eToro Social Trading Platform

One of the main advantages of eToro’s online trading platform is an opportunity to communicate and copy experienced traders automatically. This post aimed to provide an in-depth eToro Social Trading review, explain the key features of the eToro social trading platform and show examples of how to follow traders or invest in CopyPortfolios on eToro.

What is eToro Social Trading? 

eToro CopyTrade is a feature on the eToro social trading platform that allows you to follow successful traders automatically and invest in CopyPortfolios managed by professional investors. eToro social trading platform is very similar to social media platform where traders can share their market views, exchange trading ideas for different asset classes and follow top-performing investors. This approach is beneficial for beginners making their first steps in investing and exploring trading in the financial markets.

eToro social trading platform might be also attractive for experienced traders who want to test different investment strategies, exchange ideas with the trading community and build a following of investors. 

Is eToro social trading a scam or legit? Our verdict

eToro is one of the largest online brokers and social trading platforms, with tens of millions of users globally. It has multiple offices, including the United States, and is regulated in all major jurisdictions and backed by some of the largest institutional investors. As a result, we consider the eToro social trading platform to be one of the most reliable on the market. However, it is essential to remember that trading CFDs can result in possible losses, as clearly explained in disclaimers.

When it comes to Copy Trading, eToro assigns a risk score to each trading strategy and CopyPortfolio, which depends on volatility and drawdown, so investors can know what potential performance and losses can be. While past performance is not a guarantee of future results, eToro Copy Trade features can give a decent indication of what to expect from each particular trading strategy.  

eToro Social Trading Platform Explained – Desktop & App Features

At first glance, the eToro Social Trading Platform looks like a social media platform dedicated to trading enthusiasts. Beginners can communicate with top-performing traders, read their posts about their market views, make trading decisions, and copy trades they like. Also, newbies can gain learning-by-doing experience as all traders’ pages have a feed section where they share opinions about the most attractive assets to invest in, what tools to use for the market analysis, and which trading strategy is profitable.

eToro Social Trade platform provides data about each trader’s past performance, including the investment return, risk score, and the current number of copiers. In addition, potential investors can get feedback from other followers regarding the performance of any particular trader. There is also an advanced search engine, allowing investors to select eToro traders to copy based on several factors, including portfolio allocations, maximum daily and weekly drawdowns, average trade volume and number of profitable weeks and months.

eToro Copy People section has an Editor’s Choice section where eToro staff recommends best-performing and most famous traders. In addition, several rating methods such as Top, Trending and Most Copied traders are represented on the main page of the eToro Copy People section of the trading platform. According to the multi-factor selection, you can sort the best eToro traders by the lowest risk score provided by the broker. All this gives eToro users an extensive choice when it comes to copying best-performing traders.

eToro Social Trading also has a mobile app that allows you to invest on the go. The mobile app is straightforward to use, and you can monitor your trading positions and place trades from anywhere in the world. 

Is there a Demo for copy trading?

eToro social trading free demo account provides all of the trading platforms features in actual market conditions. The market quotes, fees and commissions related to opening trade deals are the same per a real-money trading account. 

Once a new user signed up, the demo version of the platform provides you with  $100K of virtual currency to practice trading and check out the platform’s functionality, including eToro Social Trading. It helps beginners understand what possible results they can achieve from trading in the financial markets and what profits can be made by following the best eToro traders without any risk of losing money. In addition, the Demo account for copy trading is a perfect solution for newbies to know how trading in the financial markets works. 

New users can also choose whether they want eToro to copy open trades or not, as they can start following a trader only when a new deal opened. That helps investors to avoid additional risks related to a late entry into the market. Investors can also adjust the settings of the copy trade algorithm and limit potential losses by a stop-loss order. Every open trade can be closed manually, while investors can decide to stop following a trader at any time.

But it is also important to remember that the eToro social trading platform also allows you to follow traders with demo accounts. And, beginners should be aware that such traders with demo accounts can use hazardous trading strategies as they do not risk real money and take more risks.

How to choose traders to follow on eToro?

Before choosing traders to follow on eToro, investors should understand their investment style and what risks they are willing to take. The key questions you need to ask yourself are as follows. 

• How much money am I willing to invest? 
• What is my investment horizon – is it short-term, or am I prepared to hold on to my investments for 6-12 months?
• What investment returns I would like to make, and how much money am I prepared to lose (usually, higher returns come at higher risk)?
• How will I react if my investments go down 10%, 20% or 30% in value? Can I be calm, or would I be nervous?

It recommended that novice traders start with a lower risk investment strategy to familiarise themselves with the market. Thus investors should select eToro traders to follow with the minimal risk score. Another essential metric to consider when choosing a trader to copy is drawdown. 

Usually, strategies investing in equities can deliver high long term returns but can be pretty volatile in the short term. A drawdown is a performance statistic demonstrating how much the portfolio can go down in value during a specific period (like a week, month or year). Usually, investments in equities will bounce back over a certain period, but you need to be prepared to sit and wait for the performance to recover. If your risk tolerance is low, you might need to liquidate your trading position at the bottom of the market, and that can result in significant losses. 

Other important metrics to look at when choosing the best eToro traders include investment performance, the number of consecutive profitable weeks and months, and the frequency of trades. Some traders might have successful periods and losing streaks. Thus investors should select traders with smooth performance. They should also decide whether they want to copy eToro traders with the long- or short-term trading approach. For example, some strategies suggest opening many trades with small volumes but more frequently. In contrast, others count on positional trading with a low number of deals and larger trading volume—all of that data matters for the general result at the end of the day. 

Besides top traders offered by eToro, it is recommended to use an advanced search tool. Investors can filter traders by the number of copiers and monitor the recent change of that number. If a trader gains several followers, then his performance might be attractive for followers. The advanced search also allows filtering eToro traders by country and portfolio allocation. If, for instance, an investor is keen on copying a crypto trader, he can select eToro traders focused on that particular asset class. Or, investors willing on trading stocks may choose eToro equity traders to follow.

eToro Copy traders to follow

We have selected a list of several top eToro traders to follow as an example. 

BalanceAM

Sergei’s Kovalonoks is a trader from Latvia that specializes in trading shares. His stable performance has a record of more than 24 months in eToro. BalanceAM is represented in the editor choice list with several impressive metrics. For example, his 12-months return exceeds 23%, the number of copiers is more than 2500 investors worldwide. In addition, Sergeis’ risk score is 3, which is relatively low compared to other top traders on the list.

OmarETSA

Omar Sosa Afonso is a Spanish trader followed by more than 5000 eToro copiers. His return is impressive (+59.44% last 12 months), and the volume of copy assets under management (AUM) exceeds $5 million. The screenshot below shows Omar’s monthly performance, which might concern investors with small account balances, as his drawdown reached 7% in July 2019. The average risk score was also relatively low (3 in the last seven days), but the maximum weekly drawdown of 17% suggests a deep trading account to follow this trader. Omar’s portfolio consists of currencies, commodities and stocks.

AreteCapital

Shawn is a promising trader from Singapore with more than 50% allocation for cryptocurrencies in his portfolio, an average risk score of 3 and 7-months record on the eToro social trading platform. Check Arete Capital profile. 

What are eToro CopyPortfolios

eToro Social Trading Platform also provides its users with the opportunity to invest in CopyPortfolios – a range of portfolios created by the eToro in-house investment team. Top Trader Portfolios track the performance and invest in the strategies of the best performing traders on the eToro platform. This is an excellent way to diversify your investment without doing much of the work. For example, instead of trying to find the best traders yourself and then constantly monitoring their performance (to make sure it does not slip), you can now invest and buy crypto with eToro Top Trader Portfolios and have exposure to 10 or 15 best-performing trading strategies. 

eToro investment committee is also developing Market Portfolios – a range of thematic portfolios that invest in different sectors – technology, cryptocurrencies, internet, consumer and many other industries. This investment product works very well if you have a firm conviction about the particular industry (internet, for example) but don’t have time (or don’t want to take the risk) of researching/investing in individual names. 

Top traders or assets in Market Portfolios are picked and re-balanced automatically to meet requirements for predetermined investment strategy thanks to an innovative algorithm.

CopyPortfolios works similar to investment funds with a minimum investment amount of $5,000. eToro does not charge additional commissions for CopyPortfolios except trading-related fees such as the spread. Investors can stop their investments at any time. The portfolio’s open deals will be closed at the current market rates.

How to Invest in eToro Copy Trade or CopyPortfolios

New users have to register with eToro by filling out a short form or sign up with a Facebook or Google Account. The registration process is simple and takes a couple of minutes to start investing in eToro Copy Trade or CopyPortfolios. 

Once registered and signed in to the platform, new users will get to the main page with a navigation menu on the left side of the screen. To invest, users should choose the real account, deposit funds with any preferable method and select the ‘CopyPeople’ or ‘Invest in CopyPortfolio’ section.

After selecting a trader in the CopyPeople section, investors should click COPY, as shown in the screenshot below.

In a pop-up window, investors should set the investment amount they wish to allocate to copy this particular trader, set the stop-loss level in USD or percentage of the investment amount, and decide whether they want to copy already open trades or start copying the trader with new trades only. 

After clicking the COPY button, the trader will appear in an investor’s portfolio.

When investing in CopyPortfolios, investors should take the same steps. 

Select Portfolios you would like to invest in. 

Once you check that you are happy with the portfolio and the allocations – click INVEST button in the right top corner. 

Enter the amount you would like to invest in the CopyPortfolio in this particular trade. 

 After that, you will see it in the portfolio section, where you can regularly monitor all your investments’ performance.

eToro Social Trading – Fees & Costs

eToro Social Trading fees include only broker’s commissions related to trading such as spread (the difference in buy and sell prices for an asset) and swap (commission for rolling the trade over the night or weekend). eToro also has a flat withdrawal fee of $25 and a conversion fee (both deposit and withdrawal) for investors interested in other currencies of the account balance except USD. There are no additional charges in eToro CopyPeople and CopyPortfolio.

Can I make money with eToro social trading?

eToro social trading platform is intuitive and suitable for novice investors in the financial market. With a proper selection of eToro traders to follow automatically, even beginners can make money in the financial markets. Although past performance does not guarantee future results, investors should choose eToro traders with minimal risk scores and the lowest drawdown. Most profitable strategies and portfolios generate double-digit yearly performance. Examples are shown on several screenshots below.

eToro Copy Trade review – Conclusion

eToro is one of the largest social trading platforms and best CFD brokers with more than 11 million users worldwide, backed by some of the largest institutional investors and VC funds. eToro has a large community of experienced traders specializing in different trading strategies that demonstrate strong performance and investment returns. eToro is a regulated broker. It has a cutting edge trading platform and an experienced investment committee responsible for managing CopyPortfolios. 

Social trading is prevalent among beginners. It helps to learn different trading styles, explore the wide range of investment opportunities in the financial markets and make good money with minimum work just following experienced traders with eToro Social Trading or investing in CopyPortfolios.

We consider eToro to be one of the best social trading platforms currently available on the market. We would highly recommend it if you are interested in investing in financial markets and learning from the best traders. 

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