How does Social Trading work?
Can I admit here that I don't really know how it works? But the question ought to be: do I have to know, in order to start trading?
If we’re to employ an analogy from the world of wholesale and retail, buying products in bulk brings down the cost per item. The manufacturer can afford to reduce his price if it’s easier to produce many items rather than just a few. Or, if a manufacturer discovers a means of doubling his production rate without incurring any expense in doing so, his costs will be halved. What we do in social trading – it seems – is we pool our resources in order to reap benefits.
Let’s look at another idea – the spread of technology. A caveman makes an axe – his friends copy him. The idea spreads from tribe to tribe. That first tool is copied and the idea shared, and everyone enjoys the advantages of having axes in the region.
Similarly, according to the tutorials that pertain to social trading, the success of this new method of gaining financial reward relies on going with the crowd, on copying others – but on also following those whose tried and tested methods mean that they’ve been successful, and are likely to continue in the same vein.
If you trade along with the majority or you follow those who know what they’re doing, you are likely to be right. And it's collaborative and it's social because we’re all doing similar things, sharing our experiences, and perhaps allowing others to copy.
I don’t have to know exactly how my computer works in order to post a review. But if you’re more informed than the majority, of course – for instance, if you are a computer technician, or to come out of the analogy, you have experience on the markets or in finance, and you closely read the financial pages and the wires from Reuters and Bloomberg – then you might have an edge, and there may be greater rewards on a social trading platform. But the fact is, social trading has been known to be more successful than the traditional forms of trading, regardless of your experience. Little or no financial knowledge is required if you're following the experts. There is no boardroom or backroom esoteric information involved thanks to the transparency of the transactions involved.
What is social trading?
Social trading – as distinct from more traditional or conventional financial trading – uses the technologies and techniques of social media platforms, such as crowd-sourcing and content that comes from users - in a market trading platform environment. Just as the power and popularity of a social media platform can be based on the user generated content – posts, articles, videos and galleries that are linked from a social media page to be found in your virtual feed or on a virtual wall – social trading platforms operate on similar principles. The eToro platform is a transparent social trading platform, enabling users to follow and emulate others in their social trading activities, without compromising their entire portfolio. It means that just as you can stay informed of news of any kind on a social media platform with commentary, advice, opinion, and facts from respected experts, you can also follow and copy successful social traders in an open and clear manner on a social trading platform.
eToro social investment network
The eToro philosophy has as one of its core aims to encourage everybody to engage in social trading – and this inclusivity extends to the WYSIWYG interface, the ease with which you can set up an account and start putting and calling on trades, and the various ways in which the platform engages you – whether you’re committed to any trades, or you’re simply browsing to see which currencies to trade.
The people at eToro appreciate that the end user experience when it comes to market trading has been traditionally boring and dry, but through mobile apps and the online platform that taps into the market and a massive online trading community of almost three million eToro users worldwide, eToro makes trading both fun and socially engaging in ways that even its direct rivals try to emulate.
eToro OpenBook, eToro WebTrader, eToro Mobile Trader
Deposits and Withdrawals
Since many beginning traders have little understanding of the forex market, in order to help its clients manage risks better, eToro requires a very low $50 minimum for account deposits, with leverage options beginning at at 10:1 and reaching to 400:1. Beginner's should be aware that increased leverage means increase in overall risk.
eToro is very flexible about client deposits. MoneyGram, WesternUnion, Neteller, PayPal, WebMoney are accepted channels for account funding, along with the standard credit card deposits and wire transfers. The minimum deposit with a credit card, PayPal, Neteller, WebMoney or Moneybookers account is $50, and it is $500 with WesternUnion, MoneyGram and wire transfers. The eToro website offers extensive help and guidance on client deposits. Withdrawal of funds is equally easy, and the filling and submittal of an online form is the only necessity.
eToro is committed to bringing the easiest and most rewarding forex trading experience to beginners. As such, it offers numerous online tutorials, trading guides, along with the usual demo account. Since eToro is also a community with an active online trading forum, which features public and private chat opportunities, along with extensive networking capabilities, the beginning trader will have more than enough choices for the tools he will use to better his skills. The support staff, forums and numerous online guides and tutorials contribute to a quicker learning period for the beginner. Since the firm’s stated purpose is to help the beginners get used to trading with the shortest and lightest trouble, there is a wide array of tools with which the beginner can improve his trading skills.
To ensure the safety of customer funds, eToro uses industry standard Secure Socket Layering (SSL) technology for encryption of data. eToro doesn’t share crdit history, net worth or other related income data with any other institution. Operated by leading online forex brokers, the technical staff who develop and innovate on the eToro platform is committed to bringing you the best spreads with the most precise and timely trade executions.
The eToro brand is a great introduction to the concept of social trading – for both novices and experts alike.
Experts can build up a following using the eToro social trading tools – they’ll be copied by their adherents, adding financial weight to their calls and puts.
But anyone can weigh up the likelihoods and probabilities by seeing the direction in which the majority of traders are trading in – for example – a particular currency pair. The tools are provided on the interface that clearly show which way the majority are headed. Then you simply choose which way you trade, you commit to the trade – often just a one minute trade – and you sit that minute out to see if you’ve won the trade. You can have more than one trade going on at the same time.
Additional cool features at eToro include mobile apps and stocks trading
The mobile apps that are available make quick trades on the go incredibly easy. Apps such as the eTrader mean that you don’t require to be at a computer to make your trades. Versions are available to run on a variety of different phones and androids, and they have some great technology on the app, such as the way in which it can prevent your phone from hibernating when you're actively trading - just in case you need to make a split second decision.
Unlike other social trading platforms, eToro also has functionality when it comes to investing beyond currencies - with the option to trade in a variety of stocks.