eToro’s popularity is primarily due to its highly encrypted platform that guarantees maximum safety of traders’ data or information. It is also licensed and regulated by top-tier financial authorities, including the FCA, CySEC, ASIC, etc. With eToro, you will trade securely and benefit from quality resources to build your skills and effectively conduct market analysis. For instance, eToro offers social and copy trading platforms, which we highly recommend for newbies who are yet to become independent. However, it is crucial to be well-versed in how the platforms operate and their requirements before getting started.
In this guide, we shed light on eToro’s copy trading and take you through the procedures for getting started with the copy trading platform. In the end, you should be able to decide whether copy trading on eToro is worth it and how much you need to get started.
In This Guide
What is Copy Trading With eToro?
Like the name says, copy trading on eToro means using the broker’s platform to mirror professional traders’ positions. To copy trades, you must identify top or professional traders and follow them on eToro’s platform. This is so that you can easily know when they open a position and replicate them if you believe they have a higher chance of earning profits. Note that when you copy a trader’s position, expect to earn profits when they do and make losses if the trades work against their strategies.
Although the main goal of copy trading is to benefit from other traders’ decisions, it is crucial to conduct thorough market research and analysis. Remember, losses are inevitable and even expert traders and investors with decades of experience have bad days. eToro’s CopyTrader platform is user-friendly, and you can use it manually or automatically, depending on your preference.
How eToro Copy Trading Works
As mentioned earlier, eToro’s CopyTrader platform is user-friendly and primarily recommended for newbies with limited trading knowledge and experience. You should take advantage of this feature and benefit from the financial market while improving your skills.
However, do not follow traders blindly or open positions that you are unfamiliar with since it is crucial to learn from your mistakes in case of a loss. So, always be equipped with adequate trading information for informed decisions.
Keep in mind that copy trading on eToro can be done manually or automatically. With manual copy trading, you will decide whether to mirror a trader’s position when they open one. In contrast, automatic copy trading doesn’t allow you to make a trading decision since it automatically replicates a position when a trader you follow opens one. While you get to enjoy the services for free, the traders you copy from get paid as part of eToro’s Popular Investor Program.
There are crucial elements to understand before joining the CopyTrader community on eToro, including the broker’s minimum deposit requirement, maximum trading amount, etc. To ensure you are fully prepared, eToro’s minimum deposit requirement for the copy trading feature is £200. The broker also states that the maximum amount you can invest in a trader is £2,000,000, and the minimum amount for a copied trade is £1. Plus, you only have to copy up to 100 traders simultaneously.
Overall, the copy trading platform has favourable conditions for newbies and budget-conscious traders. The good news is that it is also backed up by a demo account loaded with £100,000 virtual funds to help you practise how copy trading works without spending real money. Once you are confident in your skills, you can go to the live trading account, follow successful traders, and copy their positions with high-profit potential.
How to Copy Trade With eToro
Copying other traders’ positions on eToro is free, but you first need to set up an account to trade. In addition, there are no management fees or hidden costs. If you need help getting started, here are the proper procedures for setting up an account with eToro and starting copy trading.
You must visit eToro’s website to create an account and start replicating other traders’ positions. We help you gain quick access to the website by sharing links to click on this page. Before beginning the procedure, read and understand eToro’s general terms and conditions regarding trading and using its CopyTrader platform. Also, consider installing its app on your mobile device to trade on the go whenever you step away from your trading station.
You can now register an account with eToro by sharing your personal details, including your name, email, phone number, date of birth, etc. Do not forget to create a username and password to secure your account and share your income source to comply with anti-money laundering regulations.
According to the authority, all traders must verify their personal information to have their accounts fully activated. This standard protocol ensures the trading platform remains safe and free from fraudsters. Therefore, eToro will request you share copies of your documents to verify your identity and location. These include copies of your identity card, driver’s license, or passport and a recent utility bill or bank statement.
Once your account is activated, make a $100 deposit to access the assets listed on eToro. However, to copy trade, you need a minimum deposit of £200. Remember, deposits on eToro are free*, and you get to transact using either a debit card, e-wallet, or bank transfers. Once eToro confirms your deposit, test the CopyTrader platform via its virtually funded demo account.
*A conversion fee may be applied as withdrawals and deposits are conducted in USD. Any other currency will have to be converted.
You need to choose a trader to follow and copy their positions when they open new trades. Click “copy people” and find a trader by considering their performance, risk score, assets traded, etc. Remember, there are thousands of professional traders to choose from, and you must thoroughly examine their profiles to ensure you make the right decisions.
Choose a total amount for copy trading and click the copy button to automatically start replicating the traders you follow positions. The good news is that eToro features a Pause Copy element that allows you to stop mirroring a trader’s position without closing all the currently opened positions. There is also the Stop Copy feature that closes opened positions or transfers them to your portfolio for independent management.
Note that while copy trading is free on eToro, you will still incur commissions and spreads for trading the featured assets. Your trades will be similar to those you copy from, including having the same stop-loss and take-profit orders.
Pros and Cons of Copy Trading With eToro
- Opportunity to diversify your portfolio with little effort
- You get to benefit from expert traders’ ideas and increase your success chances
- You get to save time since orders are automatically executed
- You can copy trades of multiple traders simultaneously
- You lose control over how your money is invested
- Relying on copy trading might hinder you from quickly learning how to trade independently
- Returns are not guaranteed
FAQs
Yes. Copy trading is legal since there is no law prohibiting traders from sharing their trading knowledge and opinion. With eToro, you will copy trade securely since the broker is licensed and regulated by world-renowned authorities.
Yes. Many traders with limited knowledge of various asset classes are earning profits through eToro’s CopyTrader feature. However, it is crucial to find the best trader to copy and always be knowledgeable about the markets you trade to easily learn from your mistakes and maximise your potential.
There are thousands of traders on eToro to copy trade, and you can find the best by thoroughly analysing and comparing their portfolios. Some of the elements to consider include risk score, returns, number of trades, assets traded, activity level, etc.
Absolutely. Copy trading is good for beginners and highly recommended. However, we advise you not to blindly dive into copy trading without understanding the asset you are trading. Being knowledgeable about an asset allows you to track your trades’ performance and learn from mistakes in case of losses.
You first need to stop or pause copy trading to withdraw funds. Then, go to your copy trading menu and click “remove funds” to transfer the money to your regular trading account. You will then withdraw your money to your bank account using any supported payment method. Remember to enter the amount you wish to withdraw and in your preferred currency before submitting your withdrawal request.
Starting copy trading is easy if you have a trading account with eToro. Simply click “Copy people” on the broker’s platform to identify the best traders to follow. You will then enter the amount for copy trading and click “copy” to automatically start mirroring the trader’s position. With eToro, you can copy trades of up to 100 traders simultaneously but ensure you conduct market analysis before making a move.
Conclusion
Copy trading can be the best way to explore the financial market with limited knowledge. However, this trading method is highly risky and not for everyone, especially if you are after earning quick profits. Before joining the CopyTrader community on eToro, ensure you carefully review the portfolios of traders you wish to copy for the best decisions. Also, note that losses are inevitable, and you will lose money when a trader you copy from does.
That is why it is advisable not to rely solely on copy trading, but also consider other approaches like crypto copy trading or bots. Conduct your own research to see the profit potential in a copy trader’s or crypto copy trader’s position before clicking the copy button. Crypto trading bots, on the other hand, can provide additional automation and analysis to complement your decision-making process.
Disclaimer: eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. {etoroCFDrisk}% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
This communication is intended for information and educational purposes only and should not be considered investment advice or investment recom-mendation. Past performance is not an indication of future results.
Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.
25,000 hours of testing 70+ brokers. Our recommended broker is Plus500.
Our recommended broker is Plus500.