“Bitcoin millionaires”, “GameStop craziness” are familiar online and offline headlines these days. Investing and trading seem like the way to increase our income and make the best out of our savings. But how is it possible to invest successfully without spending hours and hours on end analyzing the markets? One possible solution is Social Trading! What Social Trading is and how you can start your trading journey are questions we’ll answer in this article!
What is Social Trading?
The basic idea behind Social Trading is to look at professional and successful traders, see what they are doing, how they invest their capital – and copy it. As a private investor, it can be hard to overview all possible scenarios, stocks, businesses, and news; therefore, it is much easier to use professional investors as an inspiration. These people are analyzing the market full time and know the perfect times to buy and sell. Use this to your advantage. Many experiences with Social Trading show that it is possible to earn impressive returns, while at the same time you don’t have to invest the work of constantly studying the markets. Trading and investing in general have become extremely attractive to many people since traditional bank accounts no longer offer satisfying returns. If you want to avoid keeping your savings in a low interest rate bank account, we advise you to have a look into Social Trading.
Pros and Cons of Social Trading
With all things in life, there are advantages and disadvantages regarding Social Trading. Before you start your journey and begin to invest, we highly recommend being aware of all pros and cons to avoid any negative surprises.
Enjoy these advantages of Social Trading.
Let’s start with the advantages that come with Social Trading. This information will help you better understand if Social Trading is the right choice for you.
Wide variety of trading options
You want to invest in stocks and fonds? Sure! Or you’d rather trade forex? Okay! There are a lot of trading options when it comes to Social Trading, and therefore you can decide which one you’d rather go for.
You decide what risks you want to take
Just because you are copying a trader doesn’t mean that you have no control over the risk aspect of investing. How much money you invest and which trader you use for inspiration are still in your hand.
Possible with small investments
There is no minimum amount that you have to spend when it comes to investing. This is a significant advantage for people who want to get into trading one step at a time and don’t want to make big financial decisions (or take high risks).
Consider these disadvantages of Social Trading.
It’s not all butterflies and rainbows when it comes to Social Trading. Here you can find some disadvantages of this trading technique.
There is always a risk.
Social Trading isn’t risk-free! Just because you copy a successful trader doesn’t mean you’ll be successful too. Of course, there are higher risk and lower risk options when it comes to investing, but keep in mind that success and a high return aren’t guaranteed.
You need specific knowledge to be successful.
Before you can even start investing with the Social Trading principle, you have to find successful traders who give you the option to copy their trading system. You have to consider the risk and past achievements. This can be a time-consuming task, especially when you have no basic knowledge about trading and the markets.
