If you are new to trading the financial markets, you may find both social trading and mirror trading a great way to learn the ropes. While similar in concept, one involves a bit more focus and effort, but both enable you to learn from successful traders in any given market.
Before getting started, it might be wise to understand exactly what each trading style means and then you can make a better decision when choosing one method over the other. To put it simply, the differences between social trading and mirror trading are few, but they are big enough to offer you an opportunity to begin trading immediately with little to no background in the markets.
Social trading overview
If you have a little time on your hands and are familiar with how social networks work, this is probably the best platform for beginners wanting to learn from other, more experienced traders. Often used by new Forex traders, social trading networks allow you to copy the style of other traders, interact with them and learn from their triumphs and losses.
You can find the top social trading platforms on sites like https://investingoal.com/ where you will be able to meet other traders and, to put it simply, be social. We are social creatures by nature, so why not put that to use when learning how to trade in the financial markets?
A basic introduction to mirror trading
Mirror trading is quite similar to social trading, but with one distinct difference. In mirror trading, you will be mirroring the trading style of other traders without wanting to learn what you are doing and why. You will be watching how they trade and if you find a trader who seems to be making money consistently, you will simply follow their lead. This does not necessarily mean you will be trading the exact trades in terms of amounts invested, but you will mirror (copy) what they are doing.
This is especially beneficial in Forex markets because you can simply trade the currency pairs they are trading. Unfortunately, you won’t be learning much because you are simply following the leader without knowing why they are making the trades they make.
The differences are few but vast
As you can see, the focus is the same with both social trading and mirror trading in that both copy what other, more experienced, traders are doing. However, the main difference is huge. In a social trading platform, you will be interacting with other traders so that you can learn why they do what they do.
There will come a day when you may see something you’d do differently and based on what you’ve learned, you could realize a tidy little profit quickly. Socializing with other traders is really a great way to learn. It’s the next best thing to having your very own mentor in the markets.
In today’s world of Facebook, Twitter, and Instagram, everyone has gone social and now so, too, have traders. Since you are already well versed in social networks, why not put your skills to new, and much more profitable, use? What a great way to learn the ropes!