Note – This post doesn't apply to US customers
eToro is the trading platform I use. It has some excellent features including copy trading. In this post I'm going to share with you everything that is new for this year and how you too can get started trading and copy trading.
Let me know in the comments if you have any questions or need any help getting started on eToro.
What is eToro
eToro is a broker and a social network rolled into one. Using eToro you can trade stocks, forex, commodities, indices and cryptos just like other trading platforms. But you can also share your trades with the rest of the community like a social network. Think of eToro as a cross between a trading platform and facebook.
eToro also has a unique feature called CopyTrading. This is where you automatically copy the trades made by more experienced traders. Whenever a trader makes a trade in their account, the same trade will be made in your account too. By using copytrading you can tap into the knowledge of experienced traders. So even if you're new to trading, eToro can be a great platform to learn and become a better trader.
What you can do on eToro:
My favorite part of eToro is copytrading. Copying someone is as simple as finding a trader that has a profile you like (more on that below) and clicking a “copy” button. This will allocate funds so that whenever the trader makes a trade, a similar trade (in the same proportion) will be made in your account too.
Disclaimer: 67% 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.
Invest in CopyPortfolios
CopyPortfolios let you invest in a themed portfolio. For example you could invest in Mobile Payments, Stocks Warren Buffet trades and even the top traders on eToro. CopyPortfolios require more capital then copytrading, and are suited to those looking for a longer term investment.
eToro makes it really easy to trade stocks. You can invest in real stocks like Apple, Netflix, Mcdonalds etc. eToro has stocks from markets all over the world including Asia, the U.S and Europe. But the best feature is partial stocks. You don't need to buy one full share. You can invest just $50 or any amount to purchase a fraction of a stock.
Trade other markets
eToro is also a great platform for trading forex and commodities. You can invest in these right alongside your stocks and crypto investments. You can also copytrade and manual trade at the same time.
Learn about Trading
eToro is a great place to learn about trading. eToro gives you a free $100k virtual account when you sign up. And you can switch between your virtual and real account with a couple of clicks. And you can trade in both at the same time. I like to test out trading ideas in my virtual trading account.
As well as practice trading you can also learn simply by following other traders. Because everyone's trades are shared, you can get a first hand look at how real traders operate. Many traders post to their walls with helpful tips about why they've made certain trades.
What's New on eToro in 2019
Over the past year eToro has launched a lot of new things. If you haven't been trading on eToro for a while, here's a catch up on some of the things that have recently happened.
New Cryptos to Trade:
As of writing you can now trade 14 different cryptos on eToro. More recent additions include Zcash, Cardano, Binance Coin and EOS. eToro has been adding new cryptos every few months. I expect them to continue doing this over the coming year.
Reduction on Spreads
eToro reduced the spread on cryptos last year. The spread is the small difference between the bid and ask prices. You pay a spread instead of a commission or trading fee. By reducing the spread, eToro has made trading cryptos more profitable on their platform. If you've been put off by the spread in the past, you should give eToro a second look and see what's on offer now.
Do you want to trade Bitcoin against Ethereum? Or maybe Bitcoin against Stellar? Well now you can. eToro has added a bunch of crypto crosses. If you're a big believed in Bitcoin or super bullish on alts, then this could be for you.
Trade Cryptos against Various Currencies
Most trading platforms only offer BTCUSD. Well on eToro you can also trade BTCJPY or ETHGBP etc etc.
CopyPortfolios are themed investments made up of a number of underlying assets. eToro has added new CopyPortfolios (these used to be called CopyPortfolios). Of particular interest is the Cannabis portfolio made up of stocks in that industry and the Outsmart the Nasdaq which uses machine learning and wisdom of the crowd to try and beat the Nasdaq 100.
eToro has launched a mobile crypto wallet. You can use it to store and maintain custody of your Bitcoin, Ethereum, Ripple and Litecoin. You can exchange between different currencies using the app. Soon, you'll also be able to transfer between your eToro account and crypto wallet as well.
My top tips for success on eToro:
Here are my top tips for having success on eToro in 2019…
Copy Traders with 12+ Months History on eToro
My number one tip for copytrading on eToro is to only invest in traders who have a history of at least 12 months on the platform. Anyone can get lucky for a month or two, but it takes real skill to be profitable over an entire year.
Copy Traders with a low risk score
eToro gives traders a risk score based on the markets they trade, the leverage they use and the % of their account capital they use for each trade. The lower the score the better. I like to copy traders with a risk score of 4 or lower. I find the sweet spot seems to be around 3.
Copy multiple people
Diversification is a key principle of successful investing. And eToro is no exception. All traders have bad days, weeks and even months. So in order to protect your account, I recommend copytrading multiple traders. I like to copy a mix of stock, and forex traders. Personally I like to copy 80% stock traders and 20% forex traders. I find that stocks are less volatile and these traders perform best over a long period of time. This is just my personal approach and I encourage you to do your own research.
Don't go all in on cryptos
It's tempting (especially while the price of cryptos are so low) to invest everything in Bitcoin and other coins. While I'm a huge fan of cryptocurrency, and I've done extremely well in the past invest in coins, I wouldn't risk everything. Cryptos will continue to be hugely volatile over the coming year. If you are going to invest in cryptos make it a small % of your account capital. This way if it takes off you'll still have skin in the game, but if it continues dropping you won't wipe out your account.
Are you looking for a longer term investment on eToro. You should look at some of the ETFs they offer. I love ETFs. I invest in them through Acorns. You can also invest directly in them on eToro. Make sure you do your research to figure out which ones are suitable for long term investments (some ETFs on eToro are designed to go up when their is volatility in the markets or when they crash – these aren't long term investments). The SPY500 for example is designed to track the S&P500 Index.