8 tips on how to choose the best trader for copy-trading

The profile should also give you a good idea about the kind of trading strategy, style and investment horizon a trader pursues to see if it matches your own goals. Other traders may want to exploit short-term price volatilities instead and prefer day trading with relatively high risk to achieve quick results. The choice then depends on whether you want to take a bigger risk for a chance to make a fast return or invest for a long-term period with gradual increase in gains. Remember that riskier position entail higher risks of making a loss as well as a profit. Generally, the higher the level, the more the guarantee that the trader is not a novice.

It also allows users to adjust settings and stop copying trades manually. In addition, OctaFX recommends that members diversify their portfolio, which is done by investing in different Master Traders. Moreover, the website has a support service that is responsive to questions. If you’re looking to start copy trading, you’re going to have to set up a live account with your broker. Deposit some funds into your live account, and then link it to your copy trading account.

You’ll find the copyable traders on the Discover page of your eToro app or on the desktop site. Browse the widget there, or click Explore to view the main CopyTrader page. Copy trading is a portfolio management service, provided by eToro Ltd., which is authorized and regulated by the Cyprus Securities and Exchange Commission. A complete overview of copiers you might consider is the copiers graph under the “Stats” section. A stable increase in the number of copiers without many unexpected drops is a pretty good sign of consistent performance. Sudden ups and downs may be a sign of irregular trading results.

Copy Trading on eToro

You’ll probably find that some months are better than others. With copy trading, you’re relying on the experience and knowledge of an established trader. As long as you choose your platform and trader carefully, copy trading can be a safe and profitable way to invest your money. Now you might be wondering how you are supposed to know if those traders are trustworthy.

It is supposed to adapt the stock market to the technology of the 21st century. EToro has its own app that you can download from the App Store or Google Play Store. This way you can copy trade whenever, wherever you want.

Setting criteria for the lead trader

Rather than focusing on their number of followers, you should also focus on the amount of money they have invested in their accounts. An indicator of this type of performance is their AUM . In addition to experience, there is still a fairly long list of essential criteria that must be met by the trader who is to be followed and whose strategies are to be copied. First, the return on investment must be stable over a long period of time. Those are just some suggestions, because the one who have to weight them is you.

• OctaFX uses segregated accounts and protects personal data and online financial transactions with SSL technology.
• Such a trader’s overall performance is not dependent on a single deal, and the risk is therefore spread out.
• The idea is to copy trades that a certain trader executes so that their win becomes your win too and their loss becomes your loss.
• The forex market alone moves Six Trillion US Dollars a day – equivalent to the nominal GDP of African and South American countries combined.
• Some copy traders have used questionable tactics to boost their rankings.

Anyone can start with a small amount of money, take some risks, get lucky, and make money a few months in a row. As time goes by, however, it gets more difficult to maintain such results. That’s where the pros separate themselves from ordinary gamblers. A trader with a minimum social trading history of one year is safer to follow. For instance, the above list shows traders who have been classified as more conservative. In case of conservative strategies, the lead traders always put low risk and are usually looking at a longer time horizon.

How to choose who to copy on eToro?

Whether you are looking for stocks or ETF’s, there are many ways in which you can invest your money. A good social trading platform should have a wide selection of investment products that you can invest in. Technically, copy trading is nothing more than a certain form of investment.

If you find some irregular spikes, then you might want to consider someone else. OctaFX is one of the most famous brokers in the worldand has won many awards for its Copy Trading very comfortable trading atmosphere and proximity with customers. In this case the CopyFX Trader is compensated by taking 20% of the profits they make you each week.

VI. Manage the followers

Returns – You’ll also need to find out how your returns are paid. Some platforms pay monthly whilst others allow auto-compounding or reinvestment. In order to do so, you have to set an amount that you want to invest. The “copy people” tab takes you to eToro’s trader page, which lists all traders.

You need to find the sweet spot between drawdown and profit potential. As is the case with most Forex brokers, where you reside in the world determines where you can open a broker account. This means there are some restricted countries and not everyone is eligible to open an account at RoboForex. Choosing CopyF Traders to copy is more of an art form compared to having some mathematical formula to follow.

You should also check if the negative month in their performance chart is strategic and not a mistake. Basically, you’d want to copy a trader who delivers 3% gains each month for an entire year than someone who wins for the first six months and loses in the next six. Pay off the lowest-balance debt first and then throw that payment at the next lowest, and so on. Some people advise paying the highest-interest debt first. Both ways work – it just depends on your personal financial preference.

Finding the right trader to copy is one of the most important things in copy trading. We do our best to help you with finding the right trader for copying for you. We are providing in-depth trading statistics 📈 and ranking 🏆 for all traders that can be autocopied and you can see the stats transparently. More than anything, check out if stop levels are set on each trade opened and at which distance to determine risk levels.

How does eToro work?

Social trading platforms do not have stores that you can go to; they are online enterprises. As such, it is inevitable that they are licensed and regulated to provide security. If you are new to copy trading or social trading in general, it is better to start with small amounts to minimise the risk of losing money.

Forex Signals Blast Off

The trading products offered by the companies listed on this website carry a high level of risk and can result in the loss of all your funds. EToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs. EToro CopyPortfolio – eToro’s CopyPortfolios are long-term investment strategies built using eToro’s social features and vast array of financial instruments.

Ideally, you want to go with traders who have at least traded actively in the past five weeks. Moreover, if you wish to perform trades daily, you must consider your signal provider’s daily drawdown. The same applies if, say, you want to trade or make withdrawals weekly or monthly. That’s why I put together a list of my top three rated services, to help you to avoid the scams and get started with copy trading. I’ve made all of the mistakes so that you don’t have to. It can be hard to know where to start when it comes to finding the right copy trading platform.

Even so, Copiers still have full control over their funds and they can stop the subscription whenever they like. As you’ve seen from my top five list, traders have different ways of analysing the markets and constructing their portfolios. As a result, you’ll want to check that individual traders’ strategies suit what it is that you want for your money. Bear in mind that choosing to do this will see you invested at the current market rate, not at the rate the trader you’re copying initially invested at. Be sure to compare their strategies alongside the history of trades. If two people you are following are employing the same strategy, your risks are not well spread.

Personal statistics about the lead trader are provided by BingX for the copiers. Win ratio or P&L ratio are also some of the filtering settings that the aspiring copiers could play with to find the lead trader that would suit their needs. Traders do not need to worry about the safety of funds at this broker. OctaFX uses segregated accounts and protects personal data and online financial transactions with SSL technology. This is adjusted to the international accounting standards and regulations. In this case, the CopyFX Trader is focused on only two markets… Gold and EURUSD.

Follow Us

Make sure the traders you follow use different trading strategies. One of the biggest challenges of copy trading is choosing who to copy. The mechanism behind copying trades, however, is not as straightforward. Trades are made in a percentage-based manner because you only connect a part of your portfolio to a single trader, not all of it. Most investors give money to small businesses they believe in with the expectation that their money will increase. However, you should also double-check how much input the person wants into your business.

This broker holds a trading contest every week on a demo account with real prize funds that can be used for trading. Another advantage offered by OctaFX is the Trade & Win program. Opening an account in OctaFX would open the opportunity https://xcritical.com/ to collect trading lots, which can be accumulated into a variety of attractive prizes. Traders only need to open a real account on MetaTrader4 or MetaTrader5 through OctaFX and simply exchange the prize lot in this promotion.