Welcome to the world of social trading! Here at eToro we believe that every trader should have the very best opportunity to succeed, from the get go. That’s why our trading experts have assembled their Top 10 Tips for successful trading. Our goal is to ease you into social trading and eliminate the hazards of trading blind. Below you’ll find solid principles for classical trading, in addition to social trading.
Not all trades are for all traders. In other words, your trading activity should correspond to your account size, to your availability and other individual factors. If your account is relatively small, you have to scale down your activity so that you don’t risk too much on any one trade. If you’re not available to monitor your trades constantly, don’t open high risk short term positions that require quick intervention. If you don’t know much about the Japanese Yen, don’t trade it until you do.
The OpenBook social trading network is there to connect you with other traders so you can learn and share ideas with them. Pick traders who have a similar trading style to yours and follow them so you can learn their strategies and techniques. Following other traders can also alert you to profitable trading opportunities.
One of the most common reasons people quit trading is heavy losses and the single biggest cause of losses, is failure to use a Stop Loss. Using a Stop Loss will prevent your losses from getting out of hand when the market goes against you. Use it wisely and you can avoid catastrophic losses. (We do not let our traders using the eToro Web Trader trade without a stop loss.)
The number one mistake new traders tend to make is closing their winning trades too early. By sticking to your trading plan you can learn to avoid making hasty exits that reduce your returns.
Once the market is going your way, and your positions show a profit, keep a close watch on them. Move your stop loss forward to your entry point to secure your investment. Then keep moving it forwards, in the direction of the trend, to secure your profits and prevent your trade from slipping back into a loss.
Never enter a trade because the price is suddenly rising or falling. Always plan your trades in advance. Know your desired entry point, Take Profit and Stop Loss rates before you trade and wait for the right opportunity to arise.
If you find yourself in a losing position, remember that it is better to save your energy, cut your losses and move on to the next trade. The financial markets are full of tradable opportunities, just waiting to be exploited, so don’t waste your time and funds on an unprofitable trade!
eToro’s investment network enables you not only to receive information about others’ trading activity, but to copy it automatically. With CopyTrader you can allocate a portion of your account to copying any other trader on the network, preferably a profitable one, so that your money can work for you even when you’re not trading!
The Guru Finder feature is very useful in finding the right traders for you to copy. By configuring the many parameters of this OpenBook search tool to your desired settings, you can find the right set of traders for you to consider copying.
Just because you have others trading for you, doesn’t mean that you should let them take over your account completely. Remember that you can always take over a copied trade if you see that it’s not going anywhere, or even stop copying a trader all together if you’re not satisfied with their performance. You should also be on the lookout for any new emerging stars on the OpenBook network that can perhaps make you more profits than the traders you’re currently copying.
Register for a real-money trading account at eToro today and make these tips work for you!