eToro released its copy trading service named 'CopyTrader' in 2010. 'CopyTrader' is a tool that allows you to follow and copy the activity of your chosen traders on the eToro platform.
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eToro copy trading
What is eToro's CopyTrader?
Copy trading's not a new thing.
Mirror trading emerged in the 2000s to offer a solution to investors who didn't have enough time to keep up with market developments regardless whether they were experienced traders or beginners.
Copying other people's trades became extremely popular in the late 2010s among investors through the rise of newcomer financial services and the gamification of trading.
In this article, we dive a little deeper to understand how eToro's copy trading solution works, what the difference between copy trading and mirror trading is and what the first steps are on eToro's platform to join the service.
eToro copy trading
eToro copy trading explained
The eToro copy trading service, CopyTrader is one of the core services that sets eToro apart from other brokers. The idea is simple: there is a selection of traders on the site and each has their own portfolio. If you fancy someone's strategy, you can copy their investments instantly. If the chosen trader makes a trade, he/she will make the same trade on your behalf as well, with your own capital, on your own account.
Phrasing it with eToro's lingo, in this case, the copied trades charge the copier's account, aka your account.
Who can access CopyTrader?
Every trading account created at eToro can access CopyTrader.
Once you piock a trader you want to copy, it takes only a click to fully copy their activities. The CopyTrader service is free of charge, you don't have to pay any service or management fees.
Of course, this service is not "real" fund management, but rather a social investment network. It could work for you if you are not an experienced trader and you are on the lookout for the ideas of popular investors on any financial market. A social investment network involves plenty of risks because as a copier, you don't know anything about the capabilities and risk aversion techniques of the counterparty you are copying.
Is there a difference between a 'copy trading' and a 'mirror trading' platform?
In eToro's case, yes. eToro's copy trading platform is a mirror trading platform extended with social trading components and elements. The name 'CopyTrader' is also a brand on its own.
Think of a platform that gives you the ability to react with comments or likes to someone's trading history or the ability to see a trader's performance in real-time as it happens. In short, this is the experience eToro's copy trading service aims for.
eToro's social trading platform is a refined and renewed version of what we call 'mirror trading'. Mirror trading itself refers to the act of copying one (or more) traders active on a platform. eToro's CopyTrader takes this model a step further - in addittion to the general copy trading services, eToro extends this service to include many social media-like features. An investor can filter traders by nationality, performance, and search for the most suitable strategy for their needs.
eToro copy trading
How to access CopyTrader
CopyTrader can be found under the 'Discover' menu on your home page.
After logging in, click on the 'Discover' menu on the left side of the screen
Scroll down to the middle of the page. You'll see that CopyTrader has its own row on the page, with the profile pictures of different traders
On the right side of the screen, click on the 'View all' button
And voilà, you have arrived at CopyTrader
Past performance is not an indication of future results.
Filters & selection
On CopyTrader's main page, you can filter traders by their nationality, markets they invest in, their latest gains and the time horizon of their trades. Of course, past performance does not indicate how future results will turn out.
Traders' portfolios are all public information. There are also risk scores assigned to every trader. It is a numeric value ranging from 0-10 based on the average movements (volatility) of the instruments included in the their portfolios. The higher the risk score is, the more volatile the portfolio is.
Is there a minimum/maximum deposit amount? Are there any fees?
Yes. The minimum amount you must invest is $200, and the maximum is $2,000,000. Here's a list of the terms of using CopyTrader:
The minimum amount to invest in a trader is $200.
The maximum number of traders you can copy simultaneously is 100.
The maximum amount you can invest while copying a trader is $2,000,000.
The minimum amount for a copied trade is $1; trades below this amount will not be opened.
If you close a copied trade manually, the funds from this position will be credited back to your copy balance (the amount allocated to copy that person that is not invested in open positions).
eToro copy trading
Is it good to copy trade on eToro?
This is not an easy question. For those who don't have time to keep up to date about markets movements, following a trader with a well-performing portfolio may be a great time saver. However, we don't know much about the background of traders on the eToro platform, so it's really hard to assess the risks.
Do eToro investors get paid?
Yes; there's a program called Popular Investor, which is open to all eToro users. If a particular trader is being copied by many other clients, he/she may potentially generate a significant level of income on an annual basis if they opt into the program. There are four levels of being a Popular Investor, each with its own requirements. Requirements include determined equity level, AUC, verified copiers, and trading history.
Does eToro copy trading work?
The service itself on the technical level works well. However, it is up to the individual investor to decide, whether the risks are worth the time saved. If you have any experience using copy trading solutions, don't hesitate to tell us!
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81.2% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.
Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.
Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.
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