Thanks to the modern technology of the 21st century, with social trading you can copy super successful retail traders.
Not so long ago finding a freelance currency trader making 20% – 30% of profits a month for themselves and their clients was almost impossible. Of course, everyone wanted to find these people, but traders were mostly anonymous and secretive, and their numbers were hard to prove. This all changed in 2007. Today you can browse through the selection of best eToro traders like you might look for people to follow on Twitter or to friend on Facebook. Pick whoever looks like they are performing the best.
Etoro Social Trading Network is arguably the most popular platform with over 3 million users and extremely easy-to-use platform. It also has message boards where you can communicate with the traders who you might follow and get a feel for how they think and their techniques.
1. Choose Traders With Reliable Results
Many traders make large gains one week and blow up their accounts the next, so you are looking for consistent profits with minimal periods of loss rather than a one month wonder who made 400% taking crazy risks. Also beware, if traders have large positions left open for a long time, they may be “padding” their stats to gain followers. Always check a trader’s trading history for any anomalies.
2. Don’t Risk All Your Money On One Trader
As good as a track record might look, no trader is infallible. Even the best traders might be wrong 50% of the time but their big winners cover all their losses. Start of with no more than 20% investment sizes, let them prove themselves until you are comfortable putting in a bigger percentage of your account balance.
3. Copy The Techniques Professionals Use
Watch how the traders with more than 1000 followers trade and use the tactics for yourself. In addition, ask each trader what their recommended stop-loss percentage is to secure your money. Once you’ve discovered all social trading benefits and mastered it by yourself, others will want to follow your trades as well. In fact, eToro will give you impressive bonuses when you reach a certain follower count.
What is an advisable limit for allocating your cash to a single social trader?
What is a key risk to watch out for when looking for good social traders?
What is the minimum amount of time a trader should be active before you choose to replicate their trades on a social trading platform?
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eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results.
Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework.