Social Trading Its Not As Easy As It Looks
This lesson will cover the following
- Why does it look easy?
- How difficult is to choose a successful trader
- Advises and final words
When we first heard about the emergence of this new (back then) concept of social trading, we were thrilled. To many traders it was like the biggest step in online trading we could imagine. Performing financial operations without having to dedicate all the time required for technical analysis? Count us in! It was like a dream come true – a new, much simpler and easier way of conducting business. Sadly, once we actually got into the field, the realization that it wasnt as easy as it looked hit us with a nice, sturdy punch in the face.
Its Not Easy As It Looks?
No, its definitely not as easy as it looks. Dont get us wrong – social trading really makes things much simpler and allows newer and more inexperienced traders to enter the field without learning everything we already know. It is a way for us to share our knowledge and experience, and for you to learn a lot faster. Plus, it gives us the unique opportunity to let someone else do the dirty work, for a change. Or so we thought in the beginning.
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The truth is a bit different, though. If youre thinking about “get rich quick schemes” involving social trading, we are telling you right now to simply forget about it. Its not going to happen. You have the same chance of making millions by social trading in the matter of weeks as you have of winning the lottery (actually, winning the lottery might be more likely). Ever since the beginning of this guide weve tried to burst your bubble. Weve told you time and time again that its not easy, that you will have to learn adapt, and evolve. Well continue doing so. In fact, the following section is dedicated to this goal alone. We dont want to sugar coat it – yes, you can make money with social trading, but it will have to for every dollar, euro or any other currency. Its not going to be a walk in the park, though – we want to be very clear about this.
Why Does It Look Easy?
It looks easy because the description makes it look easy. You work with information provided by other, supposedly more experienced people. If they made a certain decision, then it stands to reason that you should do the same. The information must be legit. Even if youre not too confident, you can always look at a traders profile and determine their credibility. Oh, there is a guy with a tie on the profile picture? Hes also well-dressed and smiling and a lot of people are following him? The information must be good.
It looks even easier with copy trading. You dont need to think about the information. All you have to do is click “copy trader” and he will make 300% profit in the next six months. Hes done it once before, right? He should be able to do it again. And he will! And you will be there to reap the profits without moving a finger. Its all so sweet.
Why Is It Not Easy?
What weve described above is how many people see social and copy trading. This is sad because it has nothing to do with reality. Whats even sadder is that many websites present it the same way. How are things in reality, though?
Weve already taught you how to pick a platform, as well as how to choose a trader. Weve warned about some of the dangers and weve informed you of the possibility of failure. This is just the tip of the iceberg, though. There is much more going on beneath the surface than you know and this section will make sure that you learn all of that (and more).
The first thing that makes things hard is choosing a trader. As weve explained in the “Recognizing Good Traders” section, this alone takes a lot of work and is a perpetual process of following how the trader is doing, whether or not hes hit a losing streak, etc. Even if you decide to stick with copy trading and not even bother learning how to trade (which is the laziest of all alternatives), you will still have to carefully analyze every profile, test every trader, and even then follow them all the time in order to make sure that theyre not wasting your money. You cant just pick a set of traders you deem good, sit back and wait for the money to fall from the sky.
But it gets even worse. If you want to become a real trader and not simply wait for others to tell you what to do, there is a lot you need to learn. This is where social trading is great because it decimates the learning curve and allows you to learn much faster and in a more concentrated fashion, skipping over all the parts you dont need. But even then it will require time and energy.
Is social trading easy? Yes, its much easier than the alternative trading routes you can take. Is it as easy as it seems? No, of course not. But its worth it. It will help you learn what weve spent years studying in just a few months. However, you still have to work hard and be diligent. So if you think that you wont have to do anything, were sorry to disappoint.