One of the biggest conversion hurdles a brokerage faces is a trader’s fear of the unknown. A newbie trader who has zero knowledge of the Forex trading market may be hesitant to make a first deposit, but with social trading, a brokerage can ease a new trader’s fear and put him on the track to prosperity.
It is no secret that social trading is a fast-growing tool in the Forex trading market. Its power to harness the concept of social networking and apply it to FX trading gives new traders a fast-pass ticket into the currency trading arena. Here are the top 5 ways in which social trading can assist a brokerage’s conversion efforts:
- A trader who does not know how to trade may feel more comfortable when able to mimic a more experienced trader’s behavior.
- One thing we often hear from traders is that they feel alone when trading. With social trading, traders are able to feel as part of a community and this will be enhanced even more as tech providers make an effort to launch features that make social trading more, well, social.
- With social trading, traders are able to understand market sentiment and gauge the risk level of the market by sharing their trading activity and experience.
- The ability to “watch” a master trader’s activity, even in demo mode, allows new traders the opportunity to study a master’s trading strategy, making it a wonderful learning tool.
- When a trader is able to see all of a master’s trades (pending orders, open and closed trades, etc) he tends to become more comfortable and trusting of the platform and the broker. This level of transparency can help level the emotional hurdles a trader faces when converting.
Written by Gadi Rosenfeld, Social Trading Product Manager at Leverate