Most people have accounts on at least one social media platform, but mainly use them as a way to stay in touch with friends and family or catch up on the latest gossip. However, social media can also be a great way to enhance your trading knowledge, stay up to date with industry news and trends, and meet like-minded traders from whom you can learn.
In addition to the three main social media platforms (Facebook, Twitter, and LinkedIn), where you will come across many useful resources, you can also find dedicated social networks for traders, which have gained a lot of popularity.
The rise of social trading networks
Unless you’re lucky enough to have a mentor, someone who initiated you in the secrets of Forex or stocks trading, chances are you picked up basic trading notions on your own, using online resources.
In fact, this is the portrait of the modern trader. If in the past trading used to be an activity reserved for the elite, and people learned how to do it from their inner circle of friends (who were finance and business experts), now, according to a BrokerNotes report, the modern trader fits a completely different description. More and more traders are young people in their 20s or early 30s, who have read about the earning potential of trading online, used online resources to learn how to trade, opened demo accounts, and slowly got better at it. They didn’t study trading in school, nor do they work in finance or know other investors. In other words, modern trading is more of an individualized activity, and traders don’t always have someone to guide them personally through the process.
This is where social trading networks come in. These social networks were created specifically to meet the needs of traders and give them access to a worldwide community that can help them with tips and advice.
Although general social networks continue to reign supreme in terms of the number of active users, now the Internet has more specialized social networks than ever before. Trading is no exception. With platforms like eToro and ZuluTrade, developers wanted to give beginner and expert traders alike a place to trade and exchange ideas. In this day and age, trading might be easy to start, but in no way is it easy to master. By being active on social trading networks, you can get advice from pros, find out about the right trading strategies or the best regulated Forex broker in your region. Besides, many social trading brokers also offer users the option of copy trading (copying another user’s trading strategy), which can be a huge benefit if you’re just starting out and don’t want to take risks.
As always, you should take every advice you read on these platforms with a grain of salt, because the simple fact that someone calls themselves a pro doesn’t mean they are worth listening to. Still, being part of a community with a strong social element gives you the chance to build your expertise and overcome many of the challenges that you could encounter at the beginning of your career.
Social media has revolutionized the trading world to the trader’s advantage
Social media has changed many industries, and trading is no exception. Apart from social trading, you can use other social networks to your benefit too. Here’s how:
Get valuable market insights in real time
Back in the day, traders and investors had to rely on insider knowledge to develop their strategies, or they had to wait to read the news in the paper. Now, news travel much faster and you need neither a subscription to a trading magazine nor a cable provider. All you have to do is follow major companies and influential traders on social media and you will have relevant market insights on your fingertips.
Social media platforms such as Twitter put a focus on short, succinct updates. Normally, companies would share information with the public via financial reports and official statements, which are often difficult to understand and ridden with difficult terminology. On social media, all this information is presented in a more accessible form, that everyone can understand. In this paper from the University of Pennsylvania, you can read more on how social media has modified trading behavior and how companies now communicate with partners and investors.
Tip: In addition to following your favorite traders and online finance publications on social media, make sure you follow the trading hashtags as well and customize your smartphone news feed to include the latest information about stocks. This way, you’ll receive notifications as soon as something noteworthy happens and you’ll be able to act fast.
Join the community
Social media has all but erased physical boundaries between traders. Whether you trade from the US or from Poland, you can join trading groups on social media and exchange ideas. Even if you’re already an expert and you don’t need guidance, maybe you can be the one to guide others or just discuss what happens in the marketplace.
Tip: Facebook has many closed groups for traders, so make sure you join as many as possible to grow your social circle and consolidate your trading knowledge.
Unlike other social networks, LinkedIn is focused on working professionals, including the ones in trading and finance. LinkedIn is a great platform to be on if you want to get endorsements and find collaborators, but don’t forget to use the Groups feature too. Here, you will be able to meet fellow traders that discuss relevant trading subjects from an insider’s perfective and give your own opinion too. If you’re an experienced trader, you can use LinkedIn groups a branding tool.
Tip: the more people you meet through LinkedIn, the better. To expand your reach, join one large group and several smaller ones so that you can discuss trading topics with different types of audiences.
Social media has become so much more than a way to keep in touch with friends. Now, you can get your stock market updates with Twitter, join Facebook groups to learn how to trade, and leverage the power of social trading networks to meet professional traders.