Social media are popular platforms for sharing and exchanging information, and interacting with friends or people with common interests. It is an entire community of friends, family, and other networks. Newsfeeds are endless sources of information on random topics, on motherhood or business or books.
More importantly, users trust the community that fills their newsfeeds. They trust on the basis of a shared relationship that exists on the platform and for some, off it. Social trading is designed the same way. Traders become part of a community where the users share information, tips, and tricks to succeed at trading. Not surprisingly, this kind of trading has become increasingly popular with women.
What is Social Trading?
Social trading is a means of trading (usually day-trading) that is lower in risk and helps new traders learn the ropes in real time. These have their own platforms in the form of apps or websites, such as TopTradr. Users log in to follow traders, study the “updates” posted in the feed, and to trade directly or copy top traders’ transactions. The community is interactive, so users can even exchange ideas or discussions on the tips and stories posted.
Why Do Women Prefer Social Trading?
The rate of women joining trading is on the rise. On the trading floors, the number is still quite low as men rule the floor, while only a few women break through. However, online trading for women is on a definite rise. In the UK, female traders have increased 46% in the past year . This is in part due to the influence and flexibility provided by social trading. So why are women jumping on board this current form of trading?
First, women take fewer risks than men. Women traders diversify their investments and have higher cash firewalls against possible losses. Because social trading is a trading platform where users can follow top traders, studying their techniques and tips on transactions with no limit, it is attractive to female traders.
A user can wait until she is comfortable with how the system works to begin trading. She can also usually find somewhere to demo-trade for free, so she gains experience before touching a trade. Because social trading is community-driven, users can interact to lessen mutual investment risks.
Second, women tend to research more on trading options and risks. Before entering into a venture, women research what the kinds of investments are, the chances for success, the successes, and all the possible risks. While this might make them out as “less brave,” it pays off on social trading. With a community-based guide, they can quickly and easily verify the tips they learn.
Third, women traders lose a lot less than men in trading, on average. In looking at losses, men (altogether) tend to lose 60-70 thousand dollars, in a daily set of transactions. Women rarely lose more than 50 thousand. This is directly connected to their cautious trading and extensive research. Social trading is the perfect platform where they can maximize both. This makes social trading a highly profitable trading platform for women traders. It is a platform that allows them to profit more while catering to their strengths.
Most importantly, it comes down to the flexibility provided by social trading. Through apps and software, social trading can be done from the comfort of the couch , whether it’s doing research, sharing information or the act of trading itself. It’s a new generation of trading that is accessible to women in an unprecedented way.
Social Trading: A Sound Financial Tactic
Even today and with the advancement of women in finance, men still dominate the trading floors, making it difficult for women to break through. However, social trading is proving to be a game where women are making a strong impact and finally getting a foot in the door of an otherwise competitive industry.
Dana Green has been an independent financial adviser for the past 6 years, after completing her masters degree in finance. She is passionate about increasing women’s role and visibility in the finance industry. Dana is happily married and has two lovely daughters who take after her love for her mathematics.
(Photo source: Pixabay)