Frequently Asked Questions
Roughly 80% of the queries I get on eToro are similar so I’ve compiled them into one easy-to-read FAQ. Please message me on eToro if you have any questions I should add.
Q1: How much should I copy with?
A: I understand that most people don’t have thousands lying around but this is what I advise:
Minimum — $350
Good Investment — $2k to $4k
As an aside, I have much, much more than the above amounts in my account :)
Q2: Is now the right time to copy?
A: My aim is to have a return of 50%+ in any 12-month period (currently much higher), so in theory it is always a good time to start copying.
Q3: How long should I copy for?
A: Most copiers have trouble sticking with any investment (not just copies!) for more than a few days. You are almost guaranteed to lose money this way — it has been shown that investors that trade more frequently make less money. Make your investment and walk away! I suggest a minimum copy period of 6 months.
Q4: Should I copy open trades?
A: Yes, always. In short, I use the full portfolio to manage risk and maximise returns.
In long, I will hold most of our positions for weeks if not months. Therefore you do not have to worry about me suddenly dropping a large portion of the portfolio just after you have bought. I only pick up a few new positions per week, so if you don’t copy open trades it will take some time for your entire copy amount to be invested.
Q5: How do I copy open trades?
A: EToro has a good article on this and other topics with regards to copy trading: https://www.etoro.com/en/social-trading-tools/copytrader/how-does-it-work/
Q6: How do I increase my investment?
A: The answer is not as straight foward as you might hope. You might think that if you added more funds to your copy of me that those funds would be redistributed across our current trades — this is not the case. Instead the money is added to your copy of me, and those funds are then used whenever I open new trades. My advice: if you are adding a large amount of funds e.g. 50%+ more, then you should stop and restart your copy, otherwise add the funds and they will slowly be picked up as I open new positions.
Note: if I increase my funds and you do not then you will not pick up any of the trades I open with those funds.
Q7: Why is my investment with you red? Grrrrr.
A: There could be many reasons, here are some of the most common -
- You’ve started to copy recently and you’ve just paid the spread. When you open a new copy, or open any new position, you will pay the spread and will temporarily (hopefully!) be in a small amount of red.
- You copied just before the market took a dip, and now we need to wait for a recovery. This is inevitable, no one can time the market perfectly but if you use a value-based investment strategy you will recover.
- You didn’t copy open trades, and now only have a few of my trades. The best thing here is to close your copy and re-open it
No matter the reason, over any 6-month period I have historically been in profit. Patience is key!
Q8: Why are my stats different from yours?
A: Oh there are so many reasons. Our stats will more-or-less reflect each other but can get out of sync for a number of reasons e.g.
- When you copy me initially you pay the spread at that point in time so you immediately take a small loss versus my portfolio.
- If I add more funds, you will need to add the corresponding percentage of funds in order to pick up future trades in the same proportion as I do.
- If you copy me with a very small amount (less than a few hundred dollars) you may not pick up my smaller trades i.e. if the trade would be less than $1 for you then EToro doesn’t open a position.
- You manually close trades, or your SL is hit.
Q9: Do I have to do anything once I’ve copied you? e.g. close trades manually
A: All you have to do is sit back and wait. Being patient is very, very hard but I highly encourage it. It’s like my boy Warren says:
Q10: Why are some of my copy position “pending/pending close”?
A: Investment positions can only be opened/closed when their market is open for trading. Some of my investments can only be opened/closed when the European market is open, whilst the bulk need the US market to be open i.e. if you open or close a copy at 10am GMT, some of your copy position will only open/close when the Nasdaq opens at 1.30pm GMT. All you need to do is wait.
Q11: What copy Stop Loss should I set?
A: The maximum drawdown I’ve seen in the past 12 months is ~11%. If there’s a crash in the next year it could be higher than this so leave some breathing space. I’d recommend 30% but do whatever you’re comfortable with.
Q12: What happens to my money when you close a trade in profit?
A: When you copy me with a certain amount of money, all of that money “sticks” with me. If I close a trade in profit, then your money goes back into a pool of cash that I can use to re-invest. This is how we really make money, compound interest!
Q13: I heard you like dem Cryptos, do you hold a portfolio outside of eToro?
A: You heard right! Below is a quick-and-dirty list of the coins in my portfolio (in order of holding size).
Q14: Why is such a big portion of the funds I have with you not invested?
A: This is usually because you’ve added a big portion of funds to your copy of me. These funds are not distributed amongst our current investments but instead wait for me to execute new trades. If you’d like to add a lot of new cash to the account it is probably better to stop and re-copy.