Copy trading has become one of the best ways to earn passive income. The growing market is attracting new people in the market. One of the ways to make money from the market is by doing copy trading. Etoro is one of the most trusted and popular platforms. This platform is perfect for both beginner and advanced investors. In this article, we are going to talk about how to copy trade on Etoro.
What is Copy Trading?
The copy trading actually started in 2005 when traders started copying specific algorithms for trading. Brokers understood the importance of having systems that can enable copy trading for traders. There is no need to monitor trading chat rooms or email signals. Etoro is one of the copy trading platforms which can help you in connecting your personal trading accounts with their platform.
Copy Trading is not easy as it comes with many risks. However, if you are doing it properly then you can change your entire life. There are several techniques that you can follow for maximizing your returns.
Create a Trading account
You need to create a trading account before you can start copy trading. However, beginners are often confused between different platforms. If you are a beginner, then you should go for a platform that has a simple user interface. This will ensure that you can easily use it. You should create a demo account on the trading site first. Make sure that the site is offering both risk and money management tools.
You need to learn a lot of things at the beginner level. Thus, make sure that the platform is offering sufficient resources to learn. All the members on the platform should be active. You should also check if there are investors available on the platform that you can copy. If you consider all these factors, then eToro is the best platform for beginners. eToro fees australia is one of the lowest trading fees in australia.
Follow good Traders
Copy trading is all about copying trades of other traders. Thus, you have to ensure that you are copying efficient traders. A common practice in copy trading is to follow traders that have good performance in the last year. However, this strategy won’t help you every time. Some of the traders can have a sudden downfall due to one bad trade. Good platforms like eToro already understand this problem. They have created an amazing filtering system for their traders. You should use these filters and do your own research also. This will help you in finding the best traders that you can follow.
You should check the realized profit of traders. This will help you in understanding the ROI that they are generating. You also need to diversify your trading strategy. Check the trader’s bio for learning about the strategies that they are using. If you are not allowed to check their strategies, then you should check what they are investing in. This will help you in understanding them better. It is always a good idea to follow traders that have been generating 10-20% returns every year.
Use Stop Losses
This should be obvious for traders. You have to always set up stop losses for every trade. Most good traders will have a stop loss. You can copy their stop losses or set your own stop losses. If you are setting it up yourself, then you should learn about support and resistance. eToro will allow you to copy the stop losses of other traders also. If you trust the trader, then you should follow their stop losses also.
Make sure that you are regularly following the trade. This can be done by downloading the eToro mobile app. You should regularly monitor all your trades.
If you are a beginner trader, then you need to learn a lot of things. You also need to do various experiments for learning new things. Thus, investing a big amount is not a good idea for you. You can learn different strategies by investing like a few hundred dollars. However, this won’t help you in changing your life. Copy trading is something that can actually change your life. You can follow the best traders. This will ensure that you will get access to the best trading strategies.