When it comes to crypto trading, many new traders are intimidated as they feel that crypto trading is something in which people who have knowledge can only be involved. Additionally, crypto trading is relatively new, leaving many traders in the dark regarding what and how to trade. This is where social trading comes in. It’s a type of trading that enables inexperienced traders to directly copy the trades of other traders with much experience in crypto trading. Read More
Since its beginning, copy trading has come a long way. As technology progresses, copy trading has become so advanced and quick. Whenever an experienced trader places a trade, the copy software will instantly initiate the same trade on the copier’s brokerage. It is now considered one of the most effective ways for novice traders to enter the crypto market.
Is Copy Trading An Established Form Of Trading?
Of course! Copy trading has been around since the time trading was launched. However, this information-sharing has become much more modernized now. Earlier there were email platforms, but now people have switched to trading chat rooms, which are much more convenient to connect with potential copiers. However, the problem of missing messages and slow reactions still persisted, making copy trading a difficult task to perform as you had to be on your device whenever the trader was.
Automation And Signals
In 2005, the copy trading technology saw a significant shift because it was when automation was introduced in copy trading. During this period, the concept of automated copy trading platforms became quite popular, which enabled users to get a notification as soon as a particular trade was placed. This process is known as “automated signal”, which is still used by many crypto community groups.
This was a turning point in the journey of copy trading, as people could quickly access trades’ information and utilize the same trades in their brokerages. This particular method has been refined a bit in recent years. The concept that you see today is social trading.
Meaning Of A Social Trading Platform
In simple words, a social trading platform is a site enabling users to view the profiles of other experienced traders and check out the recent trades they have executed. If you find that their trading style and risk capacity match yours, you can choose to follow them. This will create a direct link between you (the copier) as well as the trader (who you are copying). Since the social trading platform is totally automated, the trades executed by the expert trader will automatically be placed by the copier’s trading account as well. The copy trading executes the trades within seconds after the expert trader; thereby, the users get the same price which the trader got.
The benefits of social trading do not end here. The users can also take advantage of various communities that exist on these platforms which are solely dedicated to discussing ideas and trades of other respectful traders.
What Are The Benefits?
There are several benefits of social trading platforms, making them a fantastic choice for traders. Some of them are:
Social Benefits: As the name suggests, social trading platforms are an excellent way to socialize with other like-minded traders who have a keen interest in crypto, forex, stock and more. Thus, they let you find some good friends who also enjoy trading.
Passive Benefits: Once you start copying the trades of other experienced traders, everything will become so easy and smooth that you can take the backseat and just relax. Thus, social trading is the best method if you are interested in making some passive income.
Easy: The best thing about social trading platforms is that they are easy to set up, use, and navigate. They statistically display everything about the traders, including their new trades and recent returns. All you need to do is select someone you like and give the command to copy their trades.
Time-Saving: Rather than spending countless hours researching cryptocurrencies, isn’t it best to copy someone else’s trades who have much more expertise and knowledge? Many expert traders have already done this research, so why not work smartly rather than harder?
Conclusion
It goes without saying that social and copy trading can not only take the pressure off traders but also bridges the knowledge barrier for novice traders. Until recently, crypto lacked a platform that could perfectly fulfil the social aspects of crypto trading. But now several crypto-focused social trading platforms have come up to help people provide a digital space to learn more about crypto by finding out about the moves of their favourite traders. While beginners get so much to learn, experts earn a commission, making it a win-win situation for both.
