eToro’s copy trading feature allows newbie and experienced traders to replicate other investor’s trades. This service is becoming very popular, especially among users who may not have the time or experience to analyze charts themselves. This article discusses how to pick and copy traders on eToro and the broker’s copy trading fees. We also shed light on what users of this feature have to say on popular forums such as Reddit and Quora.
Summary
eToro is a multi-asset investment broker founded in 2007. Its headquarters is located in Tel-Aviv, and it is regulated by the Financial Conduct Authority (FCA), the Australia Securities and Investment Commission (ASIC), the Cyprus Securities and Exchange Commission (CySEC), the Malta Financial Services Authority (MFSA), and the Financial Services Authority of Seychelles.
eToro offers a copy trading service to users on its platform. With this feature, clients can copy any listed strategy providers and invest in a wide range of assets. The broker also lists suggested traders to copy across various categories. Here, we let you know how to pick and copy traders on eToro. We outline the step-by-step process for making your first copy trade and explain any added fees you should expect while using the broker’s copy trading feature.
eToro Discover People Tool
The Discover People tool allows customers to find traders to copy on the platform. Several strategy providers are listed on the eToro copytrader, and identifying the right individuals to duplicate their trades can be challenging.
With this tool, traders can filter investors based on predetermined criteria and select who they wish to copy. The filter feature is perfect for clients who are still learning how to pick and copy traders on eToro. It lets users streamline potential choices based on performance metrics such as return, risk score, and number of assets under management (AUM). Furthermore, it also offers advanced search criteria, including number of profitable trades, average position size, daily or weekly drawdown, and country.
Copiers who do not want to use the filter option can also select based on eToro’s sorting. The broker ranks copy traders in categories such as Most Copied, Trending, Market Outperformers, Most Consistent Investors, and Lower Risk Investors.
Things to Look Out for Before Picking a Trader to Copy on eToro
Although knowing how to copy traders on eToro is important, you must also know the metrics to look out for when making a final decision on a strategy provider. Copy trading on eToro can be profitable. However, there is also the risk of loss of funds, especially when you choose an investor with a poor performance track record. Here, we cover some factors to consider before selecting a trader to copy.
Risk Management
Before copying traders on eToro, you must evaluate how much they pay attention to risk management. Some traders have a high-risk appetite, while others are more conservative. Depending on your preference, you can select the risk management strategy that best suits you. eToro copy trading uses industry-standard assessment methods to calculate the risk score of all their strategy providers. This figure is ranked on a scale of 1 to 10, where 1 represents the lowest level, and 10 represents the highest amount of risk.
Users can view the risk score of all strategy providers on the eToro platform by clicking on their profile. Once you select a trader, you will be redirected to their stats tab to see their average risk score for the past week. In addition to this, you will also have access to an interactive chart that displays the average risk score for the past 12 months.
Trading Style
Another factor to consider if you wish to learn how to pick and copy traders on eToro is each strategy provider’s trading style. There are many types of investors on the copy trading platform, and they have unique styles. Most providers have a detailed explanation of their overall trading outlook and style on their bio. You can access this information by selecting an investor and visiting the overview section. Here, you can click “Show Full Bio” in the About Tab, located at the right corner of the copy trading web app.
Number of Copiers
The total number of copiers an investor has on eToro can indicate how valued their strategy is and how much fellow traders trust them. However, it is essential to note that although having many copiers is a positive yardstick, it doesn’t guarantee you will make a profit. eToro lists the number of copiers for each investor just beside their profile on the web platform.
Copy Asset Under Management
Like the number of copiers metric, the total value of copy assets under management (AUM) can also reflect how much other investors trust a strategy provider. Copy assets under management is a figure that shows the overall value of assets a trader manages on behalf of clients. This can range from below $50,000 to over $1,000,000. To view an investor’s AUM, go to the Stats tab on their profile and look for the Copiers Card. Here, the AUM is displayed with the term “Copy Value.”
Returns/Past Performance
Returns are one of the most critical metrics to consider when evaluating performance and searching for eToro copy traders. eToro copy trading offers a detailed breakdown of each strategy provider’s return percentage. This information is regularly updated and can be broken down according to years or months. The broker also provides an interactive chart that makes it easy to visualize this performance.
In the overview section of each investor’s profile, you can access their summarized returns for the current year and the past two years. However, to see a month-by-month summary, click on the Stats tab.
Active Years (Age of Account)
Checking the number of active years can offer an outlook on an investor’s level of experience of eToro Copy Trader. Fortunately, eToro copy trading lets users see how long strategy providers have been active on the platform. This information can easily be obtained from a trader’s profile by scrolling to the bottom of the Stats tab.
Drawdowns
In addition to all the factors mentioned so far, you must also look out for each strategy provider’s drawdown statistics. eToro displays the maximum drawdown for every account. This percentage lets you know the highest amount of decline in account equity over a period. Drawdown percentages are shown next to the Copiers Card in the Stats section on the copy trading platform.
Assets Traded
There is a wide range of assets available on eToro, including stocks, ETFs, and crypto. Different copy-trading strategy providers have their preferred investment vehicles. You can check the specific instruments an investor is currently trading by visiting the portfolio tab in their profile.
Here, eToro will display all the strategy provider’s ongoing trades, profit and loss percentages, and overall value. For users wishing to see a summarized outlook of assets traded, click on the pie chart icon at the top-left corner of the portfolio tab. This will display the percentage allocation of funds on various asset classes.
Editor’s Choice
Editor’s Choice helps streamline the options for eToro copy traders by providing a list of suggested strategy providers they can copy. This list is updated frequently based on several criteria that are determined by the eToro team.
How to Pick and Copy Traders on eToro: Step-by-step
In this section, we outline the processes of picking and copying traders on eToro and provide you with a step-by-step guide to enable you to get started. eToro’s account opening process is relatively straightforward, and clients can quickly begin duplicating fellow investors’ trades as soon as their accounts are verified.
Create an Account on eToro
To open an account, you need to visit www.etoro.com and click on “Join eToro.” Afterwards, you must enter your preferred username, email address, and password. After you’ve provided this information, eToro will send a verification code to your email to confirm your registration.
Upon entering this code, your account will be opened. However, you will have a €2,000 deposit limit. Next, you will be redirected to the trading portal, where you’ll complete the rest of the registration process. Go to settings and click on your username to proceed with the sign-up. eToro will demand that you provide your personal information, trading experience, proof of identity, proof of address, and tax ID. The broker will also attempt to verify your phone number. As soon as you supply all these details, your account will be verified, and the €2,000 deposit limit will be lifted.
Fund Your Account
Now that you have created your account and removed all deposit limits, you can fund your account with any amount and begin copy trading. Expand the side tab to reveal the “Deposit Funds” button and select it. Then, enter the amount you wish to deposit into your account and select any of the available payment methods listed. eToro allows users to add money to their trading accounts via Credit/Debit cards, Neteller, Skrill, and Bank transfers.
Select the Investor of Your Choice on the eToro Discover People Tool
You can begin copy trading on eToro by using the Discover People tool. With this feature, the broker’s clients can easily find traders to copy and view the top-performing traders in different categories. To use Discover People, click on the compass icon on the sidebar of the eToro web trading app. Then, select CopyTrader and use the search tab to find an investor to copy or pick any of the investors listed in eToro’s predefined categories.
Click ‘Copy’
After identifying the investor you wish to copy, click on their profile and select “Copy.”
Enter the Amount you wish to Invest with the Selected Investor
Once you’ve clicked the copy button, eToro will ask you to indicate how much you wish to invest in copying that exact strategy provider. Indicate your preferred amount.
Review and Select the Copy Stop Loss of your Choice
After you’ve specified how much you wish to invest, you can set a percentage of your investment value below which the trade(s) will be automatically shut down.
Click on ‘Invest’
If you’ve reviewed your investment amount and set an acceptable stop loss, proceed to the final step by clicking “Invest.”
Monitor your Trading Positions with the Investor
Now that you’ve completed all the required steps, all you need to do is monitor your position.
eToro Copy Stop Loss
Copy Stop Loss is a feature that lets copy traders on eToro mitigate losses while duplicating another investor’s trades. This feature allows clients of this broker to specify a limit on their copied trades. This means they can indicate a percentage loss or amount below which their open positions will automatically be closed. eToro allows users to modify their Copy Stop Loss even after it has been set.
eToro Copy Trading Fees
Unlike many other copy trading brokers, eToro does not charge additional fees to clients using its copy trading service. The broker earns primarily from the spreads on its listed assets and pays its strategy providers directly as part of its Popular Investors Program.
What Reddit and Quora Users Say About Copying Traders on eToro
As part of our guide on how to pick and copy traders on eToro, we will also let you know what others who have used the broker’s copy trading service have to say about it. In this section, we provide you with a detailed summary of what people are saying about copy trading with eToro on Reddit and Quora.
Generally, most comments about eToro’s copy trading services reflect cautious optimism. We couldn’t find any complaints about eToro’s web app for copy trading or its customer service. However, most comments by Redditors focused on the merits and demerits of copying other traders. While most users do not seem to have any complaints about the platform itself, they are quick to point out that copy trading is risky and requires intensive research to identify the right investor to duplicate their trades.
Quora
Like with Reddit, there aren’t many comments about the eToro copy trading service on both web or mobile platforms. Similarly, although users admit this feature is profitable, they also highly emphasize proper vetting and due diligence in selecting a trader to copy from.
Bottom Line
This article reveals the blueprint for how to pick and copy traders on eToro. eToro is one of the most popular brokers that offers a copy trading service via its web and mobile applications. The account opening process is very straightforward, and new users can quickly get started with eToro’s Discover People tool. Furthermore, the broker also provides elaborate filter criteria to enable clients to identify the best traders to copy.