Congratulations Hustlers for finding this post. This is going to be one of the most valuable posts you will ever read on the internet if you plan to start trading on Etoro. It’s a statement, not an opinion because I haven’t found anyone else writing a post so transparently without trying to get you to copy them on Etoro!
For anyone who doesn’t know this already. Etoro is the world’s first social trading platform. What that actually means is there’s a special unique feather that allows you to copy other traders. It takes a lot of the work out from normal trading, but the trick is finding a good reputable trader to copy. And if you’ve been reading my posts you’ll know I’ve been doing fairly good for myself by simply copying other traders. So I’m going to teach you how to find good traders to copy.
Am I great or am I great.
Check the risk level
Etoro shows the risk level of every trader that has their profile public. It goes from a 1 – 10, 1 being the lowest risk score and 10 being the highest. Or to make things easier, traders that you can copy will show their risk levels on their profile picture. Anything that’s green is low risk, yellow or orange is medium and red is downright gambling your money or doing very very fast trades.
You’ll want to choose something that fits your overall trading attitude. I’m in it for the long haul so I go for low to medium risk traders, green or yellow. I want steady growth instead of a sudden windfall, but you can decide what is the right amount of risk for yourself.
How long have they been active?
Some traders hit the spotlight on Etoro and get feathered, which results in a swarm of traders copying them for no real logical reason other than Etoro feathered them. And some of these traders under the spotlight are new.
Brand. Spanking. New.
Never copy a trader who has been on Etoro for less than 12 months. This is my personal rule I follow, because 1 year is enough to see the cyclical changes in the market and how that trader deals with them. Also you get a good feel on whether that trader is consistent or rather rocky. The risk score can indicate it, but their trading history will give you a better idea of their risk level.
Check their track history
Carrying on from the last point, you also want to take note of their weekly drawdowns. I tend to ignore the daily because I don’t do short term investments. Weekly is arguably also too short, but it’ll do the job. The drawdown is the average percent the trader has “down” on a week. The higher the drawdown, the riskier the trader is or the more unstable they are.
I don’t go for anything above 10%, because I play it pretty darn safe and it’s been working for me.
What’s their portfolio made up of?
Etoro allows traders to buy stocks, currencies, indices and commodities. You can see the trader’s portfolio and their spread to check out what they tend to buy and trade.
Why is this important?
Well some products are riskier than others and some are more suited for short term holding while others are for long term holding. You can also see how diversified their portfolio is or if they are rather focused. There’s no right or wrong here, just whichever works for you and feels comfortable. I usually avoid currencies and commodities because I don’t know much about them, but I have been copying people that dabble in Crypto because of the recent crazy frenzy surrounding it.
I also like to mix up the traders I copy and have a nice range of different trading styles. Some only ever trade the few stocks while others have a bit of everything in their portfolio. Other’s are very industry focused with stocks in technology, food etc.
Side note: One of the big reasons for Etoro’s recent popularity is it’s ability to trade cryptocurrencies so easily. Way more easier than the traditional crypto exchanges.
Do they post often?
It wouldn’t be social if they’re wasn’t some form of communication available. And Etoro has just that. Traders can write posts and their followers will be notified when they do. You can respond and reply. Most of the time traders communicate their opinions of current market happenings or their immediate future trading plans, while most responses are questions.
You want a trader who knows what they are doing, and the easiest ways for you to know that is if the trader posts often. Ok, not just by how often they post, but it gives you the opportunity to read what they say and figure out if they know what they are doing. Are they answering questions? Are they responsive? Does what they say make any sense?
Do they have sustainable performance?
Sometimes, actually rather often times you will see traders with outrageous returns. We’re talking about 100+% returns, which make my currently 58% look stupid. When it’s not.
Don’t be tempted to copy these people just based on these high numbers. Don’t be greedy and don’t be impatient. Those numbers are not sustainable and if you’ve learnt anything from this post, you’ll probably find they wouldn’t even meet the filtering criteria of the above points anyway.
Look for someone that is sustainable. Unless, of course you plan to be glued to your Etoro dashboard 24/7 and close your copy the split second you make a dime. If that’s what you’re planning to do, then you can ignore everything you just read.
Side note: All openings and closings are not instant on Etoro and are based on the opening and closing price of the current of following day respectively. So any time of quick turn around, penny stock strategy idea you have shouldn’t work AT ALL on Etoro.
Happy trading guys! Don’t forget to use my Etoro link to sign up and you’ll get $20 for FREE with your first deposit. Who doesn’t like free cash?!
Did you enjoy this post? If you did, please take a moment to use the social media buttons at the bottom to share this with friends, family, colleagues, anyone with access to the internet… Thanks!