The Social Component in Currency Trading

Knowledge is power. It is true everywhere. A fundamental attribute of knowledge is that it is accepted. The acquisition of knowledge happens when it is shared. Knowledge transfer experts will verify that 'socialization' is an important process to transfer tacit knowledge from one person to another. Tacit knowledge is the knowledge which is embedded in…

Knowledge is power. It is true everywhere. A fundamental attribute of knowledge is that it is accepted. The acquisition of knowledge happens when it is shared. Knowledge transfer experts will verify that 'socialization' is an important process to transfer tacit knowledge from one person to another. Tacit knowledge is the knowledge which is embedded in our minds. This is more experience oriented. Tacit knowledge is considered a personal or corporate asset. Individual experience is enhanced by shared experience. Successful knowledge sharing does not need computers or documents. It needs people to people interaction and spontaneous conversations.

The trading market, like any other financial investment activity, is a community affair. It is not a voluntary person sitting in front of a trading terminal. Trading is a sentiment driven market. So when too many people carry the same sentiment and talk openly about that sentiment then it becomes a market trend. In the equities market social media has increasingly played an active role for some time now. Many analysts now incorporate the Twitter sentiments as a quick checking of the market pulse. Traders who are participating in the social trading networks benefit from what can be called 'wisdom of the crowds' or 'group thinking'. Trading activities and quick analysis are incorporated into these social media or discussion boards. So anyone looking for some guidance about some decision or position he wants to take can look at these cross roads of ideas. Many traders and independent individuals find this better than any expensive expert advice. It is their belief that opinions of millions of people are more vital than the paid advice of some experts.

In its increased usage of social media and bulletin boards, online currency trading is catching up with the developments in the currency market. Many traders and retail investors find the social media a valuable platform to get opinion on real time. They like to chat with fellow traders and investors to feel the market sentiments. Since everyone in these communities share the same objective, exchange of ideas, mistakes, successes and opinions form a shared knowledge bank. Listen and learn is the spirit of such knowledge communities. The idea has gathered so much momentum that many trading platforms now have built in proprietary social software. These social platforms are dedicated for the members of the paid communities. They can discuss market movements, seek advice, exchange ideas and get inputs to take up positions in the market.