July 30, 2022

How to Choose Best eToro Traders

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You can copy experienced traders on eToro. But there are so many to choose from. Who are the best eToro traders to follow? Read the full review.

If you're new to trading stocks or cryptocurrencies, there are many challenges.

  • What should you invest in?
  • How much?
  • And when?

After all, experts devote their entire careers to investing. Yet, still make mistakes.

How can a new trader do any better?

Well, you could do all of your own research. But that involves a lot of time and effort.

Or you could get help. There are robo-advisors and financial advisors, but both may cost money.

Then there's copy trading. And it's free.

eToro's popular CopyTrader feature lets you mimic the trades of experienced traders.

How do you pick the right trader to copy?

Read on to learn everything about picking the best eToro traders. Or learn more about copy trading below the list.

What is Copy Trading?

If you're new to copy trading, you may be wondering what exactly it is and how it works.

In principle, it's pretty simple. Either you want to learn from experienced investors when making trading decisions, or you don't want to spend the time and energy to make the decisions yourself.

Either way, copy trading can be the answer.

It's often used in place of a financial advisor or robo-advisor, which can be costly. But copy trading is frequently free (it is on eToro).

Robo-advisors let you choose your level of control over your investments. Want to be fully passive? That's possible. Want some control but also some help? That's available too. There are many good robo-advisors to choose from, but these are the best robo-advisors.

To start copy trading, you just tell your investment account to mimic the trades of another trader.

When they open a position (buy), you open one too. And when they close a position (sell), the same position will be closed in your account. It's really as easy as that.

Typically when you start copy trading, you'll pick a trader who's already active, which means they'll already have some open positions.

Since the market conditions won't be identical to when they opened those positions, you may opt to only copy new positions. It is possible, however, to copy all open positions of the trader you choose.

This may be the most difficult decision you have to make, apart from deciding if copy trading is right for you.

How to Choose an eToro Trader?

When choosing the best eToro copyable trader, there are a number of factors to consider.

  • Risk Score
  • 12-Month Return
  • Number of Copiers
  • Portfolio Composition
  • Personality

On eToro's platform, you can use search filters to investigate each of these factors. Here's what they mean.

  • Risk Score: A trader's risk score (1-10) is determined by eToro's proprietary formula. It depends on the volatility of assets in a trader's portfolio, their level of diversification, the amount of leverage used, and more.[1]

    1-3 are considered low, while 7-10 are considered high. Traders with a risk score that's too high may be blocked from being followed.

    Which risk level is right for you? Choosing a lower risk score may mean more stable investments, but lower returns. Conversely, a higher risk score means a greater chance of losses, but higher potential returns as well.

  • 12-Month Return:The 12-month return is shown as a percentage on a trader's profile. It gives you a summary of their profits or losses over the past year. Comparing this number with the overall market and other traders can give you an idea of the trader's ability to navigate the market.

  • Number of Copiers: A trader's number of copiers or followers isn't in and of itself a sign of ability, but it stands to reason that if a trader has a larger number of followers than average, they're worth looking into.

    Even if their stats are similar to a trader with a lower number of copiers, they may provide other added value, such as frequent interaction or learning opportunities.

    Is eToro safe and legit? eToro is regulated by leading financial institutions, like FINRA, FinCEN, and more internationally.

  • Portfolio Composition: You may want to consider an eToro trader's portfolio composition before following them, even if you know very little about investing.

    For instance, if you're interested in the crypto market but not stocks, you'll want to know whether a successful trader is also focused on cryptos versus stocks.

  • Personality: As you have probably gathered, there are a lot of personal choices involved in choosing an eToro copyable trader, and nowhere is that more true than for personality.

    Depending on how much you intend to engage with the trader you copy, this may or may not be important. You can learn more about each trader by visiting their profile and scrolling their wall to see their posts and other past interactions.

The Best eToro Traders

Now that we've looked at what goes into choosing the best eToro traders, let's look at some of the top traders.

Keep in mind that the stats of the best traders on eToro change often.[2] But eToro does a good job of helping you find traders based on various metrics.[3]

Tip: If you don't find who you're looking for below, consider visiting their Discover page to see which traders are trending. You can also sign up for eToro's newsletter, where they'll tell you their Popular Investor of the Month.

Top Performing eToro Traders

Here are some of the top copyable traders on eToro.

Is eToro a good trading platform for beginners? eToro's social and copy trading features sets it apart from the crowded field of investment apps. But some have more account features, offer more stocks or cryptocurrencies, or have fewer fees. Read our full review of the best investment apps for beginners.

Most Copied eToro Traders

Here are some of the copyable traders on eToro with the most followers.

eToro isn't the only social trading app to choose from. Dozens of platforms let you discuss investments with friends. Which is ideal for you? Read the full review of the 10 best social trading apps.

Bottom Line

There are plenty of eToro traders worth following, and you'll notice common traits among the most popular traders. Since most copy traders on eToro appear to favor returns over security, almost all of the recommended copyable traders will have a higher risk score, usually 7 or 8.

You may also notice that some popular traders have a negative 12-month return. That tells you two things. First, that copy trading, like all investing, carries risk. And second, if you're going to be successful, a long-term view is the healthiest.

Everyone has bad years. It's the lifetime results that matter.

References

  1. ^ eToro USA LLC. Risk Score: What it is and how it's calculated, Retrieved 7/14/2022
  2. ^ eToro USA LLC. User Profile Stats Page Explained, Retrieved 7/14/2022
  3. ^ eToro USA LLC. How does eToro choose the top ranked traders?, Retrieved 7/14/2022
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Jeremy Harshman is a creative assistant at CreditDonkey, a crypto comparison and reviews website. Write to Jeremy Harshman at jeremy.harshman@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

eToro USA LLC; Virtual currencies are highly volatile. Your capital is at risk.

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