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eToro Copy Trading Feature Review

Are the copy trading features of online exchanges reliable? Should you even copy an expert investor for your trading? Read ahead as we answer questions like these in our latest article.
eToro copytrading feature
eToro copytrading feature

Many trading platforms are extremely competitive when it comes to offering trading features and tools. These ultimately help traders invest with strategies that minimize the risks and increase the scope of profits.

With various features being compared and reviewed by experts, it has become difficult to choose the most suitable one. This article however focuses on one feature by a leading platform that has already been tried and tested by many investors, thereby regarding it as a useful trading tool.

eToro’s Copy Trading Feature helps you ‘copy’ other traders who have the experience that you don’t. The fundamental notion behind this tool is that as a trader, you can trade by cutting on the elaborate processes of research, analyses, price predictions, and the likes by simply copying a trader who holds expertise and experience in the trading market.

Mirroring the portfolio and moves of an investor is what the Copy Trading tool allows you to do, thereby making your engagement passive and as per the trends of the trader who you choose. When the trader earns profit, you earn profit as well. And if the trader incurs any loss, it is reflected in your trades as per the proportion of your investment.

Read ahead as we discuss review the CopyTrading feature in depth.

What does eToro’s Copy Trading Feature Offer?

eToro is a highly secure platform, regulated by the FCA (UK), CySEC (Cyprus), and ASIC (Australia). It is covered by the FSCS in the UK and registered with FINRA in the US. It is considered among the best platforms for Copy Trading by investors, making the entire experience of copy trading user-friendly and secure.

With over 20 million clients on the platform, Copy Trading is a unique feature of this platform used by a significant number of investors.

The best part is that using this feature in eToro is not a difficult job. Upon registering with the platform, you come across innumerable numbers of verified traders who have subscribed to the copy trading tool. By using appropriate filters like assets, annual gains, trade duration, etc, you can select the trader you wish to copy.

eToro also allows you to track the trader’s trading performance history on the platform. You can thoroughly analyze the trends of the trader across a timeline. Whether you want to look at the gains or the losses, whether it is the time frame during which the trader has held his trade or it is the drawdown pattern, everything can be analyzed so that you make a suitable decision.

Another advantage of using the eToro platform is that it offers a wide range of stocks, cryptocurrencies, ETFs, forex, indices, hard metals, etc. It does not charge any commission on buying or selling a trade. Although it enables free USD-based deposits, using any other currency for deposits has a small fee of 0.5%. It supports debit/ credit cards and e-wallets like Paypal, Skrill, and Neteller for deposits.

Using the Copy Trading service is absolutely free on the platform. The minimum trade while using this feature however is $500.

Pros
  • Convenient Copy Trading Platform
  • Easy-to-use platform
  • Around 20 million clients
  • No commission
  • More than 2,400 stocks
  • More than 250+ ETFs listed on 17 international markets
  • Deposits through debit/ credit cards, bank account, e-wallets
  • FCA, CySEC, ASIC regulation
  • Registered with FINRA, FSCS
Cons
  • Not suitable for advanced technical analysis

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What are the advantages of eToro’s Copy Trading Platform?

Real-Time Copying:

It allows you to copy traders on a real-time basis without any hassle. You can automatically copy the trader of your choice once you go for this feature.

You Trade with Them:

Especially when you are a beginner, this tool saves you time and effort for all the research and analyses. You simply utilize the strategies of experienced traders by mimicking their moves in your portfolio.

Works without any fee:

When you sign up for eToro and use their Copy Trading feature, you do not pay any fee. However, the minimum trade amount should be $500. There is no management fee or hidden costs. eToro’s Popular Investor Program directly pays the traders you copy.

Join a vibrant community of traders:

With eToro, you do not just sign up for a trading tool. You actually join a vibrant community of traders. This is how you connect and learn from the experts. You can go through millions of portfolios and make use of the statistics for your trading. Chatting with them, strategizing, seeking guidance, and giving insights to other traders- all of these happen on the platform.

What are the factors that help us decide on a suitable trader in the Copy Trading Platform?

Using a Copy Trading platform saves you the time and effort of studying assets, market trends, price predictions, etc. However, it does involve some work while you select the traders you want to copy. When you identify that the trader you are going for has similarities with your portfolio, that is when the decision yields results.

etoro copytrading

eToro CopyTrading

Another reason why you should invest some time in deciding the trader is the huge volume of traders available on eToro. With tens of thousands of verified investors, it is bound to be confusing, especially for new investors. That is why keeping your trading goals intact and opting for a trader in sync with how you want to go about the trades are important parameters.

We are listing the most important factors that help to opt for a suitable trader to copy-

Assets

Since you are going to engage in passive trading, considering the assets is the first step. Think about the assets you want to invest in. Are you looking for stocks? Are you looking for forex? Do you want to day trade cryptocurrencies? Or are you looking for long-term holdings? These are the questions that need patient study and once you are ready with the answers, you can select the trader you think is appropriate.

Performance

When you have decided on the asset class, you must shift your focus to analyzing the performance of the traders you wish to opt for. You must note that this parameter needs a thorough study. If a trader has gained significantly in the past, it does not mean that the trader will surely continue to earn profits. Hence, one time gain or a significant profit margin is not the criterion you’re looking for.

Then how do you make the call? Well, thoroughly study the trader’s history with the platform. You can use yardsticks which will be beneficial for your portfolio. Matrices like percentage gains and the trade period help you make this decision.

If you filter traders based on specific percentage gains and the kind of timeline you wish to track the trader through, then it will show you results accordingly. You can thus make a suitable selection. eToro works great with such filters and you can directly cut down to the chase.

Trade Timeline

Taking the trade timeline is another way to determine the right trader to imitate. When you opt for a trade duration as a matrix, you basically know if the trader is a short-term investor or if the trader keeps holdings for a longer duration.

Based on the filter, you can scan through the results that eToro will offer you and make the right choice. Once you narrow down the options, you can easily identity traders whose investment timeline matches your portfolio and they will be the right picks for you.

Risk

This is among the most important aspects and also one that needs close analysis. While trading platforms might offer you a variety of matrices, it is difficult to assess the risk involved with trading. Although you have the option of looking at the maximum drawdown percentage, this is in no way a concrete indicator of the risk taken by the trader you are analyzing.

To tackle this dilemma, eToro offers a risk rating on its copy traders. This rating is based on the automated eToro algorithm and the rating is assigned from 1 to 6 (1 being the lowest).

For instance, an investor who is trading volatile assets and has a maximum drawdown above the average would be assigned a high risk by eToro. On the other hand, an investor trading less volatile assets with a diversified portfolio would be assigned a low risk. In this manner, you can carefully study the risk rating assigned to traders and accordingly take a decision.

Getting Started with eToro to use its Copy Trading Platform

Step 1: Open a Copy Trading Account

eToro is a top-rated platform that is regulated by three authorities. You can open an account with eToro by providing your necessary personal details. eToro is a 0% commission fee brokerage platform. Click here to visit eToro & then follow the steps mentioned below.

You need to enter details like Your Name, Date of Birth, National Insurance Number, Address, and Contact Details (mobile and email).

  • Select a username and a password.
  • Enter a unique code sent to your mobile phone to verify user authenticity.
  • For a successful registration with eToro, upload the following documents:
  • Your passport or driving license.
  • Your bank account statement/ utility bill. This is needed to verify your home address.
  • You may proceed without uploading documents if you deposit less than $2,250 (around £1,600).
  • Uploading of documents is required for smooth withdrawals.
  • For your investment, eToro will not charge any commission fee.

Step 2: Deposit Trading Funds

Upon creating an account successfully with eToro, deposit funds before you can start investing. The minimum deposit is generally $50 which might go a little higher for a few countries. The minimum trade is $500 when you use the Copy Trading Platform. The deposit methods include-

  • Bank Transfer
  • Debit/ Credit card
  • Paypal
  • Neteller
  • Skrill
  • International bank wire

Step 3: Select the trader you want to copy

After your eToro account is successfully funded, you may search for a trader that you want to copy for trading. Click on the ‘Copy People’ button available on the left side of your screen.

When you are searching for a trader to copy, you are scanning through thousands of verified copy traders. To make the process easier, use the available filters.

Step 4: Invest in a Copy Trader

Upon selecting a trader to copy at eToro, click on the ‘Copy’ button. When the order box appears, you will have to enter your investment amount. When you copy a trader, the minimum investment must be $500 against the otherwise $50, which is the minimum deposit amount.

copytrader feature etoro

Many successful traders on eToro

If you select the option of copying ongoing trades, you copy the chosen trader’s future buy and sell positions in addition to the trader’s present asset portfolio. To complete your trade, click on the ‘Copy’ button.

Try eToro CopyTrader feature

Your capital is at risk

Conclusion

eToro does not only offer this feature, but it also makes using the platform easy for users. Thousands of new investors have opted for this platform by prioritizing this wonderful feature that allows them to enter the trading market with some relevant guidance. Opening a copy trading account with eToro takes just a few minutes.

Keep in mind the pointers we mentioned before you make the final selection of copying a trader. For a lot of people who were looking for details regarding this platform, we believe we have covered the required information to help you make a smart decision.

With over 20 million clients, no commission, high regulation, and of course features like the Copy Trading Platform and Copy Portfolio, eToro makes for a safe and convenient exchange for investors. It offers you flexibility, a wide variety of assets to choose from, and the ease that makes copying a verified experienced trader a matter of a few clicks. Explore the eToro platform to open your copy trading account today!

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