Copytrading eToro: how it works [Guide]
What is Copytrading and how you can do it easily and effectively
Published: 25 June 2021 by Andrew
Have you ever wondered what CopyTrading is and how it works? What if making profits without having any trading experience is really possible?
Well, you are in the right place. We certainly cannot guarantee you certain earnings, but automatically copying the operations of the most successful professional traders, as you are allowed to do with a leading trading platform in the world, eToro (here the official website) could really open the doors to unexpected satisfactions.
So if you have:
- Always wanted to start investing but never knew where to start;
- Wanted to trade stocks or other financial instruments but are afraid that learning is too difficult;
- Already an investment portfolio and are looking for something new;
… you are in the right place!
In this Guide we will try to understand why more and more investors are approaching Copytrading. And why more and more traders have understood how to use copytrading correctly in order to obtain very interesting returns. All without a thorough understanding of stocks, Forex or other financial markets.
We therefore invite you to read the following article in order to learn more about copytrading. We also recommend that you immediately open a free trading account with eToro (official website) here: it will be useful when you start applying the tips you will find shared below.
Enjoy the reading!
What is Copytrading?
Let’s start from the basics. What is it?
After all, copytrading is a very simple concept to metabolize. Whenever a professional trader opens an operation on his trading account, your account will automatically and fully replicate that operation.
Let’s take an example. Let’s assume there is a professional trader you want to follow. This trader spends his days analyzing the markets to see which assets might move favorably in the future.
Assuming he has bullish sights, he could buy the asset (for example, FCA shares) at a low price, and then sell them at a higher price in the future. This is how the professional trader makes a profit.
Well, with copytrading, every time a professional trader carries out a trade, a similar trade will also be opened on your account.
The amazing thing of all this is that the above mechanism works automatically. Thanks to the advent of copytrading platforms such as eToro (official website), it is not necessary to manually copy operations. Simply indicate to the broker your intention to “copy” a particular investor, and eToro will do the rest, replicating his trades on your account. And so, every time that trader makes a profit, even your account will smile at this evolution.
Read also: What is online trading.
How to Start
Having clarified what is it, let’s go into more detail and understand how to start copytrading.
The path where to start as a copytrader can only be the largest social trading network in the world, eToro (official site). But why?
It’s simple: eToro has the best social and copytrading platform ever designed in the world. This is, a bit, what you would get by mixing a traditional broker with a social network. The result is a platform where all trades can be viewed. But the most important thing is that it will automatically allow you to copy trades made by any investor on the network.
While there are other copytrading platforms as well, none have the quality features that eToro can guarantee you.
How to do Copytrading with eToro?
If at this point you want to know even more, before reading further we advise you to get your hands dirty immediately by opening a FREE account with eToro here.
When you sign up using this link you will receive 100,000 euros of virtual money that you can use immediately to be able to copytrading and, therefore, immediately put into practice the tips you find in this guide.
So, proceed to open an account with eToro and then come back here to continue reading!
Read also: Online trading demo.
How much Copytrading costs
One of the best things about copytrading is that it takes relatively little capital to get started. In the past, investing in derivatives or other financial products took thousands of dollars to get started.
Today, however, you can start with copytrading with only 200 euros. The minimum amount for a copy of a single trader on eToro is in fact equal to this figure, practically also accessible to all small investors.
Of course, if you’re looking to copy more than the minimum number of people (let’s say, 2-5), you’ll need to multiply that minimum copy level by the number of traders copied. For example, in order to copy 5 investors you will need a minimum capital of € 1,000.
Remember that you can start and stop copying people whenever you want, so that you always have full access to your capital.
Read also: Automated trading.
Which are the Advantages?
Even if copytrading is a relatively new concept, the advantages are already well demonstrated by the preceding paragraphs and… you can well imagine the rest!
However, let’s try to summarize them:
- Learn Online Trading: The best way to learn how to invest and trade is by watching an expert. With copytrading you will see firsthand how a “guru” works. The best eToro traders, in fact, often share the reason why they have made certain operations to help you grow professionally;
- Diversify: if you copy the trade of 5 different investors on eToro, and each of these 5 people has opened 10 trades, you will have a portfolio with over 50 positions! In fact, copytrading helps you diversify your investments. All you have to do is make sure you have copied the best investors, and the broker will take care of the rest;
- Simplify Trading: copytrading is a simple way of investing. If in fact the manual opening and closing of positions requires a lot of experience in investing, and if it takes years of learning to be able to consistently profit from trading, in reality copytrading will allow you to draw on this knowledge without the need for have in-depth knowledge of investments.
Read also: How to make money on the stock market.
How to Make Money with Copytrading
So how can you make money with copytrading?
Remember that the mechanism behind copytrading is extremely simple. When the trader makes a trade, the same trade is also copied to your account. If the trader makes money, you will make it too. Conversely, you will lose money.
So, the secret to being able to make money with copytrading is, after all, finding the right traders to copy. But how to do it?
How to find Traders to Copy
Fortunately for you, eToro (official website) includes many investment tools in its platform that allow you to filter traders to immediately find those that meet your goals.
But if you need a guide to get started, here are some search parameters that you might choose to use the first time you approach copytrading:
- Annual Return: you can look for traders who have returns between 10% and 30% in the last few years. Remember that all investors have difficult months and, therefore, there is no need to worry if someone has lower returns for some periods. On the other hand, what you should worry about is experiencing 12-month returns of 80%, 100%, 200% or higher. These dangerously high numbers are usually the result of an inexperienced investor using too much leverage, and simply getting lucky. Rest assured that those traders who have these returns will not be able to replicate them in the long term; at least 1 year of trading experience: do not copy traders who do not have a demonstrable trading experience of at least 1 year on eToro. In this case you will never know if their ability to obtain returns is proven over the long term;
- Active Traders: look for traders who make at least 1 trade per week. Active traders are more likely to work hard to grow your portfolio and make it more dynamic than to lock your money in one or two trades for a long time;
- Risk: every trader you copy should have a rather low risk score. Remember that lower risk scores mean dealing with a trader who uses more informed trading practices.
Here we are at the final part of our in-depth analysis on copytrading, dedicated to some opinions on this topic.
In our judgment, in a world that has become more connected than ever, it is no surprise that traders want to share ideas and information. Copytrading, in this sense, is essentially the behavior of a trader who copies the operations of another and … it is certainly not a new idea. However, it is an idea that took a few years to perfect and brought into full availability to the trading community. The credit is mainly due to eToro (here the official website), a real point of reference for this sector.
We also believe that copytrading is perfect for inexperienced traders. So if you are new to the world of online trading, then chances are you need to take things seriously as you learn to trade correctly. While there is nothing wrong with that, imagine that you can generate profits immediately and effortlessly. By copying the trades of others, you will essentially have an experienced trader at your disposal, who will hold your hand and guide you through each trade.
Again, we believe copying trades will save you a lot of time. In fact, you can do without the phases that require more time, those of analysis. Technical and fundamental analysis can absorb most of your time when you decide to trade in first person with precision and frequency.
Additionally, with copytrading you are likely to earn more. Let’s face it clearly: even if you can trade on the financial markets just for fun, the main reason for your online trading activity will be to generate profits. Copytrading can allow you to make more trades and close more profitable positions. It can be done alone or in addition to your regular standalone trading activity. In both cases, it is likely that you will make more money from the financial market if you embrace the copytrading approach.
Also remember that even experienced traders can benefit from copytrading. In short, the fact that you have been trading for years, even with good results, should not necessarily take you away from copytrading. We have already mentioned why! With copytrading you can save time and you can make more money. Not only. You will also learn a new strategy or two by looking at trading from someone else’s perspective who is probably even more experienced than you. So, although you may have been trading for years, don’t forget that there is always something new to learn.
Read also: Play the stock market.
So, is Copytrading for everyone?
The answer is yes. Both novice and experienced traders can benefit from putting the knowledge and skills of others to work for them.
The important thing is, if anything, to do it with the right copytrading platform. As we have reported in the previous paragraphs, the market leader is certainly eToro (here the official website), which will allow you to open a free account, even in demo mode, to be able to safely experience what it means to trade by copying the best investors of your community.
We therefore suggest that you immediately open an eToro account with 100,000 virtual euros to use for your demo copytrading, and understand how it works.
We have always talked about eToro because it is the only truly reliable copytrading platform. The other Copytrading platforms are outright Trading Scams.
We then invite you to talk about it with all our readers. The comment space is in fact at your disposal for:
- Ask us questions about copytrading and eToro, which will be answered by our editorial staff;
- Share your copytrading and eToro experiences with the whole community.
It will certainly be the right opportunity to improve your knowledge of these topics and get new insights that you can immediately use in your online financial adventures.
Good trading, and good Copy Trading with OnlineTradingCourse.net!
Yes, it represents an excellent profit opportunity, starting from a low investment (€ 200).
By opening an account on eToro (also Demo), accessing the Top Trader section and selecting the best performing ones to add to our portfolio.
It depends on the capital you invest and the traders you choose to copy. In any case, many Popular Investors have achieved performances of more than 50% per annum.
Yes, with a virtual capital of $ 50.00 it will be possible to create a virtual investment portfolio.