Social Trading Binary Options
Social trading is the latest trend to hit the online financial trading industry, and it has quickly risen to become one of the most popular ways to profit trading binary options.
Social trading is, in a way, a social media network for traders. It allows traders to watch, learn, and copy trades made by more experienced, profitable traders. It's also a great place to meet other like-minded traders through forums, chat features, or whatever is provided by the service.
|Social Trading Binary Options on Roiteks Platform|
How does social trading work? Here's a quick example. Social trading networks usually have lists containing their most active and most followed traders. In the case of CopyOp, you get to see the best traders, traders who follow the most traders while profiting the most, and then the trades that made the most money.
Use these lists to scout out the best talent. But just because Greg made $2,500 on a EUR/USD Put, doesn't mean he's an experienced market veteran who you should automatically follow, he might not be as good as that one trade made him out to be. This is where watching traders and their investing habits comes into play.
Apart from outside services dedicated to social trading, there are also some binary options brokers who offer their own social trading feature, although these aren't nearly as popular or as trusted by investors.
How to Profit With Social Trading in Binary Options
Just like in regular social media networks where every individual follows different people for different reasons, the way traders approach social trading in binary options will vary.
Do you want a broker who offers an in-house social trading feature? Or do you want to go with an outside platform? SpotOption has recently introduced a SpotFollow social feature that allows traders to follow other profitable traders, this might be more convenient for traders using a broker who runs on the popular SpotOption platform. But on the other hand, an outside service like CopyOp might have a higher number of actively profitable traders, which gives you more options.
Here are a few tips to help turn social trading it into a rewarding experience.
- How does the trader invest their money? Do they use some form of money management, or are their bet sizes all over the place?
- Do you know how this specific trader is getting their entries? Are they using software, indicators or pure price action?
- Try to find traders who go on winning streaks. Then try to get in the middle of one of those streaks to profit.
- Establish a criteria for following traders. For example, you're only allowed to follow traders who carry a 75% accuracy after completing at least 50 trades. Establish a similar criteria for yourself to avoid unnecessary losses.