The internet has changed the way many industries operate and in trading there is a new trend emerging called social trading.
Up until now, traders would historically base their trading decisions on either fundamental data or technical analysis. However, traders are increasingly looking to social networks and Web 2.0 applications to gather the information they need to trade effectively.
Facebook, and increasingly Twitter, can both be harnessed to provide insights into the crowd and thereby indicate the future direction of forex markets. There are also several new trading platforms that allow traders to ‘follow’ other traders, in theory shortening the learning curve that is required to trade successfully.
Guest post by FXTM
Facebook & Twitter
While Facebook & Twitter can not be directly used to trade, they are useful tools for monitoring the ‘crowd’. Twitter especially allows traders to be able to follow trends in the markets and also allows traders to follow their favourite experts, thereby receiving updates whenever the expert makes a trade. Twitter is also one of the best resources in the world for receiving up to date and breaking news stories. In fact, recent studies have shown that news is often reported earlier on Twitter than any other means including newspaper websites and company blogs.
ZuluTrade
To really engage in social trading however, you may like to take a look at ZuluTrade. ZuluTrade is both one of the biggest and oldest social trading networks and is a place where traders come together to trade the forex markets. The service offers full trade copying of other users, supports multiple brokers and comes with a free demo. The basic premise of ZuluTrade is that you can search for expert traders, (based on your specified metrics), and then instruct ZuluTrade to copy their trades exactly. Conversely, if you are a good trader, you can get compensated for sharing your trading signals with other users.
Tradency
Tradency is another platform for social trading and the company has developed a ‘Mirror Trading’ concept which allows traders to mirror the trades of selected strategies from developers around the world. The program also allows real time analysis of each trading signal which means that a trader can also select manually which trades to take.
MetaTrader
MetaTrader is another very popular platform with over 600 brokers and banks using the program. What this means is a huge community of traders and coders and in 2013, MetaTrader allowed all of its users to be able to share their own trading signals to the community. There are now hundreds of so called ‘expert advisors’ (automated trading systems) available which can be downloaded, back-tested on historical data and then implemented through MetaTrader.
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