As we all know, we have now entered the era of social media. Whether you want to reconnect with a high school sweetheart, meet new friends, or simply share the delicious meals you’ve cooked, social media is a great option. At the same time, social media marketing has become a core channel for businesses to promote their products and achievements.
Businesses across all industries are maintaining a strong presence on social media, giving it an unprecedented impact on the global economy. The forex trading industry is no exception; after all, brokerage firms with comprehensive social media networks—which represent the latest cutting-edge technology—serve as a symbol of the practical tools, valuable information, and core advantages they offer to traders.
If you’re still considering whether to add social features to your online brokerage business, the answer is simple: “Yes.” Here are the top five reasons why you should:
Five Reasons Your Forex Brokerage Needs a Social Trading Network:
1. Enhance Your Platform’s Credibility
Showcasing traders’ successful investment performance on social platforms can lend credibility to a brokerage firm—a level of credibility that cannot be achieved or matched through internal efforts alone.As the saying goes, “Victory belongs to the victor; defeat to the vanquished.” Once a successful trader is featured on the platform’s leaderboard, other traders will be inclined to emulate them, because the person being emulated has invested their own money in that strategy—unlike traditional brokers, who dare only test the validity of investment strategies using other people’s funds.Therefore, fellow traders—especially those with a proven track record of success—carry more credibility than brokers.
2. Leveraging the Herd Effect in Social Trading
Ask any human resources manager what the secret to a high-quality work environment is, and they’ll tell you “team spirit.”People enjoy belonging to a group, being part of it, and connecting with others who share common goals. Brokerage firms that have embraced social trading have seen their client engagement grow exponentially, because these clients want to be part of the community and integrate into the team.
3. Leaderboards Can Foster a Sense of Achievement
It has been proven that what drives traders to participate in social trading is not only the desire for good advice but also the need to show off their success.Just as social media is the platform of choice for showing off, so is social trading. Traders share their successful investment experiences because it gives them a sense of accomplishment—and this feeling is amplified when their names appear on leaderboards of top-tier investors.Of course, there are also those who genuinely want to help others achieve better investment returns, and nothing makes them feel more accomplished than seeing others follow their lead and use the same investment strategies.
4. Gamification
Leaderboards, missions, badges, and points awaken traders’ competitive spirit. Once they enter the social trading circle, records are there to be broken, challenges begin, and investors find this competitive dynamic endlessly engaging.Broker-led gamification has brought a new level of enjoyment to the forex investment industry. At the same time, as long as the competition is between traders themselves—rather than between brokers and traders—it does not create regulatory conflicts. Beyond financial returns, gamification provides traders with a unique sense of fulfillment.
5. Improving Sales Team Productivity
If you give your students two options for a project: spending hours on their own research and discussion, or simply copying the conclusions of a top student, I believe most would choose the latter. Especially when they realize they won’t be penalized for it—and are even encouraged to do so—nearly everyone would opt to copy the top student’s conclusions. This assumption applies equally to forex trading.Beginner traders can significantly shorten their learning curve by replicating the trading strategies of successful traders, while experienced traders can also benefit from those with higher success rates than their own.For traders seeking a shortcut to success, social trading features become extremely appealing. When supported by risk management tools such as stop-loss and take-profit orders, your forex sales representatives’ jobs become much easier. As a result, your sales team’s workload decreases while your revenue increases.
Does your forex trading platform want to include social features?
Now, you have the opportunity to easily implement social features through Leverate’s Sirix white-label platform.Sirix is a web-based trading platform compatible with all operating systems and available on desktop, web, and mobile apps. Not only can your traders benefit from the expertise of award-winning master traders, but they can also participate in social trading from virtually any device.More importantly, by offering traders the social features they crave through Sirix, you can gain a competitive edge over your rivals.
The Rise of Social Trading
The concept of social trading originated in 2005, the year algorithmic trading models were first introduced—one of the earliest methods to facilitate market entry through the exchange of knowledge and trading history. Algorithmic systems allow traders to share their trading records so that others can learn from and replicate them.Initially, experienced traders would communicate their intentions to open or close certain trades to their followers via newsletters or email. Later, trading chat rooms provided a single channel for traders to post their trading activities, while also making it easier for followers to find and replicate trading strategies.
As trading chat rooms continued to evolve, the idea of replicating successful traders’ strategies gained widespread acceptance and created a sensation within the trading community. At the time, traders were actively seeking various ways to improve their success rates in the market and had already reaped the benefits of replicating the trading decisions of investors they considered successful.Consequently, the concept of social trading gained increasing popularity, while trading platform providers sensed a massive business opportunity. They therefore directed their development teams to create social features, which eventually became essential components of trading platforms.
New technologies and advanced platforms have made it easier and more motivating than ever for traders to leverage social networks. Experienced traders are motivated to share their strategies by the prospect of financial rewards and prestige—social trading platforms typically feature leaderboards based on popularity and success rates.Followers are motivated to emulate masters because they can spend less time learning effective techniques—inexperienced traders can replicate existing strategies from more skilled traders and achieve the same returns as the masters.Brokers are motivated to offer social trading networks because they can provide a single, self-directed service to both amateur traders and seasoned investors—brokers with strong social networks can easily increase client conversion and retention rates.
Brokers with social trading networks can generate higher profits
In an increasingly competitive industry, offering social trading features on your platform will give your brokerage firm a significant edge over competitors. Providing clients with services that align with this generation’s trading habits and foster social engagement is highly appealing to those still deciding which platform to use for trading.Offering traders a regulated platform licensed in one of the following jurisdictions—Cyprus (CySec), South Africa (FSCA), or Belarus—can provide a significant advantage for your social trading platform, as regulated brokers hold the upper hand in the forex industry.
Having a platform that offers clients social trading not only helps improve your company’s client conversion rate but also boosts client retention. Products and features that encourage clients to engage with the community—and that are both competitive and rewarding—are a winning strategy for a company to stand out from the competition, helping to enhance client retention, trading cycles, and overall business performance.
If you need proof of why customer engagement is crucial to a company’s revenue, just look at the business models followed by industry giants.
Google provides its employees with engaging public and office spaces, so even when they work more than 14 hours a day, they don’t complain. Because employees are having fun, Google gets what it wants—happy and loyal workaholics.Similarly, the more time a person spends browsing Facebook, the more likely they are to post and share content, “like” posts, or leave comments on the platform. Facebook users remain active and engrossed on the platform for hours on end, while Facebook can market an endless array of products to its customers through online ads.
In the trading industry, a broker that offers its users an engaging social trading platform will keep traders trading on the platform for hours on end—and from that point on, the trading figures speak for themselves. Reports show that 84% of companies committed to increasing customer engagement have seen a significant increase in trading volume.
If social trading features are implemented effectively for traders, the average trader’s trading cycle can be extended by 14%—or nearly one month—trading activity can increase by more than 50%, net deposits can rise by 32%, and a broker’s trading volume can grow by 40%. All of these figures indicate that social trading features can significantly increase the value of each trader.
Best Social Trading Platforms: Give Your Traders What They Want
Those who began trading online in the 1990s didn’t have many options to turn to, and the few companies offering online trading didn’t have to do much to attract clients. Back then, a company simply had to bill itself as the “best trading platform” to draw in customers. Today, however, online brokerage firms are springing up faster than mushrooms after rain.Nowadays, with hundreds of trading platforms available to traders, they no longer make the decision to invest in a platform lightly until they have thoroughly researched it. Therefore, a broker that offers traders top-tier forex CRM, multi-asset trading, seamless order execution, and fast withdrawals will stand out from the crowd.
Offering everything needed for trading, combined with an active social trading network, is immensely attractive to traders. Whether you currently own a brokerage firm or are looking to learn how to start a forex brokerage, one thing is certain: incorporating social trading features is the only way forward for brokerage firms.
Equip Your Brokerage with Social Trading Capabilities Today
Social trading has become an essential feature of trading platforms. Experienced traders want to share their strategies, while less experienced traders want to replicate those who have already proven successful. Now, you can keep pace with industry trends and easily build a social network for your forex brokerage business through Sirix’s white-label solution—the industry’s leading social trading platform today.Your traders will benefit from access to a large, active social trading community that fosters user interaction and encourages participation through engaging and rewarding trading experiences. Your brokerage will also benefit from improved client conversion rates, retention rates, and the entire trading lifecycle—delivering greater overall value to your business!
Whether you call it social trading, copy trading, or any other term you’re familiar with—traders have embraced social trading as one of today’s most relevant investment methods. The sooner your brokerage innovates with Sirix’s white-label social trading platform, the sooner you’ll reap the benefits.
Contact Leverate today to learn more about a social trading brokerage solution tailored specifically for you.
Frequently Asked Questions About Social Trading
What is social trading?
Social trading is a form of investing that uses online platforms to allow investors to observe and emulate professional traders. Through social trading networks, traders can participate in financial markets by analyzing financial data, comparing and replicating trading techniques and strategies—often with little to no prior knowledge required.
How does social trading work?
Social networks provide a variety of filterable parameters, offering traders completely transparent and precise information when selecting traders to follow and replicate. Traders can find investors on social leaderboards who match their investment needs and replicate their trading strategies to conduct investment activities.
What benefits can expert traders gain from social trading platforms?
Expert traders act as signal providers; other traders can follow them on social trading networks to trade using the expert’s strategies and methods. This allows expert traders to increase their influence and generate revenue.
How can brokers benefit from providing a social trading network?
Experienced traders want to share their strategies, while less experienced traders want to emulate those who have already proven successful.By creating and offering social communities, brokers can stay ahead of industry trends while also increasing trader engagement, extending trading cycles, and boosting trading volume—all of which create significant growth opportunities for the brokerage firm’s overall revenue and profits.
How can I add social trading features to my brokerage firm?
Through Sirix, the industry-leading trading platform, Leverate offers white-label platform solutions for companies looking to integrate social trading networks into their startups or existing brands.
