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 — $400
Good Investment — $2k to $4k
As an aside, I have much, much more than the above amounts in my account :)
Extra info: If you copy me with less than $400, you will not get my smaller trades — this is due to the way that eToro handles copy trading. In the eToro documentation there is a statement saying “The minimum amount for a copied trade is $1; trades below this amount will not be opened” e.g.
- If my account is $20k in total, and
- You copy me with $99, and
- I open a new position using $200 (1% of my account)
- The eToro system would reject opening an equivalent position since the copy would be $0.99 which is less than the $1 system threshold.
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.
It is normal to have some red after you initially begin your copy, but if it helps ease your mind my longest copies have more than 95% return.
Q3: How long should I copy for?
A: Some 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, and this is why:
Returns for the Oct 2017: 13.99%
Returns from May — Oct 2017: ~43.2%
Returns from Nov 2015 — Nov 2017: ~564.8%
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. However, you might find that I do close some of your new positions soon after you copy, and those might close in red. Don’t be alarmed by this, as all of the other positions you and I hold are still working and over time the benefit should outweigh the small, initial loss.
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 straightforward 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. The reason I advise this approach is that it could take weeks or months for all of your added funds to be put to work for a large deposit with the “add funds” approach, whereas a recopy puts almost everything to work immediately.
You can test what percentage you will re-pay in terms of the spread if you mimic this action in your virtual portfolio — at the time of writing this was ~0.4%.
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 2.30pm 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! You can read about my portfolio here.
Q14: Why is such a big portion of the funds I have with you not invested?
A: This is usually because:
- You’ve added funds to your copy of me after the original copy. These funds are not distributed amongst our current investments but instead wait for me to execute new trades (see Q6). If you’d like to add a lot of new cash to the account it is probably better to stop and re-copy, OR
- I’m holding a lot of cash at the moment in anticipation of a good buying opportunity. I usually have at least 5% of the account as cash in “normal” times, OR
- You didn’t copy open trades: https://www.etoro.com/en/social-trading-tools/copytrader/how-does-it-work/
- Some trades are still pending open, see Q10
- You haven’t copied with sufficient funds, see Q1
Q15: Do I need to do anything with the profits you generate in my copy of you?
A: Nope, not a thing! Your profits/losses proportionally reflect my profits/losses, and so when I re-invest profit then the same happens proportionally within your copy.