eToro Copy-trading platform review: Master social investing

2023-12-16

In the fast-evolving landscape of online investments, finding a platform that aligns with both the seasoned investor's discerning needs and the novice's quest for simplicity is a quest worth undertaking. As a devoted eToro user for 4 years, my journey has been marked by exploration, experimentation, and a keen interest in the transformative power of copy trading. In this comprehensive review, I invite you to join me in unraveling the layers of eToro's platform, as we delve into its core functionalities, the revolutionary concept of copy trading, and the overall user experience. Whether you're a financial enthusiast seeking a user-friendly interface or an astute investor aiming to diversify your portfolio through innovative means, this exploration aims to provide insights that empower your investment journey. So, let's embark together on an in-depth analysis of eToro, a platform that not only caught my attention but also significantly influenced my approach to online investing.

Imagine eToro as your financial compass, guiding you through the exciting world of investments with clarity and confidence. This intuitive platform empowers you to explore diverse assets like stocks, ETFs, and cryptocurrencies, all within a secure and transparent environment. But eToro goes beyond just buying and selling – it`s a thriving community where learning, collaboration, and shared success take center stage.

What is Copy Trading?

Copy trading, a transformative feature at the heart of eToro, is akin to having an experienced guide on your investment journey. In essence, it allows you to mirror the trades of successful and seasoned investors automatically. Instead of navigating the intricate world of financial markets alone, you have the opportunity to replicate the strategies of those who have demonstrated expertise and success. It`s like riding the coattails of accomplished traders, leveraging their insights and decisions to inform your own portfolio. eToro`s copy trading isn`t just about following trades; it`s about creating a collaborative and supportive community where the wins of one benefit the many. This innovative approach democratizes investing, making it accessible and potentially lucrative for investors at all levels of experience. Whether you`re new to trading or a seasoned pro, copy trading on eToro offers a unique and powerful way to participate in the financial markets.

What makes eToro Unique?

Platform Features: Say goodbye to complex charts and deciphering jargon. eToro`s user-friendly interface makes investing accessible and enjoyable for everyone, from beginners to seasoned professionals. With intuitive tools and educational resources, you`ll have the knowledge and confidence to navigate your financial journey.
Unique Selling Points: eToro is more than just a platform; it`s a community. Connect with other investors, share insights, and learn from the best. The revolutionary copy trading feature allows you to effortlessly mimic the strategies of successful traders, putting their expertise to work for you. And with competitive fees, you can rest assured that your profits are yours to keep.
Social Trading Elements: eToro`s heart lies in its collaborative spirit. The copy trading feature empowers you to learn from experienced investors and benefit from their proven strategies. It`s a win-win situation – you gain valuable knowledge and experience, while successful traders are rewarded for sharing their expertise. This collaborative approach fosters a supportive community where everyone can grow and achieve their financial goals.
Accessibility: eToro caters to everyone, regardless of your experience level. Beginner-friendly resources and educational tools help you get started on the right foot, while advanced features cater to seasoned investors seeking sophisticated options. This inclusivity makes eToro a versatile platform that adapts to your needs and grows with you on your financial journey.

Whether you`re a seasoned investor seeking new opportunities or a curious beginner taking your first steps into the world of finance, eToro has something to offer everyone. With its user-friendly platform, vibrant community, and innovative features, eToro is your one-stop shop for a rewarding and enriching investment experience.

eToro story

The eToro brokerage company was registered back in 2007, and from that moment it has been constantly developing. Currently, the number of active traders and investors has exceeded 10 million people from all over the world, and this number is growing from year to year. The main reason for the success of the company is their unique platform combining a social network and a trading terminal, which allows successful investors to copy transactions. But lets talk about everything in order. To get started, lets go through the key points in the development of the company:

2007: Foundation of eToro - democratizing finance and making trading accessible
2008: Market Expansion - access to new markets and instruments
2009: WebTrader - online trading platform for wider accessibility
2010: OpenBook Beta - initial social trading features and community building
2011: OpenBook (Full Launch) - revolutionizing trading with social networking and copy trading
2012: Stock Market Access - diversifying portfolio options with stocks
2013: Advanced Charting Tools - providing in-depth technical analysis capabilities
2014: Improved Copy Trading Features - optimizing functionalities for convenience and risk management
2015: Website Design Update - enhancing user interface and accessibility
2016: CopyPortfolios - thematic investment portfolios for simplified diversification
2017: AI-powered CopyPortfolios - utilizing Microsoft AI for potentially improved returns
2018: Cryptocurrency Market Access - expanding options to include popular cryptocurrencies
2019: eToro Wallet and Fiat Pairs - secure storage and simplified buying/selling of crypto
2020: 185 New Shares Added - broadening stock market portfolio options
2021: Fractional Shares - democratizing access to high-priced stocks
2022: Theme-based Smart Portfolios - catering to specific investment interests and values
2023: Copy Multiple Strategies - simultaneous diversification across traders and asset classes

Registration

Deposit

As soon as the account has passed verification (if all the documents are in order, it takes a day or two), replenishment of the account becomes available. To do this, click on the corresponding button in the lower left corner

Enter the card details and click send, as a rule, money is credited instantly

The following payment systems are available for replenishment:

Credit card
Bank Transfer
Paypal
Skrill
NETELLER

Investing in eToro

I arranged available eToro investment options by decreasing risk (investing in indices is the least risky)). Briefly about each of the items):

Indices: Indices represent a set of stocks, usually of a country
ETFs (Exchange traded funds): Exchange-traded funds are collections of stocks for specific industries or regions
CopyPortfodtos: CopyPortfolios is an eToro product resembling stock funds, only stocks in CopyPortfolios are selected by experts from eToro
Stocks: Shares are part of a company
Commodities: Commodity markets are investments in oil, gold, sugar, etc.
Forex: The word Forex is strongly associated with foreign exchange markets, as they trade on fluctuations in the exchange rate of one currency to another, for example, the euro against the dollar
Traders: Well, the ability to copy trades of successful traders is the main feature of eToro

It is better to start investing with the least risky assets, such as the SP500 index or blue chips (shares of multibillion-dollar corporations such as Apple, Microsoft, Google)

Select instrument — In order to buy shares of Apple or any other company, enter the name in the search bar at the top of the screen and click Trade

Deal parameters — In the window that opens, we can change the following transaction parameters:
Price - it can be either according to the market, or you can specify your own, for example, buy Apple shares when the price drops to $305. I do not recommend setting the price well below the market, as the price may not go down to it
Amount - you can indicate how much to buy shares (which is more convenient), or how much. I recommend using no more than 2% of the deposit per transaction
Leverage - controls the degree of profitability and risk of the transaction. When buying a 1st stock and 1X leverage, raising the stock price by $1 will bring you the same $1. If the price falls, you will accordingly be $1 in the red. With a 2X shoulder, everything is respectively multiplied by 2. With a 5X shoulder - similarly
Stop Loss - allows you to limit your losses, i.e. the transaction will be automatically closed at a drawdown of 50% (the default value). If, when opening a transaction without use, everything is calculated simply, then with a leverage of 2X the transaction will be closed as soon as the price drops a quarter of the price of the transaction, and with a leverage of 5X it will only be 10% down and the transaction will be closed. So I really do not recommend using 5X.
Take profit - allows you to take profits, a convenient thing, when the price, say, jumped sharply by 20%, your transaction closed after reaching the take profit price, and then the price went down and invested
After setting all the necessary parameters, click Set Order

We figured out investing in stocks, now let`s move on to the most interesting part of the eToro platform - copying deals

First, we need to select successful traders whose deals we want to copy, for this, click Traders on the right menu. On this page you see lists of traders, broken down by various parameters, such as risk, popularity, number of copiers, etc. I advise you to start with the most copied ones, as this list contains traders trusted by the community and who manage millions of dollars, i.e. they are very motivated not to lose their reputation and trade in plus

Most copied traders — Next, we will need to select traders suitable for our parameters, the main of which is stability, because how stable a trader is to make a profit in the long run. For example, consider the profile of the most traded trader at the time of writing. On the Feed page, you can read his posts, but we are more interested in statistics

General statistics — On the statistics page we can see the monthly yield in percent for the current and previous months, the risk level, drawdown, number of copyists and the approximate amount of investments of all investors copying this trader

Detailed statistics — If you scroll a little lower, we will see the total number of transactions, the percentage of profitable ones, as well as detailed statistics on what instruments the selected trader is trading and how successful his transactions are for the three most traded instruments. At the very bottom, in the Additional section, information on the average number of transactions per week, average transaction duration, date of commencement of trading and percentage of profitable weeks is indicated

In order to preserve investor funds and for better diversification, eToro limits the percentage of investments in one trader to 40% of the amount of your capital. The standard formula for diversification is breaking up the entire amount of money into 10 parts and investing them in 10 different traders. Also the standard formula is 80/20, i.e. if you are for stability, then invest 80% of the money in traders with a low level of risk and 20% with an average. If you are willing to take risks, you can try your luck and invest 80% in mid-risk traders and 20% in high-risk ones, then be prepared to lose all the money invested in high-risk ones, because over a long period of time, no one has managed to get a high stable income above the market, i.e. higher than the yield of the SP500 index. That is all for me, and successful investment!

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. 67% 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.