When you think of what moves the market, what comes to mind? Chances are, you’ll think of news, products releases, earnings reports, and more. However, all of these do one thing, they get investors excited. So, the answer to the big question, "What moves the market?" is actually very simple; investors do! This fact has given way to one of the latest and fastest growing trends in trading…social trading. So, today, we’ll talk about what social trading is and how it can help increase trading profits, we’ll provide the name of one of the largest investor social networks and how it works, and discus how to start taking advantage of the social trading trend.
What Is Social Trading?
Social trading is the process of making trades in financial markets based on information gathered through a social trading platform or online forum designed around the process of social trading. In the social environment, traders share the trades their making, ideas for future trades, and more. By following the streams in these social environments, it’s easy to spot stocks that are trending and why; giving the trader an upper hand when making trades.
One of the Largest Social Trading Environments Online
One of my favorite social trading environments is StockTwits.com. As a matter of fact, if you join, you’ll see me frequently. While Stock Twits is not a trading platform, it is a very useful tool. The concept is incredibly simple. When traders make their moves or find big news, they share the event with other investors following that stock. So, if you’re interested in what’s going on with Apple’s stock today, you can simply go to the Stock Twits Apple stream and read what other traders have to say.
Another way I use the social trading network is to figure out where the big trends are. Once logged in, you’ll see a link at the top of the page titled "Heat Map". The map tells you what stocks other traders are talking about most and whether those who are talking about the stock are bullish or bearish overall. By picking the assets that people are talking about most, it’s almost impossible not to spot a trend!
How to Start Taking Advantage of This Social Trend
Getting involved in social trading is a very simple process. Here are the steps…
- Find An Atmosphere That Fits – While I’m a Stock Twits fan, you might like another type of social trading atmosphere like copyop - a platform dedicated to binary options trading; so, do your research and try out a few different places. Check out the different tools and choose one or more that you’re going to use.
- Read What Traders Have To Say – Go to the streams that are most active or that cover the assets you follow and read what traders have to say. You may just be surprised at how easy trends are to spot in these environments.
- Join The Discussion – Social trading simply isn’t the same if you choose not to participate! If you have a question, don’t be shy, just ask! In most cases, you’ll get your answer pretty swiftly with a resource or two to back it up!
Final Thoughts
Social trading is all the rage these days, and for good reason. The bottom line is that any tool we can use to help us predict movement in the stock market is useful. Knowing that investors are what make the stock market move, knowing what big time investors plan on doing later on in the day, week, or month can give you an upper hand when making your trades. The best part is most of the best social trading networks are absolutely free; so, you can’t lose anything by giving it a try!
