eToro is considered the best social trading platform in the market and this article reviews the unique eToro Copytrading feature. This eToro copytrading review helps those that want to understand how copying other people’s trades can affect their profit.
In 2011, eToro launched a revolutionary trading tool as an extension of their website: the eToro Copytrader. This fantastic device allows any investor to follow other traders and copy their future trades. It’s like following on Twitter, but instead of just getting to read everything people post, you post the same things.
This extension can be easily accessed through eToro’s website, where you can check rankings from other traders. When you compare the traders, you can search for those who you think will be successful in the future – with a single mouse click you can “bet” a maximum of 20% of your assets on her or him.
How to start
To have access to eToro Copytrader, you’ll need an account. You can join eToro through this link, and set up everything you need to start trading.
Next, you’ll access eToro platform and search for successful traders around the world. You can find them on the tab “Discover” > “Copy People”.
You can search for the name of a specific trader in the search bar, or you can set some parameters like the country these people are in, where they invest in, their gains, and period:
When you find a person you like, you just click with the left mouse button on “Copy”:
Long story short: it’s easy. And you can follow up to a maximum of ten successful traders.
eToro Copytrader reviews
Following are 2 different eToro copytrading reviews I found online: the first one narrates a bad experience in the Copytrader platform, the second is about a positive experience.
The staff of this website opened a demo account to try out the copy trading tool of eToro. They used three-quarters of the $10,000 play money and, after researching and copying 10 traders with high profit and consistent trading, they waited a few months. After some time, they had lost nearly $2,000 (27% of the capital) only by copying traders they thought to be successful.
According to their analysis, some possible reasons for the money loss were identified. Survivorship bias, for example, is the tendency to watch only the performance of “survivors” – some people thrive in the forex market out of pure luck.
Also, strategies can and will stop working overtime – the market changes a lot. Maybe a strategy that worked last year won’t keep working now, and perhaps they followed people whose plans were becoming outdated.
They also discuss the possibility of a market influence that many people copying the same trader might cause. If 2,500 people with lots of capital make the same transactions almost at the exact same time as a trader, the trader’s order might be bloated within fractions of a second.
This guy published a review in 2017 with a different experience with his eToro Copytrading review.
The first month he invested in cryptocurrencies – which by the time had a considerable drop, and he lost some money. From this month on, he started using eToro Copytrading.
After 5 months of using the copy trading tool, this was what his graph looked like:
He recovered almost all the money lost in the first month just by following the right people.
Following the same traders for more 8 months, he continued profiting and thriving. You can check his experience here.
Too good to be true?
It seems like it. You must be wondering: “So I don’t need to study, practice, nor pay attention to the news – I only need to copy people who will do this for me?”.
However, I said before that you can bet a MAXIMUM of 20% of your assets in the trader. That means you’ll still need to study and practice. And you’ll also need to study the traders you are choosing – did you think copy trading was a simple trip to the mall?
eToro will offer you access to the portfolio distribution of the trader and the current open trades. You’ll know the percentage of their balance in each instrument, you’ll access a graph with the number of eToro copiers over time, the number of trades, the profit ratio, etc.
It’s a lot of information – and to copy the right people, you’ll need to know and compare.
It’s still good
Yeah, it’s a lot of work. But eToro has facilitated our lives by adding some research tools and easier resources for investors to review past performances, such as the full trader’s trade history.
The eToro Copytrading homepage features some tips of investors. They have an editors’ choice and a top investors section highlighted on top. Below are some suggestions of traders who are trending, who are most copied, who have a low-risk score, and who have a medium-risk score.
If you’re like me, you have a hard time trusting people, let alone machines.
That’s why eToro introduced a “verified” status icon for the popular investors. People who get this icon have a photo of them and their real name displayed on their profile so that we know they are not robots.
The popular traders get awarded depending on the number of copiers they have – this means they will study harder and trade smarter. Their own money is on stake, plus the awards.
eToro offers fixed monthly commission payments for those with a large number of copiers, while the “elite” traders get 2% annually of the funds under their management plus the commission payments.
Use the advanced search function. Really, this is a game-changer.
You’ll be able to adapt your own strategy to traders with similar strategies – then know who to trust and to copy. Besides the regular elements, you can refine your search to find only those people who had a low, medium or high performance, and people with different ranks of risks – which will depend on your personality.
If you want to trade a lot, for example, you can choose an investor who trades in a higher volume. Likewise, if you want to trade a specific kind of asset you’ll be able to find that on the advanced search as well.
Summary on eToro Copytrading Review
eToro Copytrading platform is handy for people who need to diversify their wallet, and a fantastic resource for those who can use it. The question is: are you willing to learn?
It’s not easier than trading yourself, it’s just different. Just like finding a trustworthy babysitter for a newborn. It’s a hell of a task, we need to research a LOT, but it has a few benefits once done.
What do you think about this eToro Copytrading Review? Let us know in the comment section below!