Well, everyone out of us is aware of the shortest and quickest way to make money in the world of internet. That is forex trading. But one things needs to be clarified here that the sentence “shortest and quickest way to make money online” comes with remarkable risks and dangers of loss. Earning thousands of dollars using forex trading and losing them, both have a 50% chance of happening. A small misguided step could put you among bankrupts or a tiny but wise move can count you among the top investors within a day or two. So, forex trading is irrefutably a game of wisdom, patience and knowledge (of market trends). If you intend to step step the wolves of Wall St., you got to have guts accompanied by a brain that has hundred of eyes to monitor each and every trend and move in the forex market.
Forex trading was once a selective game played by few gurus who had a lot of money in their pockets to handle the losses( if any). But today, etoro has made this game both comprehensive and user friendly.
What is eToro?
eToro was established back in 2006 and today they are ranked among the top investment networks with 3 million traders and 130 million completed trades so far. They describe themselves unique of their kind due to the intermingling of social media with trading hence bringing up a comprehensive social trading platform. You can post a status, snapshots of your trades or chat with other traders online like you do with your friends on facebook.
The most fascinating and fun feature of eToro is “copy trading”. You can browse through the eToro community and visit other traders’ profile to check how much they have traded in profit or loss. if you find a trader consistent with his/her profits, you can reserve some of your funds to copy that trader. That mean if that trader opens a trade in future, the same trade will also be activated on your profile too. So, if that trader earns a profit on that trade, you too bring in those profits without having to panic about monitoring your trade 24/7.
Another interesting and rewarding feature offered by eToro is “Popular Investors”. This feature rewards the traders depending upon how many copiers do they have in their profile in the form of monthly commissions that can pay you up to $100,00 per month.
So, with the involvement of social and copying features, you don’t require any basic knowledge of forex trading if you are beginning in this market. But, don’t rely wholly on this cozy stuff if you really want to make huge profits in stock trading. You need to learn and learn with every trade you make. Observe the markets fluctuations and moves on daily basis and widen your knowledge for a better future in this street. I am writing a comprehensive and step wise guide on eToro in which I will elaborate each and every feature and tweak of eToro to help you learn and stand on your feet to boost your profits and minimize your losses.
1. Sign up for eToro
Signing up for eToro really takes a few seconds. You can sign up using your facebook or provide a user name and password. After email confirmation, you are welcomed to the world of trading where you have the currency pairs and indices blinking in front of you. Welcome to the Wall Street. 🙂
2. Deposit Funds
Though, eToro offers a demo account with virtual money up to $10000, but I will encourage you to deposit real funds up to $200 in your account. Minimum deposit for eToro is $50, but $200 is preferred initially because you need at least $100 to copy a trader on eToro. After you have created an account on eToro and deposited two hundred dollars initially, its time to jump into copy trading and exploit it for maximum profits.
3. Copy Trading
This geek is the simplest way to open trades and make profits with them. As I mentioned earlier, as you copy a trader, all trades executed by that trader are also activated in your account and are closed when the source’s trades are stopped. So, whatever that trader gains or loses with that trade, you also gain or lose at the same pattern and percentage. Where copy trading seems fun and fascinating, it is actually a game that needs to played with a firm mind and a comprehensive knowledge of copy trading platform. Finding reliable and profitable traders on eToro is the key to success especially when you are beginner and trying your luck initially with copy trading.
The first blunder beginners commit on eToro is being a sheep and follow the crowd. When they find out a trader in the community with thousands of copiers, they also jump into the pit dreaming of making money by following/copying this trader. But actually this is totally a false approach. Let me clarify one thing, any trader who is copied by a few beginners initially, can go viral over eToro with in a few hours. Lets have a look at a trader here..
This trader has amazingly 3882 copiers. That means he is too much profitable and expert at trading that people are copying him blindly. Wrong..!! If you shift your eyes to the trades executed by this trader, you will never invest your precious money into him. Will you? This guy went viral (don’t know how) but I am sure many people have lost their trades on him. That is the reason I always encourage eToro beginners to seek consistency instead of quick profits.
How to Find Best Traders to Copy?
When you login into your account, you will see the following tabs on your main page.
Click on the ‘People’ tab and you will be redirected to a new page where you will have the option to discover new people. The default search parameters are displayed below in the screenshot, but you can change all the options that are highlighted in blue.
After you click the ‘Search’ button, you are navigated to a list of traders that meet the criteria you entered before searching. They are ordered by descending order of copiers they have. You can also filter your search option from the menu given on the left.
6 Attributes to Seek in a Trader You Intend to Copy
- The trader has been on eToro for at least 6 months and is an active user.
- He is active through his feeds sharing trading tips and knowledge.
- How is his drawdown average. That means how much he has been into loss during a given period. If this percentage is above 10%, you need to move to next trader.
- He doesn’t have unnatural returns. A profit of 1000%, in a very short interval of time,is non realistic and clearly depicts the random hits of luck.
- He doesn’t have a 100% profit rate. Having a few trades closed in red is a normal thing and depicts discipline and experience.
- He is communicative and always ready to help new traders by sharing his knowledge and experience about trading methodologies.
Monitoring Trader’s Past Performance
Here I will walk you through assessing a trader before you intend to copy him. I will use a specific profile and guide you through attributes to look in a trader.
After you have performed a filtered search, and have clicked a trader profile, you will be redirected to that trader’s profile. It look like this,
Once you click the ‘Stats’ tab on a trader’s profile, you will see very useful information that can help you determine whether its worth to copy the trader or not.
Below you can see the stats of this trader. If you had invested $100 in this trader 1 year ago, you would have $225 in your account now. Similarly if you had started copying this trader like one month ago, you would have been down by 10%.
The other two important things to monitor include ‘Darwdowns’ and ‘Average Trade Size’. Below are the trader’s last three months stats.
The weekly drawdown depicts the maximum this traders went into loss in a single week during this time interval. The average trade size and total equity are proportional to each other. In other words, an average trade size of 0.8% means that the trader would have each trade of $8 if he has $1000 in his account. So, its not the amount that actually matters, its the percentage that demonstrates a trader’s behavior as safe or reckless.
Like in the case of this trader who has an average trade size of 0.8%, it shows the reliability of this trader. Even if any of his trades goes wrong, he won’t lose much money. So it is safe and better approach to copy a trader with less trade size.
How to Copy a Trader?
Till now, you have done the major part of this whole process. Once you have decided to copy a trader, it only takes a minute to copy and invest into a specific trader. Just open a trader’s profile who you think is reliable and disciplined and click ‘Copy’ button located just below his profile picture.
You,ll then be asked to enter an amount you want to put into this trader. Moreover, you’ll also see other useful information appearing on this tab.
The “1.5% of realized equity” simply means that you have investing 1.5% of your total money into this trader. So it is an indication to how much %age of your total money you are putting into this profile to copy. If you want to maintain a sensible and diversified portfolio of your investments, I highly recommend you not to invest more than 25% of your total amount in a single trader.
The “Projected Average Trade Size” indicates the real dollar processing of this copying. From the above example, each trade copied by you from this trader will be $1.87 on average. This demonstrates a safe and reliable trading style and its encouraging to copy this trader.
How to Monitor Your Performance?
Once you click on “Trading” tab on your profile, you are redirected to a whole new world that is called Webtrader. This is where you actually invest in stocks and monitor the progress of your trades and initiate or close them.
Moreover, all of your copied trades will also been available here. You can see the returns of a copied trade and customize it accordingly.
How to Invest and Choose Stocks Wisely?
Well, that’s up to you partner. I cannot offer specific investment advice. All I will say is that it pays dividends to do your homework, read the news frequently and listen to earning announcements. Only invest in stocks or companies that you believe are in a strong and healthy position to resist market shocks, and ultimately have room to grow.
If you want to make unlimited profits from your trades and turn it into a consistent practice, you need to visit Slick Trade where you will find a step by step and comprehensive guide on this aspect.