How Does Social Trading Work?
Powered by millions of users from over 140 countries, eToro has been able to refine their knowledge and experience into practical trading tools. For example, our CopyTrader™ technology enables clients to replicate another trader’s portfolio and trading activity automatically. Our social trading platform enables anyone to become a leader and a follower, and even if you simply want to trade on your own – we will still make sure you have the best trading experience possible.
Why Social Trading?
Simplicity: Using social features for trading assets online is intuitive, and easily accessible for both new and experienced users.
Diversity: Diversity is key for lowering risk when trading. On eToro you can spread out your invested capital across various markets by copying different traders.
Profitability: Since the launch of copy trading in 2010, around 78% of all copied trades were closed in profit (data was taken in August 2017).
Reliability: Since it operates under strict regulations, eToro’s social trading network is trusted by more than 6 million users worldwide.
Transparency: Exposing each trader’s portfolio, risk score, and track record, helps all clients to make smarter decisions when choosing who to copy.
Social Trading Newsfeed
Like any other social network, eToro’s social trading network offers its clients a newsfeed, which enables them to receive updates from other traders. Each trader can post relevant information, explain an investment decision, or share any other kind of knowledge with the eToro community. By following successful traders, our clients can become more knowledgeable and make better investment decisions.
Social Trading Tips:
- Pick a strategy: Will you focus on one specific Popular Investor, or spread your capital across several? Consider each trader’s risk score and track record before making your decision. To do so, you can use the Copy People page and filter results according to risk score, asset classes, success rate, and more.
- Pick a time-frame: Traders vary in style. While some prefer to be day-traders, opening and closing several positions during the course of a single day, others prefer to hold their positions for weeks and even months. eToro’s CopyFunds™ are a great option for those who are interested in long-term investments.
- Stay up-to-date: Follow the traders you copy closely to understand the logic behind their decisions, read their posts, and ask questions if necessary.
- Experiment: When opening an account on eToro, you receive $100,000 in virtual money. Use it to try different strategies, define your risk levels, and hone your social trading skills.
Our Social Trading and Investing Tools
Over the years, we at eToro have constantly been working to develop new tools which enable each member of our online community to become both a successful trader on their own and, in turn, contribute their knowledge and experience to other traders. Our revolutionary developments, such as our CopyTrader system, Popular Investor program, and CopyFunds, have allowed us to become the leading social trading network. Our future developments will enable us to evolve and build upon this status.
CopyTrader enables clients to automate their trading by allocating some of their funds to replicate another investor’s activity and copying every move they make in real time. This development came to fruition after we understood that some traders lack the time or experience to use traditional methods of online trading. Since we believe in full transparency, each user’s portfolio, track record, risk score, and success/fail ratio are available for all to see. Hence, our clients have all the information they need to choose the right trader to copy.
CopyFunds group successful eToro investors together, or several assets following a predetermined strategy (also known as a thematic investment), and routinely make adjustments to optimise the CopyFund’s performance. There are three types of CopyFunds: Top Trader CopyFunds, Market CopyFunds and Partner CopyFunds.
- Top Trader CopyFunds are based on the wisdom of a select few investors, who are frequently active and have shown consistent results in the past.
- Market CopyFunds group several assets together that have a similar theme.
- Partner CopyFunds are created by eToro’s partners, who devise their CopyFunds on eToro based on their knowledge and areas of expertise.
Just like any other funds, the fact that CopyFunds are comprised of several elements adds more diversity and reduces their risk as a financial instrument. CopyFunds are eToro’s next-generation investment product.
Popular Investor Program
eToro’s business model is based on its client’s financial success, so when they succeed – we succeed. That’s why we encourage our top traders to share their knowledge and reward them when more people copy them. Each Popular Investor can enjoy monthly payments, a spread rebate of up to 100%, and up to 2% annual payment on their Assets Under Management (AUM). Our Popular Investors earn real money for being successful traders and allowing others to gain from their wisdom, experience and success.