My Strategy
Be Picky When Choosing Who to Copy
It's tempting to follow the traders with 400% returns. But a quick bit of research (and common sense) will tell you that these traders are using high risk strategies. Forex is already high risk, so don't make it even worse. Follow traders who have a 10-20% return and have been doing so for the past year
eToro has great filtering tools to find the exact type of trader you want to follow. Look for someone with a majority of low-medium risk traders, and a low weekly drawdown
Diversify
Spread your investment over numerous traders. All traders have bad weeks. By copying as many traders as your budget will allow, you're able to mitigate the risk of having your entire investment wiped out by a single trade.
eToro Stocks are a Good Way to Diversify
I used to stay away from following traders who invested in stocks on etoro, but that has changed since etoro introcued real time stock trading. I've found that traders who invest in both forex and stocks provide more reliable returns over the long term
Choose Frequent Traders to Copy
You don't want to be stuck copying a trader who only logs in every couple of weeks. Look for gurus who make frequent trades.
How Much Money Do You Need to Get Started?
To copy a trader you need at least $100. I recommend investing around $100-$200 to begin with. Smaller amounts won't allow you to automatically copy all the trades of the people you follow. So you won't see any growth.
How Many Traders Do I Copy?
Currently around 5-7. As my investment grows, so will the number of traders I copy.
Why eToro
There are countless of forex trading platforms, but only a couple that offer a social trading platform - i.e the ability to automatically copy the trades of an experienced trader. I like the ease of use that etoro offers.
Can you Make Money with eToro
Probably. You can also lose all your money as well. Forex is risky.
A Big Disclaimer
Notice how I put "experiment" in the header of this page. That's because my investment is very much an experiment. Forex is extremely risky - even if you're following experienced traders on eToro. My experiment only involved a small amount of cash that otherwise would have been spent on a new Apple product - Don't risk your life savings on Forex. eToro is lots of fun - and that's how I approach this experiment. I don't take it too seriously and can handle seeing my account wiped out.
My actual savings sit in an Australian high-interest (4.75%) savings account, which, like all accounts in Australia is insured by the Australian Government (which is handy if my bank, rabodirect, decides to implode).
The legal bit: Forex and CFD's are leveraged products that carry a high degree of risk to your capital it is possible to lose more than your initial investment. Leveraged trading may not be suitable for all investors, so please ensure you fully understand the risk involved and seek independent advice if necessary.
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