Social trading is redefining trading
Thanks to bionic advisors, my investments (better read) as long-term wealth is taken care off! But who doesn't want some quick profits, higher returns? By now, you would have guessed that I am talking about stocks, stock trading, to be precise. Here's my stock trading story. Before putting my money in stocks, I decided to seek guidance from my colleagues who have been trading for decades now. Unfortunately, they weren't interested in sharing their strategies with a debutant trader. So I began researching on the Internet to understand the stock markets better and that's how I stumbled on an interesting new concept - social trading.
In a nutshell, social trading is a mechanism of bringing together traders across the globe into one big network and providing traders the option to leverage trading techniques and strategies of other traders. Unlike the old school of thought on trading where trading strategies were closely guarded secrets, this new trading concept allows traders to follow or even blindly copy trading strategies of top investors.
Social trading is being considered as the next big phenomenon in the capital market. The social trading platform is a vast ocean of information, available for free for any trader. The perpetual data flow enables traders to make profit out of trade even if they don't possess any erstwhile information or experience on trading. Thus, it seems to be the best choice for traders especially, novice traders. And it helps the top investors get some extra pounds by sharing their trading skills.
On realizing that social trading is the best option for me, I started looking for a viable social trading system. Interestingly, I found that fintechs are extremely active in the social trading space. Though investment banking had been sort of opaque to fintechs, the rising wave of social trading is seeing lot of traction from fintech firms such as ZuluTrader, eToro and StockTwits. Currently, ZuluTrader is the largest global social trading network with the highest number of traders and investors. StockTwits, on the other hand, is a social communication platform that uses tweets for trading while eToro aims to help novice investors. Other well- known players in this space are Ayondo, Tradeo, SignalTrader, and more.
I glanced through a few of these leading platforms and found that the instruments traded on these platforms are quite widespread, covering stocks, forex currency pairs, gold, silver, commodities, indices, oil, etc. These platforms are quite user friendly and most of them include a live feeds feature, giving higher visibility on the trading operations of all traders. After viewing the feeds, based on my choice and requirement, I could "follow" the top traders / investors. Then if convinced, I could blindly "copy" the trades of those leading investors - essentially, allocate a portion of my funds to the selected investor / trader and their trades gets automatically copied, making my life easier and richer. Interestingly, some of the solutions even enable the traders to get in touch with the topline investors directly to clarify their concerns.
Social networking worked and is thriving, will social trading see a future? Actually, a lot of action is already happening in the social trading arena - many firms, especially, fintechs are entering this dynamic and active space. Firms like Ayondo are spreading its wings to growing markets like Asia, local regulators across the globe are showing profound interest. All this indicates that social trading is bound to stay and would definitely be the resort for the tech-savvy millennial who prefers fast and smoother trading experience. However, the sustainability of the concept depends on how well the knowledge of traders can be applied or tweaked to the likes of the other traders.