Copy-trading has been popular in recent years. It is drawing new investors looking to profit from duplicate trading. eToro is a famous and reputable platform for novice to advanced investors. The eToro copy trading review provides an overview of the forum.
Why is copy-trading so popular?
In recent years, copy-trading has become more prevalent. To trade, many traders develop ‘People-Based’ portfolios.
Here are a few reasons why copy trading is gaining popularity:
Time-Saving: Copy-trading saves time over manual trading. Traders who lack time or knowledge should opt for copy trading. Traders who lack time or expertise should opt for copy trading.
Education: Copy trading is also the best way to learn trading tactics. Also, you can ask inquiries and find out why particular trades were made.
Global Market Access: It is impossible to become an expert in all global marketplaces because traders are limited. A copy trading platform ensures the financial markets never betray you. Copy-trading exposes you to international markets and broadens your global knowledge base.
Portfolio diversification: Copy trading is one of the finest strategies to diversify a portfolio with minimal risk. This allows you to imitate transactions of other investors and generate a steady income. In today’s economic environment, even an experienced trader advocates copying.
Why is eToro best for copy-trading?
To learn the basics or not have time to follow the markets, you may now easily leverage other traders’ knowledge. With eToro’s CopyTrader, you can instantly replicate top-performing traders’ trading in your portfolio.
Imitate trading is a popular feature on eToro, where traders may copy the trades of experienced investors and earn rewards for sharing their trading ideas. eToro has approximately 3,000 tradeable symbols, including CFDs, forex, ETFs, and prominent cryptocurrencies.
How to open an account on eToro?
You can open a new trading account by following these steps:
- Go to www.eToro.com and click the “Join Now” or “Trade Now” option.
- On the following web page, you will find an electronic form to enter all of your details to open a new trading account.
- Please complete this form thoroughly. You can also use Facebook or Gmail to log in.
- After reading the terms, please indicate your acceptance by ticking the corresponding box. Submit your info by clicking “sign up.”
- The European Parliament and the Council Directive 2005/60/EC regarding the prevention of money laundering and Terrorist Financing is officially informed to all investors. For more information about the verification process and required papers, visit the eToro website.
- As part of the KYC procedure, new investors must produce proof of residence and identity, such as a valid passport or other government-issued photo ID.
- As part of the KYC procedure, prospective investors will be asked to complete a questionnaire that will help eToro design a service package for their specific needs. An investor should be asked about his or her professional background, capital market knowledge, financial liquidity, risk tolerance, investment goals, etc.
How to choose which traders to copy on eToro?
Choosing someone to imitate is a difficult task in copy trading—so many signal/strategies suppliers on one platform, so many variables to consider.
- Track record
Examine a trader’s performance over the last year. It’s best if they’ve traded for a while so you can see their performance in either direction.
The best trader to follow has consistent outcomes. Look at the historical performance graph to find out. If it’s gradually increasing, you may want to consider a new supplier. If there are irregular spikes, move on. You’d somewhat mimic a trader who makes 3% monthly gains than one who wins for six months and then loses.
Follow a signal provider who trades with real money and takes risks. As a result, they are probably less risky with their trades. This shows they are confident enough to take risks and benefit from Forex trading. Check if the negative month on their performance chart is intentional.
A trader with a large following may be suitable to mimic social media. They resemble an influencer. Why would anyone copy losing trades? You might share in the winnings. Inspect if the followers, or most of them, trade “real money.” After all, you’re risking your own money.
Copy trading is not without risk, but you don’t have to take that risk if you can’t afford it. Here you need to assess a signal provider’s risk. Is it too high?
Check to see if stop levels are established on each transaction opened and at what distance. Don’t copy a trader with no stop limits, as this equals unbounded risk.