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What is Social Trading?

Social TradingThe other week, I was taking a look at a binary options online broker called MarketsKing that offers a feature called Social Trading. This was something I hadn’t seen before. A cursory search online showed me that there are a few brokers and websites implementing features like this, and that there are also a few community sites that are specifically devoted to it. MarketsKing explains the feature pretty clearly on their site:

Social trading allows traders to share a copy other traders’ limit orders and trades. Trades and limit orders executed by traders that enabled social trading are published on the new social trading wall.

I have also seen social trading referred to as “copy trading” and “mirror trading.”

In short, when you place a trade on a binary options online site that allows social trading, and you have the feature enabled, your trade will immediately be shared with the public. Anyone will be able to view your trading activities in real time, and if they wish, they can mimic you by copying your trade. Some sites may even allow traders to do this automatically so they can copy trades without delay. You also have the option of copying trades by looking at the social trading wall. If you find a trader who makes consistent good trading decisions and wins often, you can take advantage of social trading to follow along and reap the profits right alongside them.

Like anything, social trading has its own set of advantages and disadvantages.

Pros of Social Trading:

Cons of Social Trading:

Other Forms of Social Trading

As I mentioned before, social trading could be said to go far beyond this form of copy trading. This is just one way that traders come together to join their resources, bridge their techniques, and help each other out. Here are other ways you can integrate social trading into your life:

Forum trading is probably the most beneficial form of social trading. Why? It removes the “auto” in auto-trading that makes automatic trading so dangerous, and it gets you more involved in your trading than copy trading through a social trading wall. You have to do more work to keep up with a forum, and you therefore are more involved with your decisions. It is not a matter of laziness to keep up with a great trader and copy trades; it involves work, which then gets your brain involved.

On top of that, forums and chat communities give you a chance to actually talk to the people you are trading with! You can communicate, ask questions, and receive answers that help you to improve your own trading. If someone else is following your trading, them. In conclusion, I think that social trading features like sharing walls on broker sites are great, but what is even better is to reach out and start talking to your fellow traders. Open up dialogue, and see what happens. You will probably see your trading improve by leaps and bounds!

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