Copy Trading with Binary Options
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This young market has had a phenomenal growth rate during the last five years, especially among those who are new to online financial trading. It goes without saying that new traders are at a disadvantage as they lack any real experience in online financial trading. To get around this problem, new traders can tap into the world of Social Trading to undertake what is known as “Copy Trading” or auto trading.
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The concept of “Copy Trading” is not a new one as it’s been adopted by the Forex trading industry for many years. Essentially, this method of trading calls for the sharing of trading experiences among traders so they can shorten the learning curve. Another benefit of copy trading is the fact that it allows new traders to emulate the trades of those who are more experienced.
How Binary Copy Trading Services Work
The system is the next level up from binary options signals . Signal providers send the signals to their subscribers by means of email or text. This still means that once the trader has received the signal he is required to act up on it. Because of this extra step, there is a time lag between receiving a signal and it being acted upon. In a fast moving market, those few minutes mean the difference between a losing trade and a winning trade. With Binary Autotrader the automated system acts upon the signal itself.
There are several types of social trading platforms which traders can join. They include:
- Social Trading Networks
- Mirror/Signal Trading
Social Trading Networks
These were the initial social trading platforms that were adopted by the Binary options industry. What is unique to this type of social trading is the fact that they allow traders to network interactively among each other. Some of them bear a close resemblance to mainstream social media platforms like Facebook and MySpace. Just like Facebook, these social trading platforms allow traders to follow the actions of other traders and automatically update their own actions to public forum so others can study the actions and give advice on them.
However, the best part about social trading networks is when new traders become the followers of the more experienced traders. By being followers, new traders can study the post of the more experienced traders and contemplate on the actions undertaken by the more experienced trader. Later, they can then decide if they want to copy these actions. It is this sort of features which helps new traders gain an added advantage in trading despite their inexperience.
Mirror or Signal Trading is a more advanced form of Social trading. Here, the more experienced and successful traders get to act as signal providers. Any trading actions by these experienced traders will result in a signal being out to their “fans”. Upon receiving these signals, “fans” can choose if they want to copy the actions of their “idol”. The benefit of this type of social trading is a two way street. “Fans” gets to capitalize on the knowhow of experienced traders while the experienced traders will get a share of the profits which their “followers” generated.
So if you are a new trader with no idea of how to trade binary options, fret not as copy trading is available to you. Once you have gained enough experience, you might also want to share your experiences with other new traders so you can increase your earnings by leveraging on their trading actions.