How did eToro transform online stock trading into a social activity

If you have any experience with online stock trading, you may be familiar with eToro, which is an online stock brokerage and social trading platform that allows you to gain access to all the necessary stock trading features, with an added benefit of being able to copy the strategies of successful traders, exchange ideas, and form communities around particular investment ideas and trading strategies. 

As one of the pioneers of social stock trading, eToro has retained its relevance and remains as one of the most popular stock trading platforms on the market today. 

The rise of social trading has had a major impact on how individuals interact with the financial markets and what their expectations are of brokerages. 

How has eToro played into this change in trading philosophy and what implications may it have on the financial markets of the future?

How does social trading work on eToro?

When clients sign up, they should not only expect to buy Apple stock on eToro, rather, they have access to the portfolios and strategies of some of the most successful traders on the platform, who they can follow and copy by implementing similar or the same approaches to what to buy, when to buy, and when to sell. 

This allows clients to learn more about which strategies are more effective and why, which leads to the accumulation of more experience without as much trial and error and incurred losses. 

CopyTrading is only one aspect of eToro’s social trading features. The broker also includes a social feed where users can interact with each other, discuss trading strategies, share insights, and follow other traders. This helps create groups around specific strategies and instruments - leading to more knowledge-sharing and a sense of community. 

Why is social trading becoming popular?

The rise in popularity of social trading can be attributed to an increased number of people entering the stock market from around the world, which increases the demand from first-time traders to be able to interact with and learn from more experienced traders. 

Furthermore, traders who are exceptionally successful can form communities around their trading and investing activities - becoming investment influencers of sorts, which opens up many opportunities in other channels as well. 

The effects of eToro on the approach to stock trading

As we have already mentioned, the rise of eToro has had significant implications on how individuals trade stocks and what features they now expect as standard when signing up with a new stockbroker. 

Mainstream social stock trading

The growing popularity of eToro and social trading in general, has pushed the approach to the mainstream, with the assumption of beginner traders forming to include social trading as a default feature of any reputable stock broker. 

Many other stock brokers now offer some aspects of social trading to their clients in order to stand out and gain a competitive advantage. 

Due to an increased accessibility towards stock trading, more and more traders look to more experienced market participants to emulate their strategies and boost returns. 

Democratization of financial markets

The rise of social stock trading has given way to a wider-scale democratization of the financial sector, which includes multiple asset classes, including alternative investments such as real estate, collectibles, art, fine wine, cars, etc. 

New and emerging trading platforms now come with the social trading aspect built-in as standard, which allows clients to interact with each other, exchange ideas, and form communities, which lends itself to a more inclusive financial ecosystem and more retail funds flowing into the financial markets. 

Future prospects of social stock trading 

As more and more people start stock trading and enter the market, the appeal of social trading is likely to increase further. 

Brokers like eToro and others give newcomers the opportunity to form communities and learn from personal experience, as well as the experience and performance of other traders, which boosts the chances of developing a successful trading strategy by emulating profitable traders and incorporating their approaches into personal methodology. 

The advent of AI further improves the efficiency of social trading platforms is terms of gathering trading data and presenting it to existing clients, while also improving copy trading capabilities.