Are you one of those people that likes to dabble in the stock market? Perhaps you’ve subscribed to market feeds and even do a little day trading when time permits? With the rise of the app culture and social media, there are more tools than ever in the hobbyist trader’s arsenal, especially on mobile devices. This week a new app called Copyop has been brought to our attention – an app that lets users partake in so-called “social trading”, which according to Wikipedia is the process through which online financial investors rely on user generated financial content gathered from various Web 2.0 applications as the major information source for making financial trading decisions.
The emergence of social trading
The advent of social trading can be traced to the emergence of web 2.0, Facebook and Twitter. Fully-fledged social trading applications borrow heavily from the concept of online social networks. Actually, they could even be considered a sub-category of social networks. A social trading site is in fact primarily a social site but instead of people exchanging photos and thoughts about life, they exchange insights and perspectives about effective trading strategies.
With social trading, users trade online with the help from others. An investor can watch the trades of top performers in the market and duplicate these trades for personal trading success. With this up and coming trend, even novices can find it easy to trade in financial markets.
The concept of socialisation in terms of financial issues is facilitated by social trading sites because they encourage the free flow of information, something that was not possible in the past where few privileged individuals had access to information that helped them gain an unfair advantage in the market. Therefore, apps such as Copyop have leveled the playing field and made it possible for traders to pool skills and financial resources.
Why social trading?
Even the most experienced financial trader can benefit from social trading platforms. But novice traders stand to benefit the most from these platforms. Irrespective of the level of market experience, social trading platforms and apps are increasingly becoming necessary tools in modern day trading.
Shortening the learning curve for beginners
To most beginners and novices, social trading sites and apps are perhaps more of a need than a luxury, due to the shorter learning curve. Instead of spending time and effort studying fundamentals and technical analysis, one simply has to learn from the trading patterns of experts – something that becomes much easier with Copyop, for example, which highlights the best-performing trades and traders.
Users can quickly copy the strategies of leading traders and apply them to their own trades, increasing the chance of success. Besides connecting with and copying the top traders, you can also follow them in the app to receive notifications of their latest investments. You can of course unsubscribe from anyone that you have followed. Makers of social trading apps claim there is no need for advanced analysis tools and complicated charts. While we’ve not yet really been able to validate these claims, the whole ethos of emulating others’ successful trading strategies appears fairly sound.
This is where we remind you that stocks and shares may go down as well as up, and not to blame myself or Ewan if you lose money using social trading sites!
Pooling financial resources
Unfortunately, novice traders don’t always have the funds to meet the investment thresholds for particular financial markets. Social apps tend to overcome this by giving novices the ability to pool their financial resources to meet the required thresholds.
Insights and perspectives
Even for experienced traders, the insights and perspectives gained from social trading apps and sites are immensely valuable. These sites bring together valuable information into an easily accessible trading community that brings together traders from all over the world. Users of such sights tell us that participation in social trading provides insights on some fairly lucrative investment opportunities that they just can’t get elsewhere.
With a trading social network, you have at your disposal a bank of knowledge on the different factors that affect financial markets. Users don’t not have to spend a lot of time being acquainted with the social, political, and economic factors that will determine the performance of a trade. You simply have to make use of the pooled wisdom of your trading community of choice, to determine the possible trading pattern and strategies to put in place.
Social trading is certainly an up-and-coming trend, generating wealth for individuals through financial markets. Copying the strategies of top traders really does seem as easy as clicking a button in a social trading app…
It’s a brave new world for those willing to dive in and invest – and what better way than utilising the shared knowledge that others have gained?
We’ll let you know if we manage to make a mint using Copyop or other social trading sites…!