Ever since the financial crash in 2008, this hasn’t necessarily been the case and now, in 2014, scapegoating for problems seems to be worse than it ever has been before. Banks and large trading institutions may have caused some of the problems that ultimately led to the crash, but small scale investors were also causing issues.
Here we will look at ethical trading and how the concept of social trading allows us to trade in a manner that allows us to keep a clear conscience.
What Do We Mean By Ethical Trading?
When the financial crash happened, many banks and institutions were punished for unethical trading. This means that they invested money in areas where they shouldn’t have, gambling money that wasn’t theirs to lose.
Ethical trading on such a large scale would mean that a bank will only spend money that is theirs, or will only use your money if you’ve given them explicit permission to do so (as you can with some types of account). Even then, when a bank invests this money, they should look to invest in products and projects that are perceived to be ethical.
As well as this, as was the issue in 2008, banks must also be seen to be staying within the banking code of conduct, observing rates rather than trying to manipulate them.
How Can Ethical Trading Be Practiced On A Small Scale?
Although many banks have had issues with the law and unethical trading in the past, single, small-scale investors have fared much better and, the majority of the time, they are trading well within the code of conduct.
If you trade at home on a trading platform, it is highly likely that you’re already what is considered to be an ethical trader; staying within the rules and only trying to make an honest living.
Issues with individual traders generally only arise when people are given access to insider information; something that is both illegal and immoral.
Passing On The Word: The Benefits Of Social Trading
Social trading acts as an online forum for investors, where people can meet, chat and discuss trades. Because of the fact that brand new investors can speak to those with far more experience, this is the perfect place to spread the message of ethical trading to those who are inexperienced and likely to succumb to pressure.[How much can you rely on social media in your investing?]
Social trading looks as though it could very well be the future of forex trading, and it’s available through almost any ECN broker. With this in mind, now is the perfect time to learn from the lessons of 2008. So, consider the way you trade, ensure it is ethical and spread the word. Together, we can make the world a better, fairer place.