What is Social Trading?

Social networks like Facebook, Twitter & Co. has been around for a long time and its popularity is constantly increasing. So why not integrate a social trading network in modern financial trading? linked here time This idea was implemented with social trading. While social trading has existed for a long time, it is only in the past that it has experienced a real boom and is becoming a trend. It is not surprising, because traders are always looking for promising strategies to increase their profits and avoid losses.

The functional principle of social trading is simple: Trades from successful traders (so-called “lead traders”) are tracked and imitated to achieve better success. A distinction is made between the two following social trading models:

In the case of social trading communities, professional here with traders, advanced players, newcomers and interested parties meet on a platform and share their knowledge and experience in order to be successful together. It is therefore a kind of collective intelligence that lives only by the fact that decisions, assessments, strategies and value developments as well as much more are shared and shared with each other.

One of the most popular communities is Sharewise. On this platform around 150,000 private investors are up a knockout post running. In addition to up-to-date news, the portal offers many additional information about the stock market. Clicking on the menu item “Community” will take you directly to the list of the best members, which can then be “followed”. In he check it out addition, the list of “buy-trends (24 h)” and “sell trends (24 h)” should also be available for traders. There is also a list of current assessments of the members.

Sharewise itself has its headquarters in Munich and advertises that you can see the total assessment of a share on the portal. Fundamental assessments, analysts’ opinions and assessments, as well as the Sharewise Crowdsentiment provide users we great post to read with different ways of looking at the investment decision. Unfortunately, this only applies to stocks and indices.

Social Trading Platforms: Copy Trading

There are now many social trading platforms on which professional traders can present themselves. This includes, for example, the platform wikifolio.Profi traders publish their trading strategies and systems, which investors can then follow, or copy the strategy one-to-one to their own broker’s account. Hence the term “copy trading”. Another popular term is mirror trading.

On the wikifolio platform, for example, the traders registered there publish their their lowest price investment strategies as a model depot (wikifolios). If this deposit fulfills certain requirements, the partner (Lang & Schwarz AG) of wikifolio issues a financial product that tracks the value development of the portfolio. It is then referred to as a “wikifolio index certificate”. It also receives an identification number (ISIN), whereby the financial product can be identified worldwide. Investors can then invest in the wikifolio index certificate by way this hyperlink simply adding them to their portfolio at the Stuttgart Stock Exchange. Buying through an online broker is also possible.

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Of course, all the fun for the investor is not free, because the professionals as well as the platforms deserve it. That is why, depending on the portal, there are different compensation models and additional costs. This kind of trading is not really so “social”.

The platforms offer different approaches to participate in social trading. One thing, however, unites all, namely the integration of the social aspects of the well-known Web 2.0, which in turn are combined with the option of a financial no a cool way to improve situation. For all stakeholders – whether professional traders, investors, beginners or prospective customers – social trading offers the opportunity to exchange, inform and share the knowledge of others