eToro Copy Trading Review – Quick Overview & 12 Month Results

The etoro social trading and copy people feature is a brilliant idea. You can see a profile of traders from around the world, read their bio and see their performance as an eToro trader.

You can pick a trader or as many different ones as you like and allocate money to copy their trades. As the advert suggest you can literally just sit back and leave the trading to someone else.

The search functionality is really good. You can search for traders via their location, the market they trade in, % gain and vary the time period, and then filter these results by:

Social: Number of copiers, copiers change, copy AUM (Assets under management).

Performance: % return, % profitable months, number or % profitable trades.

Risk: Risk Score, Daily Drawdown & Weekly Drawdown.

Portfolio: Allocation, Average position Size.

Activity: Active Weeks, Number of Trades.

The eToro watchlist.

Under your menu on your eToro homepage is a ‘watchlist’. If you find a trader that you might like to further research or copy for the future then when on their profile click on the button with 3 lines and a plus sign, you can then add this trader to a watchlist of your choice.

Invest with the copy trading function.

Once you’ve found your trader copying is very easy…. just hit the blue copy button. In the next pop up screen, you will have the option for the amount you want to copy. A tip here is that in the bios of many traders they will say how much they think is a good idea to copy with. It’s best to take this into account. Currently the minimum on eToro is $200.

You will then be asked to ‘stop copying‘ if the trade values fall below a certain amount. It’s best to look at the trading style for each investor on this. The issue you have if this too tight is that you could be stopped out in a losing position when in the long term they could be a good investor. This could certainly happen if there is a stock market crash. Would you really want to be selling out at the bottom?

Finally there is a tick box to ‘copy open trades‘. Once again you need to think about this. If the trader makes lots of short term trades you could get in at the wrong time at a different price. You will still exit the trade when they exit. Therefore you could see a loss, when in fact the trader might have made a great trade. On the other side if you don’t tick this box you will only enter copy trades when the trader you are following enters new positions. Not copying open trades could take a lot longer for your funds to be invested.

Are there any fees in copying traders?

“There are no additional charges for copy trading. eToro is a social trading platform that allows you to copy other traders of your choice so that any trades they open will automatically open in your account with a proportional percentage of your allocated funds.

eToro’s commission comes from the SELL/BUY spread of the trades you place and the good news is that spreads remain the same regardless of whether you are copying someone or trading manually.”

It’s key to note here that there are no additional charges, but usual fees will still be incurred. These may include overnight and weekend holding fees too.

12 months of eToro copy trading review.

Hooked by this fantastic idea we started a trial. We chose 7 of the most popular traders. Our idea was that we wanted ones who were consistently good achieving over 15% per year or more, didn’t have high risk scores or large drawdowns. There are 1,000s of traders to follow and this is our first test, so there’s plenty to debate. The dates were 18th September 2019 to 17th September 2020. We also did not copy open trades.

Here are the results:

TraderStart CopyP&L 1 YearP&L 1 Year $
arash00719/09/201918.98%37.95
OlivierDanvel19/09/20193.82%7.63
iEarnings18/09/201911.71%23.41
DavidePerina19/09/2019-1.28%-2.56
Berrau18/09/2019-29.93%-59.85
Scespejo19/09/2019-28.11%-56.22
Shinglong8019/09/201920.48%40.96
AVERAGE  -0.62%-$8.68

The initial figures were $200 spent on each totalling $1400 so a return on investment of -8.68/1400 = -0.62%

A few points to note, the Berrau account and Scespejo accounts were performing badly, so we cancelled these. Berrau appears to be no longer live, so we are unsure what happened here. Scespejo went on to lose 34.41% in April. And only made a profit in Aug of 15%. We would have lost even more.

Should we be pleased?

Initially this would look like a bad result. However we have a lot to be happy about.

  1. The balance just 1 month after our end date was positive.
  2. It took awhile for the $200 to get invested as we didn’t copy open trades.
  3. Due to COVID 19 the stock market took a huge tumble during this period.

With our 3rd point in mind it’s only fair to compare any performance to those of the general market. An easy comparison is to the FTSE 100 & the S&P 500.

 Open 18/9/19Close 17/9/20Difference% P&L
FTSE 10073236056-1267-17.3%
S&P 500 3005336536012.0%

Compared to the US index our eToro copy trading results are poor, but compared to the UK index and many other leading global indices our results are actually not too bad at all.

Another positive is that many traders have returned strong growth. In our youtube video of this post we also looked at the 2019 and 2020 performnace of the top 3 most copied traders. All 3 in the period returned a profit and 2 of them are on target to return over 40% in 2020.

In summary we are very optimistic about the future of copy trading with eToro. This is our first year of investment using this method. Please watch out for our future posts and videos on eToro copy trading and investing.

If you are interested in using eToro please click here to visit their site through our affiliate link >>>

Please be aware that all trading involves risk. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. This content is for educational purposes only and is not investment advice.

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