Getting started in a new industry is challenging, to say the least, and even more so if it’s in the trading sector.
There are numerous trading rules to consider, technical and fundamental analyses to run, and it goes without saying, but it can all get overwhelming.
However, thanks to brokers’ unique features like social trading, you don’t have to do everything on your own.
If you are a new trader, we have prepared this article to shed light on what social trading is.
You will also understand the benefits it brings to your activities, thus deciding whether it is worth trying in 2023.
What Is Social Trading?
Social trading is a form of trading whereby like-minded traders get to connect with each other on a broker’s platform to share different ideas.
By learning from your peers and experts, you get to make better trading decisions based on in-depth trading conversations on brokers’ chatting platforms.
Keep in mind that while some brokers allow social trading, others support social and copy trading.
This way, you get to follow traders with the best ideas and mirror their strategies on trading platforms in the United Kingdom.
For instance, eToro is one of the best brokers in the UK that hosts a highly-rated social trading platform.
Using it allows you to also benefit from copy trading, thus maximising your potential in the financial space.
Simply put, social trading makes your trading activities easy and convenient. All you have to do is create a trading account with a broker offering the social trading feature, and you are good to go.
Remember, traders are investing against the market and not each other. They are incentivised to share information and opportunities about the industry to help them make the most of their time in the market.
Therefore, social trading is a way people explore the financial markets as a collective other than on an individual basis.
Pros Of Social Trading
1.) Eliminates Emotional Trading
If you’re quick to your emotions and tend to allow your feelings to influence your trading.
In this case, social trading can enable you to separate yourself from the decision-making process by relying on those of others, hopefully, better than you.
Furthermore, you don’t have to worry about keeping up with market conditions, although it is paramount for increased profit potential.
2.) You Need Little To No Market Experience
Traditionally, you had to take time to learn the ropes and get familiar with the trading instruments and strategies you wanted to use.
Today, social trading allows you to trade profitably without any prior knowledge.
You can follow what expert traders are doing on their accounts and share in their success and losses at times.
3.) A source Of Passive Income
Social trading allows you to fund your account and connect it to a trader’s account with excellent trading acumen, allowing you to earn a good passive income with little to no input on your part.
This can enable you to concentrate on your job or other life-related tasks knowing that your investment activities are going on well.
4.) Convenience
When social trading, you not only don’t have to do most of the hard work of market research and finding trading opportunities, but you also don’t have to worry about adjusting your strategy as market conditions change.
The ideas you learn from your peers are enough to guide you. And if you aren’t pleased with other traders’ performance, choosing and following new traders is easy and only takes a few steps.
5.) Cost Effective
Fortunately, many trading platforms that offer social trading services don’t charge a fee to mingle and share various ideas.
As such, you don’t have to worry about extra costs while trading in the UK or elsewhere globally.
This makes it easier for low-budget traders to join the financial space and still get an opportunity to earn profits with their little capital.
Final Takeaways
Social trading continues to benefit many traders in the financial industry, thus helping them make the best trading decisions.
Remember, while social trading can help you earn profits, do not completely rely on other traders’ ideas.
Instead, conduct additional analysis and market research to ensure you make the best decisions.
It is also advisable to share your thoughts regarding various trading activities with your peers to help others avoid making common mistakes.