The social trading is a new investment model that is based on connecting a user community where the most advanced traders share their strategies and beginners can see, follow, learn and copy the most successful investors.
This model incorporates the basic foundations of social networks but applied to the world of trading . We are in a social world, in which we live connected to the Internet practically permanently, relating to other people who share our hobbies or interests and being part of a community. The social trading is a way of connecting traders from around the world who can share their strategies and discuss them with other traders.
For a beginner you have the great advantage that you can follow experienced traders, analyze their strategies and copy their trades to profit by taking advantage of the experience and knowledge of people who have already spent much more time investing . Due to this possibility of copying the operations of other traders, social trading is also called as copy trading .
The social trading is becoming very popular worldwide in recent years. That is why more and more online brokers offer this service that allows experienced traders to share their strategies and receive commissions that increase the more followers receive and beginners can find the best traders that fit their risk profile and easily copy The operations with the amount of money they deem appropriate.
The online brokers that offer social trading are usually in charge of developing rankings of investors who share their strategies and generate a series of complete statistics to know the results they are getting.
HOW DOES SOCIAL TRADING WORK?
1 - If you want to start investing through social trading the first thing to do is to select an online broker that offers this service.
2 - Next you will have to create your account with this broker . Generally you will have to fill out an online form and send a proof of identity (dni, passport, driving license) and a proof of address (a recent service bill such as light, water or telephone showing your address) . You can then make your initial deposit of the amount with which you want to start investing.
3 - Once your account is created the following is usually to complete your profile on the social trading platform in the style of what you would also do in a social network.
4 - The next thing is to help you with the rankings and advanced search engines offered by your online broker to locate traders with the best strategies and that fit your risk profile.
5 - Once located, you can follow these traders , see the operations they perform and analyze their results. If you want to copy your trades you usually have to indicate how much money you want to do and automatically the trader's operations you are copying will automatically be applied to your trading account with the online broker.
At any time you can stop following a trader or stop copying your trades . You also have the possibility to opiate several traders at a time so it is a good way to diversify the risk.
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