If you have watched TV or YouTube lately you might have seen adds for eToro where they show how unskilled traders can make the same profits as dedicated, skilled traders by using the copy trade function in eToro. One of the adds even shows you how a sloth can make just as much money as a skilled trader. But is this really true? Does copy trader work and does it allow you to make money without any effort on your parts. We have tried eToro copy trade, so you do not have to. Below you can read whether this function really works or not.
But first. Let us look at a couple of common questions.
What is eToro?
Etoro is a trading platform that allows you to trade stocks, forex and a number of different financial instrument. The broker allows you tot rade on desktop and mobile devices. Read this eToro review to learn more.
What is copytrader?
Copytrader is a service provided by eToro. The function allows you to automatically make the same trades as the trader that you have chosen to copy. This allows you to make trades without having to log in and make these trades manually. You can decide how much you want to invest in each copied trade.
Can anyone use copytrader?
Yes. Anyone with an eToro account can use the copytrader function.
Is eToro a scam?
No. eToro is not a scam. It is a well-regarded trading platform that allows you to trade a wide variety of different financial instruments. They are licensed by several institutions, including the British Financial Conduct Authority (FSA) and Cypriotic CySec.
Is copy trader a scam?
Copy trader is not a scam. It is a function that allows you to copy another traders transactions. The question is whether or not it is a good service. A question I will try to answer below.
We decided to try copy trader to see if it is as good as eToro claims it is. It was very easy to register an account with eToro and setup auto trading using the copytrader function. We appreciate that we are able to set how much we want to invest in each trade. We do not have to copy the amount that the original trader invested.
I was personally very impressed by the large selection of traders that you can copy. It was not hard to find a trader that shares my risk preferences and that invest in the types of instruments I want to invest in. If you want to maximize the potential return, you can easily find traders that trade Forex and CFD certificates to copy if you prefer a lower risk profile than it is easy to find traders who mainly trade stocks to copy.
The traders you copy will earn money from the trading fees you pay while trading. This motivates good trader to allow others to copy their trades since this makes them money.
I tried copytrader for 30 days and is happy with the results. Everything worked very well, and I made a profit that was a lot larger than it would have been if I tried to invest the money myself.
I do, however, have caveats that you should keep in mind if you want to try copytrader for yourself. The first caveat is that it is essential to take your time and choose a good trader to copy. Do not just copy the trader that shows the highest return. They might have gotten lucky with a few longshot trades. Look through their trading history and find a trader that seems to have a good and stable trading record. Do not copy a losing trader just because he made a few profitable trades during the latest period. Choosing the right trader is essential if you want to make money using copy trader.
The second caveat is that you should inspect your trades regularly. Don’t be afraid to stop copying a trader and start copying another if your trader starts underperforming.
The third caveat is that copy trader works better if you have at least 10 000 to invest. It is sometimes hard to make money using copy trader if you invest very small amounts. Fees will prevent you from making any money. You should be able to invest a few hundred dollars (or more) in every trade to make copytrader viable.
The fourth and most important caveat is that you risk losing money when using the copytrader function. You are not guaranteed to make money. If the trader you copy lose money, then you will lose money. Never invest money you can not afford to lose.