So what is social trading? As with all other industries trading the financial markets has quietly or not so quietly been building up social trading networks of traders and punters betting on financial markets.
Let’s get the risk issue out of the way.
Unlike traditional gambling with online bookies you can lose a lot more than you deposit in your account (this actually applies to sports spread betting too which some like to call sports trading). The only limited risk form of betting on financial markets is binary options where you bet a set stake for a very short period of time. So regardless of who is doing the trading you must be aware that the risks are great and can wipe you out. But a little like Spiderman, with great risks come great rewards.
Financial trading is big business and if you like the thrill of sports betting financial trading takes things to the next level. Bear in mind that the stakes are higher and also the potential for profit – if you want to get started you can compare the best financial spread betting brokers here.
There are a few ways you can get started in financial trading. You could read a book and implement some basic trading strategy. Or you can open an account with a social trading broker and follow traders that consistently make money.
Social trading platforms work the same was as traditional spread betting brokers or CFD brokers and generally focus on highly liquid assets like Forex or Index trading. These markets trade pretty much 24 hours 5 days a week and getting in and out of positions is simple. There is also a constant news flow creating volatility and momentum which is where traders try and make money.
Where a social trading platform differs from normal brokers is that they let you copy other traders trades automatically. League tables are published so you can review how well a trader has done in the past. If a trader is constantly making money you can opt to follow them.
So if you don’t know what you are doing and what to bet on the financial markets, social trading can help point you in the right direction.
It’s an interesting concept and well worth a go – if you are a novice (but only trade with money you can afford to lose and then some – take independent financial advice etc.) The two brokers worth a look are ayondo and etoro. Etoro have just launched an TV ad campaign which you can see below…
As yet there is not really a social betting networth that is any good. BetFan publishes some pretty decent league tables that are potentially worth a look. Our friends at Tipster TV have some good chat, but as yet you can’t find a gambler and follow them.
Perhaps it’s because traders love to show off and the market is big enough to earn from followers. But in the world of sports betting, even the biggest betting exchanges don’t have the liquidity on offer to not move a price when a recognized bet winner takes a punt.