Trading valuable assets has been the norm since time immemorial. Valuable commodities, be they gold or silver bullions, stocks, or cryptos, get traded for making profits. However, learning how to trade and register significant profits in the long term is easier said than done. More often than not, new traders lose out on a lot of money and give up trading altogether.
However, the existence of crypto-based social trading platforms like Bidsbee has made it easy for inexperienced people to trade. In this blog post, you will learn what social trading is and what features you should look forward to when selecting a social trading platform for cryptos. Moreover, you will also get an idea of the four best social trading platforms for cryptos at present.
Social Trading And Why It Is The Best Option For New Traders?
Social trading helps you leverage the knowledge and experience of your fellow traders so that you can imitate their trading behavior. Simply put, it allows a newcomer to copy what an experienced player is doing. So, if the market sentiment says that the price of a certain asset will rise in the near future, traders will hold on to the asset for the short term.
For cryptocurrencies, social trading is all the more useful because the price volatility of different cryptos is very high. Even the most used crypto, bitcoin, has shown a huge price variation. Moreover, several factors affect the valuation of crypto.
The governmental regulations and the carbon footprint of mining new crypto are all factors that affect the volatility of crypto. An inexperienced small trader will most likely not be able to keep track of such global changes on a regular basis.
So, social crypto trading that gives you an easy indication of the market movement helps you minimize risks and maximize your profits. Social trading allows you to interact with your fellow traders and gives you the power of information, which, if used properly, can give great returns.
Social trading platforms allow traders to trade for free, but in some instances, some fees may be charged depending on the profits made. Hence, these platforms generally benefit new traders, yet there are disadvantages. The biggest disadvantage of a social trading platform is that it promotes a gambling mentality. Since a person gets information that is readily available, they tend to place high stakes based on the information that they get from the platform.
Another disadvantage is ‘pumping and dumping.’ Some dishonest investors pump up or promote cryptos they hold by sharing fake information and then dump or sell them at falsely inflated rates before they go back to intrinsic value.
Some Great Crypto Trading Platforms That You Must Check Out
Having adequate knowledge about all the platforms that are available in the market is essential for making the most of the market. So here are some of the best platforms that you can surely try.
This platform offers expert tools for both professionals and novices. Moreover, the platform also guides beginners so that their risks are minimized. They offer technical charts and real-time analysis of the best currencies in which you can invest. You can diversify your portfolio on this trading platform, which means it allows you to buy and sell multiple cryptocurrencies.
They allow you to set stop-loss trading limits through automated tools so that your investment in crypto stops when its value falls. You can also earn from this platform by sharing your knowledge and expertise with fellow traders.
Just like Bidsbee, this is a platform that gives you a comprehensive analysis of when to invest and what to invest. One of the best features of this platform is that it allows you to trade in more than seventy-five different cryptos. The ability to trade and have assets in multiple currencies allows an investor to hedge against risks.
Cryptos are, by nature, highly volatile, and each type of currency has its own set of advantages and disadvantages. Bitcoin, the most popular currency, has the largest market capitalization, but it also has a negative carbon footprint. Many countries accept Bitcoin as a legal tender. Ukraine accepted bitcoins as an aid for the war. However, many countries do not recognize bitcoins.
Likewise, Ethereum is next only to bitcoins in terms of market capitalization and is quite popular. Then there are currencies like TRON that have a valuation of less than one dollar and are easily affordable.
This is another great platform that allows you to buy and sell more than two hundred currencies. Moreover, it allows a leverage of 100 X. Leverage helps new or small traders earn larger profits. In trading, if a person invests a large amount, he can make a higher profit than if he invests a small amount.
A leverage of 100 X means that if you deposit $500 for buying, then the platform will let you buy for a hundred times the deposit amount. So you can buy assets worth $50,000.
It is a popular platform that allows you to trade in many currencies. Moreover, they have a reasonable profit margin of five percent of the profit. Exchanges may charge different rates of fees from investors. Usually, two different types of fees are levied on investors.
The first type is known as the maker fees. This is levied when a person buys or sells only at a predetermined rate and not at the prevalent rates in the market. The other common type of fee is the taker’s fee. In this case, the investor is willing to buy at whatever the current rate in the market is.
Social trading has several benefits, like getting real-time knowledge of market sentiments and the ability to interact with peers who have wide experience. In short, buying or selling on such platforms lowers the learning time required to master trading in cryptos. There are several platforms that provide these opportunities to small players, and the best four are listed above.
You can check out more apps and decide which one suits your interests the best. It is essential to keep factors like leverage and opportunities to diversify in mind when choosing a platform.