eToro CopyTrader

eToro CopyTrader

The Forex market has been rapidly evolving every day, and new methods and modes of trading have been introduced to make the trading simple and profitable for traders. Different platforms provide different services online to Forex traders, and create different opportunities to allow successful trading. Copy Trader is one of them.

Many of you may have heard about it. Although it is a new concept, yet, millions of users around the globe have been benefiting from this method. In a copy trading, new entrants or inexperienced traders get an opportunity to copy the open positions of other investors in the same network, which enable them to experience the wisdom of the experts as they learn and copy from other traders. It is like a social investment network, where traders get to interact with each other by investing, trading, learning and sharing knowledge across the network.

What is eToro CopyTrader?

When you talk about copy trading, eToro is the first name that comes into your mind. eToro CopyTrader is an online platform that has brought around 3 million traders from all over the world to one place, so that they can share their trading experience, and increase the likelihood of placing more profitable trades. It was formed with a view to replace the conventional banking and financial system with more efficient and transparent financial system.

eToro is like a pool of unlimited experience and opportunities for Forex traders. Once you dive into the trading world of eToro, a lot of trading avenues open for new as well as experienced traders. Let’s look at some of the tools and services offered by eToro CopyTrader. In a short period of time, eToro established a good clientele and became very popular among the forex investors, due to which, it started making news headlines on different news platforms around the world, including Bloomberg, The Sunday Times, The Telegraph, Financial Times, City A.M., Tech Crunch, Money.com, and Wired.

eToro’s Open Book

Open Book is a term used by financial institutions to show the aggregate number of latest trades that are updated in real time. However, eToro’s Open Book is one step ahead of it. It is a social trading program where eToro traders can share their market knowledge and experience to benefit from one another. This program allows you to follow any investor or trader you like, and in return, you can also get the following. eToro’s Open Book gives you regular updates on live trading feeds, performance charts and patterns of your as well as others’ trades, and a chance to interact with other eToro traders so that you can learn and share the experiences.

 

Practice Account

Once you login to eToro, you can use OpenBook as a practice account user, but you must know that you will not be able to access the trading profiles and activities of others unless you are placing real trades, because eToro wants to be sure that the performance backed decisions are made on the basis of real trading. However, it does allow you to copy the real trade actions into your practice account for a better experience.

Performance Calculation

The performance, on eToro, is calculated on the basis of number of trades, winning position ratio, or daily or accumulated return percentage. Moreover, you can also see the trading stats on the basis of risk and reward percentage, instruments you trade, the time period of trade, etc.

Frequent Updates

The trading activities are frequently updated, and it takes just a few seconds to see the published results of your latest trading activity. In case of high volume, the public feed filter the trade activities so that you can only see the feeds of the traders you follow and get a better browsing experience. These feeds are shown in the real time activity, and are always accurate.

How does CopyTrader Work?

One of the outstanding features of eToro OpenBook is the CopyTrader. It is a people-based portfolio that allows you to see the real trading activities of traders, so that you can copy the opened positions of the traders you like. CopyTrader is very easy to use. All you have to do is follow three simple steps, and start copying the trades of your chosen investors. The steps include are finding the traders you wish to copy, setting up the CopyTrader Account, and managing the people-based portfolio.

 

How to Choose?

When you visit eToro, you can see the traders ranking, done on the basis of winning ratio, or total gain percentage, but you can use different filters according to your requirements to choose the best trader. You can use the maximum ratio of highly leveraged trades, the minimal duration of average position or minimal winning ratio in a given period, the maximum amount of leverage used in a single trade, etc. There are a large number of filters you can choose from, and eToro is continually trying to make its application better to provide the best experience to its users. The ranking criteria may vary from time to time as eToro keeps on improving the ranking algorithm for the traders.

Gain Calculation

The gain on CopyTrader application is calculated with the help of a formula, called Modified Dietz, which is a very effective measure of calculating the gains. You can learn more about it by visiting the blogs section of eToro CopyTrader.

Number of Investors that can be copied

You can copy more than one trader with CopyTrader, as it allows you to copy up to 20 different traders at any time.

Amount Required

The minimum amount required for eToro CopyTrader is $100. Maximum amount one can invest in a trader is $500,000.

Trade Size

The minimum amount required for a copied trade is $1. The trades below this amount will not be opened. If a copied trade is manually closed, the funds will return to the CopyTrader balance

Security of Personal Information

When you sign up for the account, your personal information is fully secured on the eToro’s system. eToro traders cannot access your personal data. They can only access the limited information that is related to your trading activities.

Copy All Trades:

eToro CopyTrader allows investors to copy all open trades of the traders. The copy trades will be opened automatically, following these rules:

  • The copied trades will open with the market rates available at that time irrespective of the rates in the original trades.
  • However, the SL and TP will be the same.
  • Every change in the original trade including closing of trade will mirror on to the copied trade.
  • Any copied trade can be closed without closing the copy account except for stocks.
  • Stock orders can be entered only for existing stock trades and implemented at the first execution point occurring after the copy started.
  • Stock orders will remain pending in your account until the original trades are executed.
  • After execution, the system will enter the purchase order for your account.

Copy New Trades:

eToro CopyTrader also allows investors to copy only new trades opened by the traders. The copy trades will be opened automatically with the following the rules:

  • Only those trades will be copied that were executed after the trade copy action started.
  • Copied trades will have the same rates as well as the same SL and TP as the original trades.
  • Every change in the original trade including closing of trade will mirror on to the copied trade.
  • Any copied trade can be closed without closing the copy account except for stocks.
  • Stock orders can be entered only for existing stock trades and implemented at the first execution point occurring after the copy started.

Copy Stop Loss(CSL) Feature:

Any copier can effectively automate risk management on his CopyTrader potfolio by setting Profit/Loss limits on every copy relationship. The default value is 40%, but can be manually set in-between 5% to 95%. The system will not allow you to set this value so small that it may close the copy relationship automatically at any point. When the copy balance is reduced by this percentage through losses, CSL is triggered which closes all the positions in that specific copy relationship. CSL value is recalculated when

  • The copy amount changes.
  • Account balance of copied trader changes.

Copied Trades SL:

In regular trading, when SL increases, funds are added from account balance to the trade. In copy trading, when the copied traders increase their SL, no funds are deducted from the overall copy amount. This enables the trades to go intermittently into losses without being closed by the CSL. The gain/loss of a copied trade is calculated according to the original amount invested in the trade. ‘Add funds’ feature allows copier trader to increase his copied amount for certain traders to gain maximum profits. Similarly, ‘Pause Trades’ feature holds on the trades instead of closing them completely.


 
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