The social network to make money
How does social trading work?
The eToro OpenBook is a live database
of all the trading activity carried out through the eToro platform. By being a
member of the OpenBook network you can see what top profiting traders are
doing, follow their trades and even them. That means that so when one trader
makes a profitable trade, everyone else can benefit by learning from it or
simply by copying the same trade!
OpenBook’s CopyTrader enables you
to take the idea of shared trading information even further, by setting your
account to automatically copy other traders. What this means is that a novice
trader can literally trade like a pro within a matter of seconds by simply
copying one of eToro’s guru traders. With the help of eToro CopyTrader you can
effectively compile a people-based trading portfolio, rather than a financial instrument
portfolio, and manage the traders you copy according to their results. With the introduction of “CopyTrader” it became clear that some
traders would become the “Gurus” of the social trading community, and thus
eToro devised a way to reward traders with numerous followers through the Guru program.The guru traders can get an extra income by
accumulating a large following of copiers and getting some kickback from their
trading activity.
How do I start copy trading?
Copy trading is in fact very different from regular
financial trading in that it is so much easier than regular trading. Unlike the
financial markets, profitable traders are easier to spot, monitor and manage
simply because they are reliable. This is because consistently profitable
traders already do the job of minimizing market risk for you, so you are less
exposed to risk from the get go.
When you start copy trading, finding the right traders to
copy is key. Luckily, eToro OpenBook provides you with a number of ways to
choose the right traders for you. First and foremost, you have the OpenBook
rankings, including a “Guru Finder” feature. These rankings rate traders based their trading
performance over a given time period, according to the parameter of your choice. It may seem wise to look for traders with the
highest win percentage, however while this figure shows the ability of the
trader to analyze the market it doesn’t reflect his/her ability to capitalize
on the market movement, and therefore you should also make sure to look at the
gains figure.
Once you figure out which traders you want to copy, all you
have to do is click on the “Copy Trader” button and decide which percentage of
your account you want to dedicate to copying each trader.
I agreed that it is always best to start copying a trader
with only a small percentage of your margin (around 5%). Once the trader proves
that he/she can consistently deliver, you can increase your investment.