ways to analyze financial data by providing a basis for comparing and copying other strategies. Simply put, social trading is a kind of social media that is similar to Twitter or Facebook, its contents are ideas and also trading advice from traders.
Based on this explanation, it can be concluded that social trading is almost similar to a very large network and in it there are many successful and professional traders and follower traders.
So it is also clear that social trading will take the form of a platform, but the form of the platform will be in a different position and will depend on the facility provider. In addition, of course each will have a function as one of the media traders so they can conduct discussions and exchange their trading experiences.
The Beginning of Social Trading Development
At first, this social trading emerged and was only known as trading copy by traders. But along with the development of social trading, then the turnover ensued. Finally a platform appears that cannot always be connected and provided by brokers.
For example, trading view, this system is considered to help free traders all over the world so that they can do social interactions by drawing and sharing ideas about trading. There is also SIRIX which has the main benefit as one of the software similar to metatrader4, but at this time metatrader4 has integrated social technology and can be adopted by all traders.
Characteristics of Social Trading
Similar to most platforms in general, social trading also has characteristics that can help you to differentiate from other platforms. There are the most characteristic characteristics of social trading.
The most superior characteristic is being able to share information with many traders very freely. In social trading, traders can work together, because everyone in the network can share trading information or even be able to do research together online in order to obtain trading conditions that are equally beneficial.There is a monetization that can be done either by working with brokers or by providing premium information and tools services for each member.
Everything will be transparent, because each trader has an open nature when sharing information with other traders. These characteristics will make social trading as a place or place that is very important for beginner and even professional forex traders. For beginners, social trading can be used as a place to learn and listen to signals and analysis carried out by professional traders.
Although it has benefits that are good enough for many traders, but do you know?Apparently social trading also has weaknesses. The weakness of social trading is that there is a time gap between the information received by the trader and the following trader. This time change will not only be one way of execution that will always be simultaneous, but it will also allow significant changes when the time difference has occurred.
That is the discussion about social trading, the advantages and disadvantages of social trading, of course you must understand so that you can interact well online with other traders.