It wasn’t that long ago that the only way in which you could trade the financial markets and forex in particular, was on a specialized trading floor (also known as the “Pit”) with trades yelling their Bids and Offers (know as open outcry). Then came the internet, which turned things completely around, allowing anyone with the capital to invest, access to the world of speculation and financial trading. No longer did a potential trader need to get an exchange license or have big equity to trade the markets. Access to a good broker, an electronic trading platform and equity as low as $100 was enough to get started with trading.
No sooner than Internet trading started revolutionizing traditional trading, things are changing yet again, with the advent of social media which brings the potential to completely change the demographics of traders, and how successful they are.
While the forex market is so large and so liquid that it’s extremely difficult to influence, the biggest investors such as banks and hedge funds have always had a distinct advantage over home traders, even if they’re full time. This is simply because they have the capital to take larger risks, and act quickly, thus in some cases be able to move the markets in a certain direction, at least for a while.
They’ve (institutions) also have an enormous amount of resources on their side. Whole departments of analysts working on accounts, specialized analysts, each focusing on just one particular market, all of this put together allows for things to be observed in much more detail; they can also work for longer and be constantly aware of what’s going on. They never sleep.
While there isn’t a great deal that can be done about the massive capital the banks and hedge funds have, social media is certainly changing the resources that individuals have available at their fingertips. Where once it was extremely difficult to get reliable information and signals without subscribing to an expensive membership, accurate guides are now available for free from like minded people. Education and tips are now very easy to access.
Platforms such as TraderConnect allow countless traders to interact with each other in order to help each other become more successful. Because of the size of the market, there’s no real worry that revealing good signals will cause them to be any less effective. The more ideas that can be shared the better. Message boards and chat rooms are now buzzing with people all giving each other hints, and working out how to become more successful.
One of the problems of sharing ideas before, was that it wasn’t always possible to trust a signal that had come from someone over the internet. Social platforms however, allow users to link up their forex accounts, so that people can see exactly how they are trading themselves. There are even league tables and functions that allow individuals to copy the trades of top performers in order to benefit from their expertise.
So are there any negatives?
The truth is that as long as you continue to be vigilant when it comes to receiving signals, and you don’t follow things blindly, then there’s no real reason not to become involved in social trading to some extent. While some dedicated providers might charge you a subscription, a lot of forex brokers are now including a social media suite as part of their account, so there’s nothing extra to pay.
Social platforms are still relatively new, and while there are thousands of people already involved, it’s too soon to say what the real potential of social media will be. Developers may continue coming up with new ideas, and even more people might join up. What is certain however, is that social media is definitely a pathway to becoming a better trader. Use the power of crowd sourcing information and sharing ideas to improve your success.