Forex Social Platforms - an Opposing View

Christopher Lewis

By: Christopher Lewis

Over the last couple of years, there has been a push in the Forex world towards social media. Many traders find themselves attracted to websites such as Currensee and eToro as possible places for trading ideas. Most of these places will give you an opportunity to follow a particular trader, some for free and some for a small cost. The ability to see what other traders are thinking is in theory a huge advantage. But the question remains whether or not these websites can prove to be helpful for the new trader.

In order to fully understand the concept, let's take a look at some of the potential advantages of social Forex trading platforms. It is by breaking down the advantages into small pieces that we will begin to understand the worthiness of these websites.

One of the first things Forex social trading platforms tout is the ability to follow winning traders. The truth of the matter is that winning traders on social platforms tend to be new traders themselves. It is ridiculous to think that somebody who just started trading is somebody you should follow. While it is true they may be on a hot streak and up 317% over the last three weeks, the reality is that sooner or later they are going to start taking losses. A trader like this is undoubtedly leveraging their account way too high. While he gives them great looking gains, the losses when they start taking them are going to be absolutely disastrous. It is because of this that you see a revolving door of "winning traders".

Social platformsThe other big thing that Forex social trading platforms promote is the ability to see what other traders are thinking. While in theory this sounds like a good idea, the reality is that the average trader on these platforms hasn't been trading very long. Because of this, their opinion may or may not be founded on reasonable analysis. Quite often you will see large amounts of these traders buying at the absolute top, or selling at the absolute bottom. You must know that even the most experienced professionals are taking losses, and as such you should be careful following their thought process. So when it comes to the thought process of somebody who's only been trading Forex for three months, the odds of it being a winning thought process diminish greatly.

Many of these social platforms are simply ways to make money for the owners. It might be through advertising, it can also be through referrals to brokers, or possibly even a situation where the broker actually owns the social platform. It is in the broker's best interest to have you trading is much as possible, and with as much leverage as possible in order to separate you from your money as quickly as possible.

The opinion presented in the article is that of the author alone, and does not represent the opinion of DailyForex.com.

About the Author
Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

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4 User comments
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Alex
2015-12-07 00:00:00Z

Just found this article as I was researching Social Forex trading. Happy to see how far social Forex trading has come from when this was written. Interested to see an update. Thanks

Forextraderexpert
2014-12-07 00:00:00Z

I currently copy trades using Zulutrade.com. It is helpful to me and my trading. Social trading is very important and helps both beginner and expert traders succeed in this field.

Robotforexsignals
2011-08-11 19:32:00Z

The problem is there are many forex signals publisherson this websites with martingale strategies that will blow up the accounts in less than 12 months

Travis
2011-03-22 00:00:00Z

I have been trading for a very long time and the term forex social network" is Really Getting Skewed and mis used. if you go do a Google search on forex social networks. you will notice Forex Social on top. One is because there are the first to even break ground on the concept of a social network for traders. and what separates them from currensee is that currensee is more of a signal service then a social network. if your going to write about social networks in the trading community, at least be fair and tell the readers about all of them. Forex Social is a good start because there are not trying to promote brokers or get you to by into there signal system. social networks should remain neutral. when you go too commercial "and monetized" a social network it will fail. just like Myspace. Built it for the people not for profit.


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Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

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