I've been copy trading on eToro for the last few years. In this post I'm going to share some the reasons why I love copy trading. If you're new to copy trading, make sure you check out this post on what copy trading is and how it works.
Great way to learn about trading
Trading forex or stocks can be both confusing and very difficult. For new traders, there is a big learning curve. One of the best ways to learn about trading is with Copy Trading. When you Copy Trade, your brokerage account automatically copies the trades made by a more experienced trader. You can see in realtime a trader in action.
On eToro, which is the copy trading platform I use, traders also regularly share social updates on their feed. They explain their trades and the market conditions. I find myself learning so much just by following lots of traders.
Less Time Consuming
Trading is very time consuming. Don't believe the ads which tell you that you can make a full-time income just by working an hour each day. The reality is you need to be plugged into the news and you're constantly checking charts, testing ideas, conducting research etc. When I was manually trading, I was spending more time than I would be if I had a full-time job.
With copy trading, you're letting someone else do the hard hours for you. Of course, in return they earn rewards for their profitable trading. So they are happy to do this. But it gives you the freedom to still trade, but do so with much less time. Copy Trading isn't a full time job, it's not even equivalent to a part time job. You can get started copy trading in just a few minutes.
Access to Markets you Aren't Familiar With
On eToro, you can trade assets from markets all over the world. These include stocks, ETFs, indices from the U.S, Europe and Asia. There are also traders on eToro who specialise in trading certain markets. One of the traders I copy, only trades the GER30. This trader has a deep understanding of the German economy and how it's affected by the world. And he uses that knowledge to trade the GER30 Index. I would never be able to gain the same level of knowledge and understanding.
There are also traders who specialise in certain forex pairs, commodities, stocks and even cryptocurrency.
So Copy Trading lets you tap into the knowledge of traders all over the world, who specialise in very specific markets.
Tap into the skills of experienced traders
Let's face it – trading is hard! It takes a lot of practice, and some skill. Copy Trading lets you tap into the skills of more experienced traders. Some of the traders on eToro have been trading for decades and really know their stuff. Even if you trade on your own, you can still use copy trading to build you skills and tap into strategies and markets you're not familiar with.
With Copy Trading you can copy multiple people at the same time. If you're copying say 5 people, your trading account could be making 50+ trades every single week. On eToro your trades are opened in the same proportions that the trader makes and not the same $ amount. This means you can start trading with less money (Just $200 in fact!). By copy trading multiple people you'll be using small amounts of capital for each trade, spreading out the risk.
CopyTrading on eToro
I use eToro. It's one of the largest copy trading platforms with over 5 million members. And there are lots of profitable traders on the platform – so there is lots of choice on who to copy. This is why I recommend it as best place to start copy trading.
If you're looking to start copy trading, you can sign up here. It's free to create an account. You can also use eToro's free virtual account. When you sign up, they give you $100k in virtual money and you can use this to try copy trading or just manually trade.