The best eToro traders can be found using a number of tricks and tips. Choosing a top eToro trader to copy can be a daunting prospect, but I’ll guide you through some of the common pitfalls to help you select a copy trader, who will hopefully start bringing you in a decent return on your cash.
In this article we’ll look at:
There are thousands of users on the eToro site, who range from amateurs with a bit of spare cash, to people wanting to make a quick buck and all the way up to seasoned day traders, who are trading thousands and thousands of dollars each day.
If you’re new to trading in general then trying to make sense of this and understand who to invest your hard earned cash in can be a little off-putting, but don’t worry there are some useful indicators that we can use to improve our chances of picking the right traders.
Before we start I want to be clear that I’m not a trader myself, but have done a lot of research and have a good enough understanding of the platform to give you some sound advice!
OK, so if you click on the ‘People’ link you’ll be taken to a page which displays a list of traders:
Screenshot from eToro traders listing
eToro has pre-filtered this list into the following categories of traders:
- Top Investors
- Trending
- Most Copied
- Lower Risk Score
- Medium Risk Score
We’re going to ignore these for now, and instead create our own categories, using the ‘Advanced Search’ link at the top of the page, which gives you a wide range of criteria to help you select the top eToro traders:
Time Period
Use this to set the time from which you want to compare results for the different copy traders. Usually I would set this at 12 months to get a good comparison and show steady results. Setting this too low can expose you to more risk for traders who may have had a couple of lucky trades and are showing massive returns
Status
You need to be ‘verified’ to make trades on eToro, and ‘Popular Investor’ is a scheme that allows you to earn money when people start copying you. I would recommend checking both of these boxes
Name and Picture
I would always make sure any eToro trader I am about to copy has a profile pic, as it gives a little more credibility to their account
Copiers
Here you can filter by how many people are using the eToro copy trader function with this trader. I would be very careful with this metric. Just because a trader has a large number of people copying them, does not always mean that they are worth copying. The wisdom of the crowd is not always right. For example, a trader may have had a couple of good trades in the past month, so a lot of investors start copying them, then other people start seeing that they have a large number of copiers, so start copying as well, and this kind of snowballs up into really inflated numbers.
There have been many stories where a trader with thousands of copiers blew up their account and lost a lot of people a lot of money.
So the message is, I would not rely on this metric alone to make choose which eToro trader to copy, however, in combination with other filters it can be a useful gauge. I usually like to see at least 100 investors copy trading the profile i’m looking at so would set this to ‘Medium’
Copiers Change
To be honest I’ve never really used this filter, but it shows the % increase/decrease of the number of copiers over your selected period.
Copy Assets Under Management
Ranges from below £50k to over £300k. This shows how much of other people’s money the trader is managing and gives you an indication of the size of their portfolio. Usually when choosing an eToro trader to copy, you’d want a range of different sized porftolios across your traders. Diversification is key.
Return
Shows the percentage return across your selected period. What you choose here completely depends on your attitude to risk, as generally those traders showing higher % returns are likely to come with higher risks. I generally choose Medium.
Profitable Months
Shows the percentage of months that the trader has been in the green. I don’t find this too useful to be honest and would usually just refer to their statistics chart to gauge this myself.
Profitable Trades
Shows how many trades that a trader makes, come out profitable. Stay clear of this one as it really has no value, and is one of the most mis-leading filters in the list. The reason is that some traders will prefer to keep losing trades open rather than close them at a loss and affect their profitable trade ratio. This gives a false picture of their account and they will constantly be chasing this loss. In the long term this is untenable and you’ll end up paying for this loss as well if you’re not careful!
Risk Score
This is a variable figure that eToro assigns to a trader based on how volatile they consider the trader’s activities to be. This tends to fluctuate quite a lot and again, I would recommend having a balanced risk profile across your eToro traders.
Daily / Weekly Drawdown
These stats show the percentage that an account has gone down by on a given day / week.
This is a great indicator for you to check how risky a trader has been in the past. If they have a lot of weeks where they are showing high draw down percentages, then there’s a good chance this can happen to you as well, so I’d always steer clear of these guys. There are of course exceptions, usually that happen at the start of a traders history where they are risking more of their overall account to try to get quicker gains. If this is the case, I’d just recommend contacting the trader for more info as to why this happened.
Allocation
This shows how the eToro trader’s portfolio is split across:
- Currencies
- Commodities
- Indices
- Stocks
- ETF’s (Exchange Traded Funds)
- People (eToro copy trading)
Ideally, it’s best to have diversification across your set of traders that you copy.
Average Trade Size
Shows the average % size of the trader’s portfolio that they invest in trades. Also a useful metric to show how much of their account a trader is willing to gamble.
Exposure
Another useful metric which shows how much of their porfolio they are willing to expose. I would always keep this less than 50%.
Active Weeks
Just helps to give you an indication of whether they are a full time or part time trader
Trades
This can be useful to show whether the eToro trader has made massive gains just by a couple of trades or whether they do this regularly.
- Make sure that they have been trading on eToro for a minimum of a year
- Check their feed and see how communicative they are. Do they show a good knowledge in the market. How do they react when they are performing badly?
- Check their performance graph for consistency. You should ideally be looking for a graph showing steady returns rather than big swings in the red or green
- If they are trading in Forex then try to find traders who specialise in only a couple of currency pairs
- Avoid if they have weekly or daily draw downs of over 15%
- Avoid if they have a 100% profitable trades – anything over 80% can be suspicious and may mean they are holding on to losing trades
- Avoid if they are making crazy % returns – don’t be greedy. If someone has been making a 10 – 20% gain over the past few years then this is a lot better than someone with really high gains, who is more likely to blow up their account
- Avoid if they have a high copy/manual ratio – I would usually avoid if they invest more than 20% in other people
- Avoid if they have a high number of open trades. Simply go to their portfolio and if they have lots and lots of trades that are listed (especially if they are red) then run, run, run.
- Read their bio and if you’re concerned about anything, drop them a message to see how they respond
https://www.etoro.com/people/dimitrios1/
An example of the kind of trader profile that you should look for
If we have a look at the profile of Dimitrios, you can see that he has a pretty decent track record. What I like about his profile is that he doesn’t have a lot of fluctuations month on month and aims for steady long term growth.
You can’t see it on the screenshot, but he started off in 2012 with a loss of 50% but since then has turned things around and shows steady growth.
He has a pretty steady risk level of between 1 and 4, and his draw downs are 10% daily and 14% monthly, which is perfectly acceptable
He doesn’t have a great deal of copiers (only 271 at the time of writing), but is managing between 100 and 300k of assets. I like the fact that he has a split between indices, commodities and stocks, and if I click on his portfolio it shows he has no open trades.
This guy only does about 5 trades a week on average, and from what I can tell he only dips into the market when conditions are right and he sees an opportunity, which is an approach I like.
Overall, I don’t think you’d ever make tons of money from Dimitrios, however, if you’re in it for the long term and are after steady growth then he would be a good choice.
eToro's Trader 'Socialnvest' statistics
This trader however, on the face of things looks like he is doing amazingly well this month with a return of 668% and 87.72% profitable weeks, which sounds amazing.
However, by taking a quick look at his profile you’ll see that in the past 5 years he’s lost everything in his account on a number of different occasions. Steer well clear of this guy, who will remain anonymous!!
Along with the top tips that I mentioned above the main strategy that I have used is diversification. If you want to minimise your risk then you really need to diversify your portfolio across a range of things:
The criteria that I used for my portfolio was that I wanted:
- Between 5 – 10 traders to copy
- A split over long term and short term traders
- A good balance between stocks, currencies and commodities
- A range of risk levels between 3 – 7
- Range of trader type (both long and short term)
The good thing is that you can use etoro’s virtual money and start to copy traders in your virtual portfolio.
My approach was simple, I shortlisted 40 different traders, added them to my watch list to review their performance for a week, then whittled the list down to 20 and invested $1000 each of my etoro virtual money.
I spent the last month reviewing their stats and have finally whittled this down to a shortlist of 10 who I am going to invest in.
Fairly consistent performer, who doesnt open too many trades at once or keep trades open when they are losing
Length of time on eToro | 1.5 years | |
eToro Risk Level | | 3 |
Assets Under Management | | £300k + |
Number of Copiers | | 1140 |
Trades Per Week | | 3.37 |
Average Holding Time | | 3.5 weeks |
Maximum Weekly Drawdown | | 10.28% |
Past Annual Performances | | 69% |70% |
Portfolio Split | | Currencies |
Trading for 8 years, but only 1 on eToro. Does trading in his spare time. He would be my riskier trader to copy.
Length of time on eToro | 1 year | |
eToro Risk Level | | 3 |
Assets Under Management | | £300k + |
Number of Copiers | | 1589 |
Trades Per Week | | 10 |
Average Holding Time | | 3.5 weeks |
Maximum Weekly Drawdown | | 72.5% |
Past Annual Performances | | 309 % |
Portfolio Split | | Indices, Currencies |
Abnormally high returns in first year, but seems like a professional full time trader who is responsive and gets a lot of attention.
Length of time on eToro | 2 years | |
eToro Risk Level | | 4 |
Assets Under Management | | £300k + |
Number of Copiers | | 3683 |
Trades Per Week | | 2.39 |
Average Holding Time | | 6 weeks |
Maximum Weekly Drawdown | | 47 % |
Past Annual Performances | | 597% | 37% |
Portfolio Split | | Currencies |
Not on the platform for long. Trades currency pairs but seem to have a level head and not risking too much
Length of time on eToro | 1 year | |
eToro Risk Level | | 4 |
Assets Under Management | | £300k + |
Number of Copiers | | 1669 |
Trades Per Week | | 14 |
Average Holding Time | | 2.5 weeks |
Maximum Weekly Drawdown | | 18 % |
Past Annual Performances | | 84 % |
Portfolio Split | | Indices |
Works full time as a dentist, but seems to know what she is doing and has good track record over the past few years
Length of time on eToro | 3 years | |
eToro Risk Level | | 4 |
Assets Under Management | | £100 - 300k |
Number of Copiers | | 627 |
Trades Per Week | | 1.58 |
Average Holding Time | | 1.5 weeks |
Maximum Weekly Drawdown | | 33 % |
Past Annual Performances | | 414% | 450 % | 38 % |
Portfolio Split | | Currency |
Very rarely makes a loss but is making huge gains. Definitely one to watch, although returns seem too high
Length of time on eToro | 1.5 years | |
eToro Risk Level | | 1 |
Assets Under Management | | £100 - 300k |
Number of Copiers | | 447 |
Trades Per Week | | 3.57 |
Average Holding Time | | 11 hours |
Maximum Weekly Drawdown | | 13 % |
Past Annual Performances | | 205% | 4822 |
Portfolio Split | | Commodity |
Solid past performance, low draw downs and solely invests in stocks. Based in Mexico but doesn’t respond to English is the only drawback
Length of time on eToro | 3 years | |
eToro Risk Level | | 5 |
Assets Under Management | | < 50k |
Number of Copiers | | 83 |
Trades Per Week | | 2.23 |
Average Holding Time | | 2.5 weeks |
Maximum Weekly Drawdown | | 8 % |
Past Annual Performances | | 32% | 20% |26% |
Portfolio Split | | Stock |
So, we’ve looked at how to use the search filters and some top tips to find an eToro trader to copy, we’ve reviewed a couple of copy trader profiles and I’ve given you my list of eToros best traders to copy.
All that’s left for you to do now is to jump in and make a start as well. The final thing that I want to point out however, is that the above article is really just my advice based on the experiences I’ve had so far, so you should use this information to help you choose the best traders to copy based on your own risk profile.
Only risk what you can afford to lose, and if you’re more risk averse, choose traders with smaller returns, lower risk levels and therefore a bigger security for you.
Whatever you do, I would recommend as a first step you create a free account with eToro as it will cost you nothing to set up and start playing around with the system.
OK, Happy Trading, and if you feel like joining the ever growing Social Trading community then click on the banner below (and i’ll get a small referral fee as well, wooohooo!)
Summary Video
In case you’re too lazy to read all of the above, I’ve made a video that takes you step by step through what we’ve discussed in this article:
The good thing is that you can use etoro’s virtual money and start to copy traders in your virtual portfolio this concept is good. MyDigiTrade also a good virtual money copy trading company.