Matt Williams
The numbers are in for retail investors copytrading on eToro last year – they made a 30.4% return on investment (ROI) by copying pro traders.
That’s the average performance of the top 50 most copied traders on the site in 2021 – some did better, some worse. To hedge their bets some trading enthusiasts copytrade several of the professionals at a time – or ‘popular investors’ as they’re known on the eToro platform. You’re not limited to just one.
They’re paid side income by eToro as an incentive to attract people to the site to copy them – and those doing the copy trading pay no management fees or other hidden fees to use the feature. Only the trading fees they would’ve paid anyway are deducted.
eToro Copy Trading Explained
Many of our readers ask is eToro copy trading worth it and if it’s profitable – they’re also common questions on Quora and Reddit cryptocurrency and trading subs (you can also copy trade in other financial markets like stocks, forex, or commodities).
There are also many eToro copy trading reviews on Youtube from users who share their experiences and report on who they think are the best traders to copy trade on eToro in a given month.
We’ve been following the popular investor program on eToro.com for some years ourselves as part of our series on passive income and making money online.
In 2020, we noticed eToro copy trading returned an 83.7% yearly profit – even better than 2021. If we take the average of the two years, perhaps we can expect 57% profits in 2022 – although past performance is not an indication of future results and risk is involved.
How does Copy Trading Work on eToro?
So how does copy trading work eToro wise? Once you’ve opened an account via the official website you’ll quickly see it’s different to other crypto platforms.
Unlike crypto exchanges like Binance or Coinbase, everyone gets their own profile, news feed and wall, similar to Facebook – it works as a social trading platform as well as a place to buy and trade crypto.
So if you search for a coin (or stock) by its ticker or ‘cashtag’ – for example $btc for Bitcoin – you’ll find experienced traders who give their thoughts on the markets and the current price action (PA), and post charts with technical analysis (TA). If they’re part of the popular investor program, you can also copy trade them. Or several people.
So whatever funds you set aside to copy trade with – either part of all of your portfolio, it’s up to you – will be used to automatically replicate their swing trades – their buys, sells, take profit orders, stoploss, leverage if they are CFD trading, etc.
In terms of how to enable copy trading on eToro simply add a trader to your watchlist and click the ‘copy’ button by their name. Also visit the CopyTrader page on the eToro website where some of the best traders to copy trade are ranked in terms of their profit gains over the last 12 months and risk score.
This is a relatively unique feature to eToro, although other crypto platforms are beginning to follow suit. Bybit automated copy trading is launching in 2022.
eToro Copy Trading Fees
There are no additional fees to pay, you just pay the normal spreads that you would if you were trading by yourself instead of using the CopyTrader feature.
There’s a minimum deposit though, i.e. minimum copytrading capital, of $200. And each individual trade has a minimum amount of $1. Trades are executed instantly in real time.
If you’re approved as a popular investor, you can be paid to trade and allow others copy trade you. Find out more on the eToro website.
eToro Copy Trading Review – The Verdict
Compared to parking your money in a savings account and earning 0.05% interest with a bank, copy trading on eToro allows you to put your funds to work. It’s a higher APY than most crypto staking platforms.
It’s also a higher interest rate than offered by the best crypto interest accounts. Most copy trading reviews on sites like Reddit are positive, and by all accounts copy trading on eToro works and it’s one of the best automated trading platforms.
What offers peace of mind is eToro is licensed and regulated internationally by the FCA, CySEC and ASIC. Investors in the USA are accepted, and copy trading is legal.
Opening an eToro account is free and you can also trade by yourself with however much of your portfolio you wish, or hold as a long-term investment, or earn staking rewards on Ethereum (ETH), Cardano (ADA) or Tron (TRX). The CopyTrader feature is optional and you can stop any time and take profit. There’s also a demo account to paper trade and practice on.
So is eToro copy trading worth it? We rate it a good way to grow your wealth, generate passive income, and learn to trade as a beginner by first copying others’ trading strategy. We’ll be curious to see how high the profit margins are in 2022.
Just remember it’s not 100% guaranteed to be profitable – it’s not risk free so only invest what you can afford to lose, or funds that you can put aside and wait to recover in value if there is another multi-year bear market in crypto like 2018 – 2020.
Related
- eToro Launch Copy Portfolio for DAO Projects
- 13 Best Crypto Exchanges in US – Find a Crypto Trading Platform
- Best DAO Crypto Projects – What is a DAO?
eToro CopyTrader™ Tool
- Buy Crypto & Copy Trade Professionals
- Average 30.4% ROI in 2021
- Average 83.7% ROI in 2020
- Copy a DeFi or Metaverse Portfolio
This article was written for Business 2 Community by Matt Williams.
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