I think CopyTrading is a great way to invest. I've put together a guide on you can copy the trades made my other traders.
Maybe you've tried trading something like binary options and realised that you need more than luck to actually be successful with trading. Or maybe you've tried a forex robot and realised that you need something that doesn't just work for a 2 weeks before going horribly wrong.
Copytrading is where you automatically copy the trades made by a more experienced traders. Whenever the trader makes a trade, your account will too. It's a great way trade stocks, forex, cryptocurrencies and more without needing to know about trading.
Step One: Grab a CopyTrading Account
The first step is to open a CopyTrading Account. I recommend using eToro. It's one of the worlds most popular copy trading platforms with over 5 million members. I recommend it because it has the largest range of markets and assets to trade and the highest quality traders to copy. They also have the most advanced copytrading features.
Disclaimer: 62% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
On eToro you can copy traders who invest in Forex, Stocks (from all over the world), ETFs, Indices, Commodities and Cryptocurrencies.
Make a Deposit
Opening an eToro account is free. To start copy trading on eToro you need to deposit at least $200. Although you don't need to deposit more than this, if you just want to start small.
When you register with eToro (it's free), they give you a free virtual trading account. So if you don't want to make a deposit yet, and want to practice copytrading using virtual money you can do that too.
Verify Your Account
You'll need to go through the verification process on eToro. This doesn't take very long and it's required to verify your identity.
Step Two: Find People to Copy
Once you've signed up and made a deposit you need to find the right people to copy. DONT just copy the first people you see. Instead use these tips to find the best people:
Search Tips for Finding Who to CopyTrade on eToro
- Risk Score – Only copy traders with a risk score between 1-4. eToro gives each trader a score and this is based on the % of their account capital they risk per trade (the lower the better), the markets they trade and the leverage they use.
- Time Period – Only copy traders who have at least 12 months of history on eToro. The longer the better. It's really difficult to trade profitably for years. This is a sign of a good trader.
- Daily Drawdown – Less than 5% is good. This is the maximum amount a trader has drawdown over a daily period.
To search for people Visit the “Copy People” page on eToro. Then click the “advanced search” button. Input my recommendations to find better traders.
Step Three: Copy People
Once you've found someone who has had a profitable trading past, and the right low risk trading strategy (low risk score of 1-4), you can now copy them.
To copy a trader on eToro, visit their profile page and then click the big blue “COPY” button. Here is an example of a traders profile page.
To copy a trader, choose the amount you wish to allocate to that trader (remember the trader never gets access to your funds and you can stop copying at anytime. When you allocate funds you are simply etoro to use that amount of money to copy every action made by a trader). That's! Now every trade made by that trader will be duplicated into your account.