How Social Media Has Influenced Online Trading
Online trading, be it forex, stocks or crypto, has changed
dramatically over the last decade or so. The advancement of the internet, the
relaxation of regulations and the willingness of everyday people to delve into
what was once the preserve of big financial institutions and professional
traders only, has seen forex trading grow into a multi-trillion dollar a day
industry. However, there is one unsung hero when it comes to online trading,
and that hero is Social Media.
Social Media in its many forms has been essential to the
growth of online trading. Although ‘Social Trading’ – a
form of investing that allows investors to observe the trading behavior of
their peers and expert traders and to follow their investment strategies using
copy trading or mirror trading – is becoming more and more popular amongst
traders, it is the early days of Forex, LinkedIn, Twitter, WhatsApp and now
Telegram that have propelled online trading to the masses.
Initially, the draw of instant posts saw forex trading
groups, pages and people able to communicate instantly; essential when there
are just seconds to make a trade. Forex trading thrived with Facebook and
Twitter. The instantaneous method of communication enabled traders from around
the world to follow news, events and signals as they happen. The various
Facebook groups and pages enabled traders of every level to swap ideas, discuss
trading and form kind of support groups. Professional forex mentors sprang up
with massive global followers, passing on forex
trading signals to a growing receptive crowd.
However, Social media hasn’t always been a force for good in
online trading. Anyone versed in the world of Binary Options will tell you how
Ads on Facebook roped in tens of thousands of people into a form of trading
that nine times out of ten, was just a shady Ponzi scheme, designed to fleece
the unsuspecting trader out of whatever their credit card could manage. Once
the truth about Binary Options came out, Facebook eventually banned all binary
options advertising, as well as clamping down on crypto advertising.
As one door closes, another one invariably always opens. In
Social Media, the new door opening was the world of WhatsApp and Telegram
groups. Facebook’s algorithm and greed limited the audience, whilst a general
apathy towards Facebook’s ethics saw the online trading and Facebook
partnership peak and decline. Around the same time, people started turning to
WhatsApp and Telegram for the instant news, signals and knowledge sharing.
Traders still used and continue use Facebook, LinkedIn and
Twitter to communicate, stay in touch and keep close to trading and traders,
but the dynamics have changed and keep on changing. Trading is different, we
have crypto trading now and traders’
expectations from social media are greater than ever before.