In the past few years, social networks have become very big business indeed. Sites such as Facebook, Twitter, and LinkedIn are now some of the most frequently used services on the web, with millions of users the world over logging in daily to connect with friends, colleagues, and business associates. Their massive popularity has led to the establishment of a plethora of more specialised, niche networks designed to connect people who engage in shared activities. The advantages are obvious – they allow people to make contact with other people who are active in their chosen field, wherever they are in the world, and share their experiences and expertise. This can be particularly valuable for investors, as having the right information within reach can make all the difference between making a profit and a loss.
For retail FX traders, there has always been a desire to foster a community where you can learn from other traders and share tips and other crucial information. Before the establishment of forex social networks, online forums served a similar purpose, in that they provided a community where forex traders could communicate with each other. While these forums did contain a lot of useful information, they were intrinsically limited, in that they did not replicate the type of interactions that you might encounter in real social situations. Also, they provided no facility for being selective about the people that you were in communication with, apart from private messaging of course.
One of the main reasons for the popularity of forex social networks among online traders is that retail Forex trading is, by its very nature, a solitary activity. Sitting alone at a computer watching news feeds and making trades might well be a very profitable way to spend your time, but it can get a little lonely. Social networks allow traders to meet other people who share their interest in forex trading, so that they can compare notes, give advice, and generally keep each other company while they trade. They bring people together from all over the world that would not have had a chance to meet otherwise. This makes your physical location a lot less important than it might have been a decade or two ago.
Forex social networks have only been with us since 2009, but in that time they have exploded in popularity among retail FX traders. At the moment, forex social networks are limited by bandwidth, but as technology improves you can expect to see more and more features such as video-conferencing and voice communication. You can also expect to see features such as group trading and virtual classrooms taking off in a big way. Many forex networks already offer webinars where experts share their knowledge with retail traders, and members of the network can chip in with questions and advice of their own. These can be an excellent way to increase your knowledge of forex trading, and ask questions of people that you would be unlikely to run into in everyday life. The social networking format enables traders to learn from each other’s mistakes, as well as their successes, and exposes users to lots of different trading styles. Translation technology is another area in which great strides are currently being made, and when it has reached full maturity, you can expect to be able to communicate with traders from all around the world via forex networks, regardless of the language barrier.
There are basically two types of forex social network, those that are provided by Forex brokers for the exclusive use of their clients, and those that are open to anyone. Both types have inherent advantages and disadvantages. The main advantage of a non-independent, branded forex network is that all of the members are trading on the same platform, so they can give each other more specific and relevant advice regarding trading through that broker. On the other hand, these networks tend to have far fewer members, and the discussions on these networks are necessarily limited in their scope. Also, there would seem to be something of a conflict of interest on the part of the broker that provides the service, although this issue is not necessarily confined to branded FX networks. In order for an online community to be a success, there has to be a degree of transparency, and while branded communities have to be overseen by someone from the broker in question, in reality they tend to have little or no influence over the content on the network, other than to remove potentially inflammatory material or add their own contributions.
Independent forex social networks have the intrinsic advantage that anyone can join them, which means that they tend to have much higher memberships, giving users a much bigger pool of trading talent to tap into. However, this can be a double-edged sword, in that a larger community is not always a closer community, and it can be harder to forge useful relationships on these sites. Also, while independent networks can, in theory, boast a greater degree of impartiality, the potential for misinformation and covert advertising is in many ways greater.
So should you join a forex social network? The answer depends very much on your personality and your level of involvement in forex trading. If you only plan to make the odd speculative forex trade, and have no desire to communicate with other traders, then it may not be worth your while. However, if you are relatively serious about FX trading, and want to learn as much as you can about it, then it is strongly recommended that you join at least one forex social network. Of course, there is always going to be the danger that you will be given bad advice or a false sense of security in doing so, but if you enter into it with a healthy degree of scepticism, then you have much to gain by joining a wider community of traders.
By: Clint Starr-ForexTrading
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