eToro CopyTrader – What You Need to Know Before Copying Trades on This Platform

Over the years, most studies have revealed that only 10% of traders generate profits from the financial markets. That means a huge percentage of traders are liquidity providers. To benefit from the experience of successful traders, some brokers have introduced a concept called copy trading.

Copy trading allows traders, especially newbies, to follow the trades of those with sufficient trading experience.

One of the brokers offering this feature is eToro. Let’s find out how it works and how you can get started.

Understanding eToro

Based in Tel Aviv, Israel, eToro is one of the leading brokerage firms offering users access to a wide range of financial instruments, including forex, CFDs, cryptocurrencies, and ETFs. The company is popular for introducing social investing. This concept helps users share investment and trading ideas.

eToro’s mobile app comes with powerful chart tools to allow traders to conduct a proper technical analysis. The broker also gives access to a variety of educational materials to help users sharpen their trading skills.

As you continue sharpening your skills, you can use eToro’s copy trading feature to make profits. Let’s take a look at it.

How the eToro Copy Trading Feature Works

The experienced traders who let others copy their trades on eToro are referred to as “copied traders.” When you visit their profiles, you will see their performance history and ratings. You can use this information to compare them to find the one that aligns with your goals.

Follow these simple steps to start copying trades on eToro:

Step 1: Create a trading account and verify it.

Step 2: Go to the “CopyTrader” section and select the trader you wish to follow their trades.

Step 3: Click “Copy” and enter the amount you are willing to risk.

Step 4: Decide whether you want to copy the trader’s entire portfolio or just the new trades they open.

Although eToro has automated the copy trading feature, you can always close positions manually.

How Do You Choose the Trader to Copy?

Determining the trader to copy on eToro is a crucial step.

As mentioned earlier, the traders’ profiles have vital information that you can use to evaluate them. Here is how to find your ideal trader:

• Choose a trader with an “Elite” or “Elite Pro” rating – eToro gives copied traders four types of ratings, including Elite Pro, Elite, Champion, and Cadet. It is advisable to pick traders with the first two ratings as they are considered more experienced and successful.
• Evaluate trader’s performance history – consistency is the name of the game when it comes to trading. Therefore, it is important to check how a trader has performed over the last two or more years before choosing them.
• Review the risk rating of the trader – eToro’s risk rating scale ranges from 1 – 7. Traders with higher risk ratings are big risk-takers. So, if you wish to safeguard your funds, you may want to avoid such traders.

What are the Requirements for Copying Trades on eToro?

Here are the requirements you need to fulfill to copy trades:

• Invest a minimum of $200.
• Do not copy 100 or more traders simultaneously.
• Don’t invest over $2,000,000 in a single trader.
• The minimum investment amount per trade should be $1 or more.

All said, copy trading is as risky as day trading. So do not invest an amount that will hurt you financially when lost.