Social Trading – New Platforms are joining the Industry
There’s no doubt that Binary Options follow the trends previously seen in Forex; that’s actually great because the foreign exchange industry has a turnover of about $5 trillion a day and it’s a Godzilla among trade-related activities. Just how Forex brokers started to offer social trading, so do Binary Options Brokers these days. Platforms are becoming more transparent and traders can see what others are doing on their accounts, what trades they are taking and whether those are profitable or not. Let’s have a look at the newest platforms which offer Social Trading features.
A New Way to Look at Online Trading
Social trading has great advantages, I must admit: if you are a new and inexperienced trader, you feel lost among all the financial terms, political events and economic indicators. I mean, that’s how I felt when I first came into contact with the trading world. My broker explained to me over the phone a bit about economic indicators and I felt like I understood what he was talking about. Not really, because when I opened my platform and I was faced with the decision to go Long or Short, I freezed (my first account was a Forex account because Binary Options were still not available to the large public). Now, with the new social trading features, online trading in general and Binary Options in special are easier than ever. All you have to do is follow what others do. You see their performance and you just do the same thing they do. If a trader with a good track record places a Call on AAPL, maybe it’s time for you to do the same because he already analyzed that asset and decided a Call is appropriate. On top of that, if the trade ends Out of the Money, you don’t have to blame yourself… after all, the analysis doesn’t belong to you and neither does the guilt.
New Faces in Town… Who are They?
One of the new emerging platforms is OSystems. They advertise flexibility and a new way of attracting clients: social trading and the ability to copy other traders. There is no option to automatically copy the trades but a trader sentiment indicator is offered, alongside with statistics of the trader’s past performance. That way you can decide if you want to place the same trade as he did or not. People can share ideas and compare analysis in an attempt to make the best trades but the platform is still new and we have yet to see how they will implement the software and if the functionality will be satisfactory.
Moving into the social trading arena as well is TradeSmarter but with a slightly different approach, more graphical in nature: the user can view other trader’s position directly on the chart. The price where another trader has an open position is displayed on the graph in the form of a circle with a head symbol inside. If that trade expires Out of the Money, the symbol disappears and if the trade finishes In the Money or the trader closes the position in profit, the symbol becomes green. If you’re worried that your chart will become hard to see because of all the circles with heads inside them, you can choose not to display any of them. If the social feature is enabled, your trades will also be visible to others.
Another social trading platform is our very own CommuniTraders. Right from the start this platform was dedicated to social trading. You are trading virtual money and it is meant to be a substitute for the brokers’ lack of demo accounts. Even if they have demo, it’s very hard to get your hands on one so a better option is to use CommuniTraders which is free and comes with no strings attached. Of course, you cannot win real money if trading on it, but it allows you to see the open trades of others and assess the overall trader sentiment. If you really want to make use of it for trading real money, you could copy the open trades of CommuniTraders users in your real Binary Options account. The platform is a great way to test your binary options strategy and to see what other, more experienced traders are doing. Your own trades can be viewed by others and if you are successful enough, you will make your way to the top of our Leader Board.
Benefit from Social Trading
Mastering the art of trading takes years of hard work and determination but while you are honing your skills, you have the opportunity to make some profits by following others and be a part of a larger community whether is on the OSystems platform, TradeSmarter or Communitraders. But make sure you don’t just follow blindly a trader, without understanding the reasons behind his trades because if he chooses not to share anymore, you will be left with no knowledge of your own. Anyway, I don’t believe that you can be great if you do the same thing everyone else does. Choose what kind of trader you want to be.
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