Copytrading
Copytrading means that you choose to copy a trader, and whenever he or she executes a trade, you will automatically do the same. Once you have found a trader you would like to copy with your funds, you do not have to take any further action.
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The best part is that there are no fees associated with this (except for the spread fee, which means the trader buys an asset slightly above its market price and sells it slightly below its market price, and you do the same). So, why would the trader agree to this? Because if the trader is popular and many people copy him or her, they will receive money from the broker.
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Why would the broker do all the work and pay the trader extra? Because the broker also makes money on this, as they receive a spread fee every time a trader buys or sells an asset.
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Advantages of copytrading:
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It's easy to sign up here (it only takes 5 minutes)
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Can be done for as little as $200
Many different investors to choose from. Pick one that you are comfortable with.
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Only takes one click, and you don't have to do anything else.
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If you choose the right trader, it is a win-win-win situation for you, the trader, and the broker. If you are interested in copy trading, you can follow this guide.
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If you want to start doing some copytrading you will need to make a profile at eToro. It takes approximately 5 minutes; however, you must be ready to provide some personal information in order to verify your account due to financial service regulations. Before we proceed any further in this guide, please visit eToro and sign up for their platform by clicking on the "Join Now" button.
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Once you have created your profile on eToro, you will need to deposit funds in order to start investing. You can do it by clicking on "Deposit Funds" in the menu on the left. You can deposit funds through various options, such as credit card or PayPal, and they will be available immediately. When you have added funds, click on "Copy People" in the menu to the left.
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Once you click on "Copy People," you will be directed to the Copytrading menu. In the top, you will be able to search based on your own parameters. Alternatively, you can also view some preselected Popular Investors chosen by eToro. These investors have been categorized into different groups, such as most popular, medium risk, low risk, etc. It should look like this:
Once you have found a popular investor whom you would like to copy, you simply click on his or her profile. I have chosen to go to my own profile, and now I will show you what you can see on every Popular Investor's profile. The first thing you see is the Feed, where you can read the different posts the Popular Investor has written. The post at the top is typically a pinned post, which explains the guidelines for copying that person and what you can expect.
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*Past performance is not indicative of future results.
Next, you can click on the "Stats" tab, where you can see various information about the Popular Investor. This includes their performance, the number of people who copy them, and their risk score.
If you are interested, you can click on the portfolio to see what trades the Popular Investor is making. If you are not well-versed in investing, it may not be crucial. However, since you will be owning the same assets as the popular investor, it can be enjoyable to see what you will own if you copy that specific investor.
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*Past performance is not indicative of future results.
If you click on the chat, you can see how the Popular Investor has performed if you had copied him or her with $10.000. The amount of $10.000 is a default setting by eToro and cannot be changed. It does give you a good idea of the performance of that specific Popular Investor.
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*Past performance is not indicative of future results.
If you have found a Popular Investor whom you would like to copy, simply click on the "Copy" button located in the top right corner.
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*Past performance is not indicative of future results.
When you click on "copy," you need to decide how much you want to copy the person with. You will also need to set a stop loss for your copy. In my particular case, I decided to start with $500. Additionally, I have set a default stop loss at 60%. That means I cannot lose more than 40% of my initial amount. In case the popular investor loses more than 40%, the copytrading will automatically stop. Once you are ready to copy, simply click on the "copy" button and eToro will handle the rest. You are now copying that person, so whenever he or she makes a trade, you do the same. Do not be alarmed if your copytrade starts with a negative balance. It always does, as you have to pay the spread fees that I previously wrote about.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
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Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
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Past performance is not an indication of future results.
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Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework.
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eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.
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