Social Trading, or copy trading has been a trending topic during the last years. These days, everyone is familiar with social networks, but social trading is only gaining popularity in the world. The opportunity to receive income from investing free funds without having any professional trading experience sounds very attractive. What is social trading? How does it work? How can you make money from it and not lose anything? What are the pros and cons of this new, emerging technology? How do you choose a profitable trader and/or strategy and not be disappointed with the result?
Social trading, a relatively young concept in trading, has not gone unnoticed amongst beginners and experienced conservative investors. It involves the online margin trading field in the cryptocurrency markets as well as forex, stocks, commodities, exchange traded funds (ETF’s), contracts for difference (CFD’s) and other classes of assets. In short, social trading is a way of interacting on a social network created for traders. Such a specialised network allows users not only to communicate and exchange their trading ideas, but also to trade crypto, stocks and currencies together. Usually, such projects have a built-in functionality for trading in various financial markets and to provide an opportunity to share the results of their trading, share charts and trading signals. Whilst traditional trading relies on conducting your own market analysis and research and developing your own trading strategy, social trading allows you to quickly replicate someone else’s trading ideas.
Advantages and Disadvantages of Social Trading
Social copy trading has drawn a lot of attention of investors because it offers a quick and easy way to earn profits from trading. The most important advantage is a collective knowledge. Social trading enables new traders to benefit from the wisdom, strategy, and knowledge of other, more experienced traders in order to make a successful and profitable trade. While it isn’t a full substitute for learning independently how to trade, it’s a very useful tool to support beginners to embark on the learning curve. It’s only natural for new traders to try to learn techniques and strategies from experienced traders and thanks to the latest technology, this is now possible using software instead of just observation.
Another advantage is a quick access to reliable trading information. Traditional market analysis may take hours or even days to complete. But with social trading, you’re never more than a couple of clicks away from reliable trading information. In fact, you can view the latest information whenever you have a spare 10 minutes, whether you’re commuting to work, waiting for an appointment, or sitting in front of the TV.
Like all good things, Social Trading also has its downsides. Investors should be careful when choosing which traders to follow to avoid the false sense of security or becoming overconfident. After seeing the impressive trading records of the professional traders, it’s easy to believe that they never lose money. With this in mind, it’s easy to see why so many become overconfident with social trading. Many enter the game thinking their money is in safe hands and can’t be lost. Considering this, it is extremely important to carefully choose which accounts to follow.
CopyCash is the hybrid decentralized social copytrading platform. The hybrid model implies the use of a smart contract for project management, transparency of all operations and a centralised structure to provide access to traditional financial markets. Such a unique scheme of operations allows everyone to simultaneously have access to the liquidity of DEX exchanges as well as CEX exchanges, stock markets, foreign exchange markets (forex), CFD, metals, commodities and more.
Traders get the opportunity to trade on their own while attracting investors to increase their profits. Investors have the opportunity to select the best traders based on their rating and automatically copy their trades.
The investment process is as follows: the investor is given access to the performance records of the leading traders’ investment accounts and can analyse the success rate of their strategies. The investor then chooses one of these accounts to copy. A new, special copy-wallet is set up to copy the trader’s transactions. The investor then transfers his funds to this wallet. The chosen strategies are automatically copied to the investor’s wallets and uses the funds they have invested. For full and instant withdrawal of funds, the investment and copying may be ended at any time. In this case, the funds are withdrawn at the positions held.
The CopyCash platorm will allow professionals to gain access to aggregated liquidity and a wide range of trading tools. Beginners will benefit from a convenient interface for a simplified selection of the optimal trading strategies for automatic copying. In addition to this, all users will be able to discuss current market dynamics, new events, trends, popular topics, and tap into an expansive knowledge base of proven investment strategies, portfolios, and user-generated content.