Making Money Online has never been easier!
Have you ever fancied yourself as a top wall street trader or simply want an easy way of making money online? Then this guide is for you. In this guide I will cover :
- Why I use eToro and my experience
- How to sign up to eToro
- A basic Investment Strategy for eToro
- Conclusion and final words of advice
Why profit from eToro?
I was talking with my father only a few days before writing this guide and he said something very interesting to me. He said that if he had the access to financial markets that we have today he would have loved to have a go at managing his own portfolio. Of course, when my father was younger to get involved in investing for the common person was incredibly difficult and not something everyone had time for. With the internet, as with a lot of things, investing in stocks and shares became something that anyone with some spare cash and time could get involved in. And nowadays it so much easier to make money online while watching TV in the comfort of your own home!
I have been using eToro since 2017 and have found the platform relatively easy to use and I love the social aspect. The main reason I use the eToro platform (Besides wanting to make money online) is due to its social trading aspect. people can discuss ideas, stocks and provide information that can really cut down on research time. Plus it has helped me shape a strategy which has generated over 50% profit in the last six months as you can see below!
More so, it is the copy people function that I think is most beneficial to new traders. With eToro you are able to pick a person (much like picking an investment bank) to back with money. You copy their trading activity and as they make real-time trades your account makes the exact same percentage copy of that trade. Not only can you see what trades were made but you can talk to your potential investment and ask why and how they trade. I believe the potential to learn from eToro while making money is HUGE and it is exactly what I have done!
How to Sign up to eToro
Signing up to eToro is quite easy and quick to do. I will run through all the steps so that you can have a play and get a feel for the site before you decide if Investing is right for you.
Please note, your capital is at risk and you MUST do your own due diligence!
A Basic Investment Strategy for trading on eToro
So I have enticed you so far to joining eToro you like the idea of managing your own portfolio learning from others and making money online! Hopefully, you have signed up and are ready to go, but now what? As Benjamin Franklin says “By failing to prepare, you are preparing to fail.” That’s why I will give you a very basic but effective strategy to start on eToro that allows you to make money but also allows you to make your own investments.
After you have signed up you will need only two things:
- $1000 (£800 as of 21/07/2019)
- Time to research copy traders and investments
Please note, your capital is at risk and you MUST do your own due diligence!
Gathering funds to Start your online money making Adventure!
I know that not everyone has $1000 (£800) to deposit in one go. I started in university and took advantage of my 0% student overdraft to get started on eToro. In no way do I recommend using your overdraft as you should NEVER use money you do not have.
However, you still need money to make money which is especially true if you want to make money online!
Instead, a better way is to invest over a period of time; perhaps $200 (£160) a month for 5 months. Regardless, the point is you need money to make money but more importantly the more money you have the more diversified your portfolio can be and the less risk of a bad investment wiping you out.
Who and what to Invest in
At this stage you should have the money ready, you have deposited on eToro and can see the $1000 ready to trade. So now we have to do a little thinking and decide on what to invest in.
The first $800 on eToro
The first $800 should be used to pick FOUR experienced traders. The minimum you can invest in a copy trade is $200 and of course, you need to diversify by choosing various traders hence the $800! If you are investing over a longer period (ie the $200 a month) then for the first four months you will pick your traders to copy!
How should you evaluate the copy traders on eToro?
You should be looking to diversify your portfolio by copying numerous people. I suggest copying four traders, you should choose 2 low risk, one medium risk and one high-risk trader. To do this involves using the eToro platform to refine and pick traders that match your requirements! Luckily I have created this guide for you to follow so you can start making money online straight away!
Firstly, you must click on the Copy People tab on the left-hand side and it should show a similar screen to what you can see below.
So next you will want to click the big blue go button (don’t worry about setting any criteria yet). I screen should pop up like the one below.
As you can see on the basic default search there are 341 search results. Now you want to click the X mark right of the blue Last 12M and get rid of all the default options till it is clear and looks like the picture below.
As you can see now that all the filters are cleared there are over 400,000 people you could potentially copy! This is obviously far too many and so we now need to create our own criteria.
You Got to Filter to the High-Quality traders!
The first step is that all traders you choose should be verified and part of the popular investor program (ie they should have a blue, orange, red or green badge by their picture!). The badge indicates that their trading style is operating under eToros minimum guidelines otherwise they will be pulled from the popular investor program. This does not mean they are a good trader! Just that they operate in a way that is considered more responsible.
To do this you will need to click on the button that says FILTER. It should pop up with a screen like the one below. As you can see there are various options and restriction you can put on. However, at the moment, we want to click on the one that says STATUS.
This will open a screen you can see below that has two options Verified and Popular Investor. You will want to select both options and click apply.
After you click apply you will see that the search results have been reduced to a much more manageable number. If you look at the picture below you will also see that next to the blue Last 12M button your last two restrictions are in place. At this point, 700 people is still way too many to analyse. So we will need to restrict further.
Next, you will click the Performance tab and then click on Return.
After you have clicked on return you will see an option screen open with low, medium and high. Below that is a part that says Custom. In the bit that says Minimum type 10. This will then filter anyone who has less than 10% Return. Anything above 10% is beating the market and we want a return that beats the market! It should look like the picture below.
Next, you will want to click Apply. As you can see below the results have reduced quite significantly.
You will need to keep refining to find your perfect traders!
There is of course still a little more basic refining we can do. Next, you will want to click on the tab that says Risk and click on Risk Score. The Risk Score is eToros way of measuring portfolio risk and is based on several factors all to do with how the portfolio is organised. In general, the Higher the Risk score the higher the return should be!
It should open a screen like the one below. You will want to select Medium risk as this encompasses a nice range of risk from lower risk at 3 to higher risk at 6. Then click apply.
As you can see below that has now filtered the results to 148 people. This is a more manageable amount to do some more in-depth analysis. The next step is what I would argue is one of the MOST important factors when selecting a trader.
What to Check before Copying ANYONE on eToro.
So you should know how to copy people and have narrowed the search results down to a few hundred at most. (you can narrow it down further even further by adjusting risk and return!) Now you need to choose between all the people!
The first thing you should check is the level of REALISED PROFIT which is the profit that has been generated from closed trades (You can learn more about Realised and Unrealised Profit here). Essentially, if there is a high level of realised profit then the trader has made good trades in the past and has closed those traders at a profit. Simply put a high realised profit backs up what a trader is saying and is a good indicator of performance.
Firstly, you will click on the trader’s profile and then click on the portfolio tab as shown below.
Next, you will click on the blue Portfolio drop-down menu directly below the trader’s name and switch it to History setting as I have done below. As you can see I have a realised profit of 47% which means I have closed a lot of good trades in the last year!
As a comparison, I want to show you the importance of not just copying the most popular investors but of doing your research and asking questions! Indeed, some of the most popular investors have negative realised profits meaning they closed various trades at a loss! I am not saying that these are bad traders nor should realise profit be the only measure, but it is something to consider when picking your traders.
Evaluating a Traders Style
As earlier stated this strategy is based upon picking four traders to copy and profiting from them. The next step is ensuring you don’t pick four traders doing the same thing or that beats the purpose of diversifying! Most traders will tell you how they trader in their BIO ( you can check mine out below.) which you get to by looking at the trader’s Feed.
However, you may want to check on the STATS tab to see more information about the trader!
So that’s an easy Strategy
So that’s pretty much the basic strategy to get you off to a really good start on eToro. The next steps would be to add more funds over time and to diversify your portfolio. eToro is a fantastic platform for both the social aspect and a great way to make money online.
If you haven’t done so you can check me out on eToro here and signup below! Or feel free to check around my website! The homepage is HERE!
Quick words of Advice
- BE PATIENT, Traders just like the market can experience rough patches this does not make them a bad trader!
- eToro should be part of the plan, not the whole plan!
- Do your research! Unprofitable traders can change strategy and become profitable if they start a good new strategy and vice versa.
- Don’t rush into self-trading, learn from others read and practice before trading yourself!
- BE PATIENT, I see lots of traders copying for a month or less, then leaving at a loss! you are just wasting your money if you do this!
- Making money online has its ups and downs!
Other Useful Links for learning
- eToro Trading Academy
- Market information: The Motley Fool, The Economist, The Financial Times, Zero Hedge
Disclaimer: eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFD assets.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% 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.
Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework.
This guide is intended for educational purposes only and should not be considered as investment advice. The author and publisher are not liable for any losses or damages you may incur as a result of you following the advice given on this page. The etoro.com layout and content may change since this content was published.