Whether you’re a private investor or a stock trader, usually your financial decisions are based on solid information that comes from a variety of sources including news stories, market research and analysis, or even simply the fact that another successful person has made the same investment. Thus, trading and investment decisions are often influenced by socioeconomic factors, especially in today’s social media centered world where sites like Facebook, Twitter, and Instagram are frequented by even the most professional businessmen. So how important is social networking when it comes to making big money decisions? Well, here are just a few ways that many savvy investors and traders are using social networking sites to gain an edge:
1. Social Trading Platforms
A highly effective, yet not-so-well-known way to interact with other traders is to use a social trading platform. These specialized networks let you follow and copy the trading decisions of some of the most successful traders, adding a degree of transparency that makes it easy for anyone to keep track of what the pros are doing. This classic “monkey see, monkey do” approach works well for traders who want to make somewhat informed decisions without having to personally follow the market 24 hours a day. A good example of a popular social trading platform would be the CopyOp app for Android, which instantly gives you access to strategies and trading models used by more than 1 million other traders.
2. Following Market Trends
Aside from social trading networks, standard social sites like Facebook provide a wealth of social knowledge and can be used to keep up with key events in the media. Following certain pages or joining groups related to investing or trading can put you in touch with like-minded people while also presenting syndicated access to important news stories and trends that might be worth looking into. It’s almost impossible to “stay in the loop” in today’s fast-paced economy without actively browsing social networking sites. Furthermore, if the trend carries any weight whatsoever, it will become a popular topic on social media, and many valuable opportunities are fueled or initiated by trends that take off online.
3. Finding New Educational and Motivational Content
Consistently making successful decisions as an investor or trader requires ongoing self education in the form of market research as well as a strong desire to retain and apply that knowledge on a daily basis. Social networks not only make it easy to track trending topics, brands, and opportunities, they also provide ideal platforms for discovering new mentors and edifying material that can be used to help hone your skills. Furthermore, if you need a motivational boost to get you going on a busy day, scrolling through your news feed can do the trick if you’re following the right speakers and thought leaders.
The Power to Influence Markets
Ultimately, social networks and their hordes of users have the ability to not only highlight and spearhead market movements, but to sway the entire direction of markets in many cases. There have been instances where an authoritative person has caused a particular stock to drop with a simple statement. As such, it is important to use your own discretion before blindly following “the next big thing” on social media, as you don’t want to become a trend-happy simpleton just waiting to be steered in the wrong direction.