Currently, the purchase and sale of instruments has become a matter of few clicks of the mouse. With similar ease, you can start copying other people’s positions. However, it is worth to remember the security of our resources. Here are five easy social trading rules that minimise the risk of loss during the copying of signals from other investors.
Treat the provider as any other investment
The only difference between social trading and regular trading is that instead of choosing between AUD / USD and USD / CAD you can choose between the PopularInvestor34 and EuroMaster99.
Decide which signal providers to suit your marketing strategy based on the analysis of their profiles. Check out what they write on eToro is and what they are most interested in. Start tracking them on your virtual account and when the effects are satisfactory, go to the actual document.
Search for the seller
For your convenience eToro introduced a search engine. Go to the tab ”People” and select the criteria you are interested in.
The most important questions you need to answer is:
- What kind of investor am I?
- I prefer to invest in the long or the short term?
- Which markets I want to avoid?
Pay attention to the level of risk!
eToro has introduced a risk indicator for each signal provider. It measures the value of marknadsexponeringen and the volatility in the merchant’s portfolio. Riskindikatorn is the first thing that should be noted when you are looking after your signal provider.
Check current and history at the level of riskindikatorn. Remember – the higher its value the higher is the probability of loss when investing in the specified provider. The higher the risk is however compensated by a higher gain on success.
Diversification is the key
Build up your portfolio like other traders who make money in different asset classes at different times on the market.
Rely on your provider
The implementation of a thorough analysis of the performance of a certain signal provider does not guarantee profits, but maximizes the likelihood of achieving them. Rely on your analysis and the results from the history of the trader that you trust.