Hi Everyone,
I hope all of you are doing well. I have been reading some good
blogs
recently posted by some of the top performers.
There has been lot of blogs about **ysis and market so I
decided to write something about the copy trading
. I looked for
the articles regarding copy trading but couldn't find a simple
article for new comers.
Well the main aim of this article is to explain in very simple
words how does the copy trading works.
eToro is a social investment network which enables you to trade
differentcurrencies, indices and stocks while tapping into the
wisdom of the crowd to make smarter trading decision.
Copy Trading:
When I joined eToro in 2009, it had other advantages as a
platform, but
then they introduced eToro OpenBook together with the
CopyTrader
feature and it changed the face of eToro. So how does copy
trading
work?
Here is the explanation:
Suppose a person A is experienced and successful in trading for
years
and there is a new trader in the market, person B.
Trader B doesn't have any prior experience but he/she want to
invest
their money in the market in the hopes to make profits. Now
trader B
has got 2 choices:
Start shooting in the dark and hope for the best to make profit
Copy a number of traders after **yzing them for some time
If I were the trader B, I would choose the option 2. There are some
other
factors I would keep in mind such as diversifying the investment,
money
management and carefully choosing the person whom I am going
to copy.
A trader can copy as many as 20 other traders but the minimum
investment amount has to be $50 each. So once trader B chooses
to copy
trader A, then whatever trade trader A is opening in his account
will be
simulated in trader B's account too. Suppose trade A has got
$1000 in hisaccount and he opens a trade for $200.
Now suppose trader B has $200 dedicated to copying trader A,
then the same position in trader B's account will be equal to $40
(20% of equity).
Whenever the trader A closes a position in profit or in loss, the
same position will be closed in the copiers account too. I believe
it's as simpleas it could be.Watch VIdeo>>
Here are some points to note:
Minimum amount for copying anyone is $50.
Minimum trade amount for an individual trade is $1. If the trade is
less than $1, it won't open in your account . The best way to know
what is the minimum amount to copy is either try copying with different amounts in demo mode, ask the person you want to
copy about their average trade in percentages, or simply look for
the projected average trade figure that
is shown when you choose to copy the trader and select your
copy amount.
You can only invest 20% of your equity in one trader. Unless
your account is smaller than $250, in which case the 20% limit
doesn't apply.
If you close some trades manually yourself then that amount will
be credited to your balance and will be deducted from the
copying amount.
Suppose you are copying a person with $200 and you closed a
trade amounted for $20 then you will copying that person with
$180 now because you closed a trade manually.
You can un-copy the person you are copying anytime either by
taking the trades manually under your control or by clicking on
the "close" **on next to their name.
Remember that past performance is no guarantee of future
results and
you may lose money even if the person you're copying was
performing
brilliantly in the past. So make sure to monitor your account and
be ready to stop copying traders if they're not performing well.
If you have any issue with the copy trading or in general it is
very important to raise the issue with the tech support so that they can
look into it.
If any instance in time you feel that you have learnt a lot and you
can trade own your own, then you can keep copying and still do
your manual trades.
So I wish you all a very good week ahead and lots of profit.
Learn more about the Popular Investor program HERE
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