eToro is a copy trading website. Basically how it works is once you have signed up, you can copy exactly what the traders/investors you copy buy and sell. For example, if the trader buys X amount of Tesla stock, your will also copy that X amount roughly proportionally to the amount of cash you allocate to the trader.
Traders are all graded based on their risk profile with 5 as high risk and 1 as low risk. I first heard about eToro from a training classes where the instructor boasted about buying Amazon and Tesla shares from this platform. eToro democratizes fund management also in a sense anyone in the world on the eToro platform can be a fund manager now, anybody can copy anybody.
On eToro you can either use copy trading or DIY. Copy trade is basically you select traders to follow, whatever they buy you will copy them. DIY is you trade it yourself, for those with very good performance, other people can follow the DIYers. There's a huge multitude of traders in eToro, forex, commodities, crypto currencies.
On eToro you can either use copy trading or DIY. Copy trade is basically you select traders to follow, whatever they buy you will copy them. DIY is you trade it yourself, for those with very good performance, other people can follow the DIYers. There's a huge multitude of traders in eToro, forex, commodities, crypto currencies.
My verdict is it is not as easy to do copy trading. So far, I'm still is a losing position despite playing very safe by only copying traders who have a good profitable track record. I first joined this platform mainly to trade crypto currencies during the crypto boom. I used this platform to copy traders who had crypto currencies in their portfolio.
After the fall of cryptocurrencies, I switch to copy traders who were value investors but it didn't quite work out for me as I felt that the value investors that I copied were over diversified. I have now switched over to copy traders who do day trading or week trading using commodities and currencies. These traders hold their positions from 1 day to 1 week only, 60% of the time they are not trading also. So far this strategy working ok, starting from month of Jan 2019, I've reduced my losses and trading performance is quite stable.
For now I am only copy trading 2 swing traders. kela leo is a trader from China who does commodities and currency trading while fifty-five is a German who does only currency trading.
A few reasons why I'm holding on to these guys :
- Hold not more than 5 trades at a single time
- Risk profile of not more than 3 (kela leo - 3, fifty-five -2)
- Holding trades less than 1 month
This setup is not profitable yet and is not for everyone. I'm only using this setup because I personally do not do day trading and swing trading so I'm using this platform to copy trade as if I'm actually doing day trade and swing trades.
The question probably arises is why use eToro when there are already so many investment platforms. I believe 1 thing other non copy trading investment platforms can't replicate is the trader instinct/luck element. I am basically using eToro to compliment my investing and trading style. As I tend to be a more conservative and fundamental investor, the people that I copy on eToro has completely opposite investing and trading styles than me. I choose day and swing traders who have a strong risk control in their framework.
There's a few Malaysians on eToro and also a Facebook Group here. I've look at their stats and it's not pretty. Generally even if they are making money they are only slightly profitable. The 2 more famous etoro traders are Rashdan Fitri and Spark Liang aka 张开亮, both of them have strong followings in the Facebook Groups. Rashdan Fitri trades mostly commodities and currency while Spark Liang is more of a value/fundamental trader.
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| Malaysian on eToro - Rashdan Fitri |
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| Malaysian on eToro - Spark Liang |
Updates 20191129
I think I will start following Spark Liang as his portfolio seems to be quite consistent.
Updates 20200724
I just found out Bursa Malaysia also got copy trading feature via their specialized app called Bursa Marketplace.
Oh and in eToro now you can do search based on your countryman. Eg Malaysia.
❓ Common Queries and Questions on Etoro
How to withdraw funds from eToro to Malaysia ?
At the moment most cost efficient way to move money back is to transfer to BigPay debit card. BigPay is an ewallet solution in Malaysia which has Tune Holdings, owners of Airasia as the primary shareholders. There is a USD 5 processing fee for funds withdrawal.
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Disclaimer 1 : Bank Negara Malaysia has reiterated that eToro is not an authorized entity to conduct business in Malaysia. This is because eToro's business is online and it does not register itself in Malaysia. Investors in Malaysia will not have similar protection if eToro fails. This company eToro is similar as Interactive Brokers in US where I know Malaysians who signed up with this online broker to buy and sell US stocks, as Interactive Brokers does not have an office in Malaysia or registered in Malaysia, Bank Negara Malaysia also does not recognize this broker as a legal broker in Malaysia. The info on this can be found here.
Disclaimer 2: Use the app at your own risk. A lot of local banks require additional verification for transfers to eToro. Transfers are done using credit card. So far only HSBC, Citibank and Standard Chartered allows fund transfers. Copy trading is not for everyone nor a sure win. Chances of making a profit is quite slim as not all traders copied got good consistency despite being a top trader in eToro.