Today I want to introduce you to an interesting investment idea called Social Trading. I have been invested in eToro now for a few months, which is a Social Trading platform. Finally I have the time to introduce it to you in more detail, after testing it for a while.
I will explain Social Trading and how to invest in it in more detail later, but to summarize it: You are copying trades of other people. This means, you do not have to manually open and close trades yourself, but you passively copy the actions of other people. This has 2 major benefits:
- You can diversify your portfolio by copying other people with more experience and knowledge in other areas.
- Some markets are open 24 / 7, e.g. Cryptocurrencies. But you will not be able to stay awake 24 / 7, therefore you can make use of a global community.
So keep reading, if this is appealing to you!
Or just dive directly into it using my referral link: http://partners.etoro.com/A65412_TClick.aspx
As a side note: You do not have to start invest money right away. Just start with a demo account, get familiar with the system and see how it works for yourself!
What is Social Trading?
I assume right here that you already know what trading is, so let me introduce you to the definition of it on eToro: “Social trading is the utilization of user-generated content, and crowd-wisdom, for the act of online trading.”. So, what does that mean for you? First of all, it means that you are not alone. Instead of trying to find a way into trading and earning money with it on your own, you can benefit of a variety of community-based tools. You can gain information, knowledge and ultimately make smarter trading (and investing) decisions.
For example, eToro allows it’s users to see other people’s portfolios so you can see what they are trading. Also a newsfeed, similar to Facebook, exists where there is constantly news related to specific stocks, commodities, cryptocurrencies, ETFs, indices or currencies. You can see what will be written about a stock you are interested in or you can seek experienced traders and follow them to see what they write about specific investments.
The most interesting part of Social Trading though, is the ability to copy trades from other people. So instead of manually watching the charts non-stop to open and close a position at the right time, you leave this task to someone with more time, experience and / or knowledge. By copying a another person, you duplicate that person’s portfolio and investment decisions!
So if you are interested in trading and investing in different ares without actually trade manually, eToro and Social Trading might be the perfect fit for you. Use the following affiliate banner to dive deeper and support me:
Feel free to watch their promotion video to get a quick overview:
How to invest?
You have basically 3 different investment options on eToro:
- You are already an experienced trader and open + close trades as you see fit – as you would do with all other brokers as well.
- You use the CopyFund functionality. Which allows you to invest in a fund and hope that the stocks, commodities or whatever the content of the fund is, goes up.
- Or, the third option, you are going to use the Copy Trade functionality, which allows you to duplicate all the actions (opening AND closing trades) of another person.
I am going to focus here on the third option as I see the most benefit in copying trades. Furthermore it likely needs most explanation.
Let’s assume you invested some money or you just try out the functionality with the demo account mode, that eToro offers.
Firstly, you select Copy People on the left side and select one person you think is worth copying.
Now you can see the big Copy button on the top right. Select it and choose the amount you want to invest.
Be aware of the checkbox at the bottom stating “Copy Open Trades”. Check their profile or ask the person if that is beneficial or not. It really depends on the person you want to copy.
So, as you can see on the screenshot, that person was very successful in the past. Obviously that does not necessarily mean that this person will be successful in the future. But being successful for multiple years is at least an indicator. So what would that mean if you would have invested 10,000 $?
See for yourself:
If you would have invested 10,000 $ and copied his trades, you easily would have 30,000 $ by now! Tripling your investment does not sound too bad, does it?
Yes, you see that correctly. That person would have made over 300,000 $ out of your 10,000 $ investment. That is a multiplier of 30!
I know what you think now. Is this really possible? Of course it is. Successful traders live from their earnings and they often live quite well, and eToro allows you to make use of that.
I am going to write another blog post about which people to follow and what to look at, but just be aware: The higher the profits, the higher the risk. It can also lead to a lot of losses!
Deposits & Payouts
In case you decide to invest in eToro, you have multiple ways to invest. You can use whatever regular payment option you like to use: Credit Card, PayPal, Wire Transfer etc., so they make it quite easy for you.
The minimum deposit amount to invest varies between 50 $ and 1,000 $. It depends on the country you live in.
Payouts are processed within 1 business day and by default will be sent to the payment option you used for your deposit.
Side note: The time taken to receive your payment may vary depending on the payment provider involved.
My initial investment
Started: 2017 – 03 – 16
After adding more funds in the months afterwards – around 15,000 $ – my current equity is 25,000 $:
This will be updated regularly in my weekly blog posts – follow me and make sure to check regularly!
Invest with Max!
If you are now interested to invest in eToro and Social Trading, please do not forget the most important rule of ’em all:
NEVER INVEST MONEY YOU CANNOT AFFORD TO LOSE!
In case you want to invest, feel free to use the following affiliate banner to Invest with Max!
Make sure to follow me here and on social media to stay up to date:
Any questions? Always feel free to contact me on social media or leave your questions and thoughts in the comments.
I am also planning a Facebook group, with the following goals:
- Mentoring and guidance
- More insights into online investments
- Discussion about online investments
- Creating strategies together and discuss them thoroughly
- Interacting with each other: Asking questions + receiving answers asap.
- More profitable investments!
So if you are interested in that, just use my referral link for now and I will invite you as soon as the group is live!
Referral link: http://partners.etoro.com/A65412_TClick.aspx
Forex and CFD’s are leveraged products that carry a high degree of risk to your capital. It is possible to lose more than your initial investment. Leveraged trading may not be suitable for all investors, so please ensure you fully understand the risk involved and seek independent advice if necessary.