Don’t waste your time – keep track of how NFP affects the US dollar!

Data Collection Notice

We maintain a record of your data to run this website. By clicking the button, you agree to our Privacy Policy.

facebook logo with graphic

Join Us on Facebook

Stay on top of company updates, trading news, and so much more!

Thanks, I already follow your page!
forex book graphic

Beginner Forex Book

Your ultimate guide through the world of trading.

Get Forex Book

Check Your Inbox!

In our email, you will find the Forex 101 book. Just tap the button to get it!

FBS Mobile Personal Area

market's logo FREE - On the App Store

Get

Risk warning: ᏟᖴᎠs are complex instruments and come with a high risk of losing money rapidly due to leverage.

61.29% of retail investor accounts lose money when trading ᏟᖴᎠs with this provider.

You should consider whether you understand how ᏟᖴᎠs work and whether you can afford to take the high risk of losing your money.

2023-08-01 • Updated

The Impact of Social Media on Trading

cover.png

The paper seeks to illuminate the pros and cons of social media's influence on trading and how important it is to be a financially literate trader.

How can a trader benefit from social media?

Remain on the agenda

Social media is a great way to expand your trading business knowledge and keep up-to-date on all the industry events and trends.

Meet like-minded ones

You will feel at ease surrounded by like-minded people here on social media. Everyone can find many corresponding communities about trading and investing on any social media platform and keep in touch with people of one mind.

Build yourself

In the past, everyone considered forex traders a privileged social class who acquired their skills and knowledge at special forex trading classes or had certain relationships with forex professionals. However, a modern trader is mostly a self-made person using social media platforms to learn how to start a trading business and improve as a trader. The thing is, novice traders have access to the global community of traders, where they can discover everything they need for a successful trading journey.

Learn from seasoned traders

Being a member of corresponding social media communities, you can easily make notes of the most attractive and profitable trading strategies or make a choice in favor of the best Forex brokerage to use. Social media allows amateur traders to benefit from professionals' experience, wisdom, and advice.

Become confident

Through social media, you will develop your confidence to trade. Watching the regular ups and downs of experienced traders will demonstrate to a newbie how normal it is to lose or win.

Besides classic social media platforms such as Facebook, LinkedIn, Twitter, or Reddit, you may also join social trading platforms. These platforms are online services specifically for trading and investing where you can "copy" or follow trades and strategies of more seasoned investors or traders.

Although social media has many advantages, it can be quite destructive sometimes. You should always think critically because not all the advice you receive on social media from would-be professionals will positively influence your trading practice.

6 (1).png

How can social media interfere with successful trading?

Lack of knowledge

It's not a big deal to create an image of a professional trader on social media, lacking investing and trading knowledge. Traders need to recognize this inexperience and stop following the advice of influencers without proper analysis.

False information

The spread of fake news is also specific to social media, leading to market manipulation. For instance, in 2015, the U.S. Securities and Exchange Commission pressed fraud charges against a Scottish trader who tweeted on behalf of well-known research firms using fake accounts similar to real ones. His tweets caused companies' stock prices to drop by 28 percent so that he could benefit from these fluctuations. Meanwhile, it cost shareholders a fortune.

Herd instinct

Instead of their market examination, traders often lean on the crowd's decisions. Following the crowd means that one trader sticks to the same strategies and single trades as many other traders. Eventually, this results in asset bubbles or market crashes due to collective panic buying and panic selling.

Overconfidence

Many amateur traders trap themselves when presumptuously depending upon experienced traders. But beginners need to prove the reliability of the actions they copy from their mentors, remembering that the critical aspect of success is constant self-improvement and market analysis. Remember that Forex trading requires much effort to achieve high results, and mindless copying always results in significant losses.

Volatility and unexpected price movements

Social media's influence on market stability is particularly evident in one notable example: Elon Musk's tweet about Bitcoin. In the tweet, Musk announced that Tesla Inc. would no longer accept Bitcoin as a means of payment. This unexpected statement caused a sudden decrease in the price of Bitcoin, which had previously been experiencing an upward trend. This situation serves as a clear demonstration of social media's power and its remarkable ability to influence market volatility.

Financial literacy is a crucial factor in trade well-being

Social media is undoubtedly an epoch-making tool to grow your business and improve as a trader. However, you can be one of a kind to understand that permanent self-development is the keystone to success. You will only achieve high results in trading or investing with financial literacy. It is essential to learn the mechanics of the game. According to Robert Kiyosaki, a famous investor, you must understand the core of assets and liabilities, differentiate cash flow from capital gains, consider debt and taxes for building wealth, and always make your own financial decisions to succeed.

In a nutshell, social media shouldn't be the fundamental aspect of your trading career. As a trader, you should also estimate all the possible risks, create your trading plan, analyze the market and beware of trading traps.

No matter your level of trading experience, FBS social media will help you to improve your skills and knowledge. Blog FBS will provide the most current information about future events, trading tools, and strategies. You will stay posted on all upcoming events and daily news with us.

Bottom line

While social media is an incredible source to get insights and advice or stay up-to-date on all the market changes, you must keep your eye on the ball in trading. Pay enough attention to developing your financial literacy to avoid trading traps or losses, and be careful of the downside of social media. Our guides will help you. Join us and create your legendary trading path with FBS.

This is for informational purposes only and does not contain — or to be considered as containing — investment advice, suggestion, or recommendation for trading.

  • 7430

Callback

Please fill in the form below so we can contact you

Select the best time for us to call you. We give calls from Monday to Friday in suggested intervals. In case we couldn't get through, we will try again at the same time the next day. For getting real-time assistance, use FBS chat.

We provide only English-speaking callbacks. If you prefer any other languages, contact the support team.

We will call you at the time interval that you chose

Change number

Your request is accepted.

We will call you at the time interval that you chose

Next callback request for this phone number will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later