Copytrading: What can you learn from top traders on eToro?
Traders reveal their biggest wins.... and their biggest losses, and the lessons the markets have taught them.
If you’re stepping up your investing in 2023, you might be looking to learn lessons from those who’ve been doing it for longer. What do they do differently? Do they all spend hours every day looking at charts on multiple monitors, ready to make a trade at the drop of a hat?
For some, that’s true, but others trade on the commute or in their spare time. On the investing platform eToro, you’ll see both full-time and part-time investors among the “most copied” in its renowned CopyTrader programme, which lets novices shadow the moves of more experienced investors. It’s worth remembering that even top investors have their downfalls, though. And since it’s useful to hear about these, we asked some top traders to share both wins and regrets.
Cryptoasset investing is highly volatile and unregulated in some EU countries and the UK. No consumer protection. Tax on profits may apply. Your capital is at risk.
Copy Trading does not amount to investment advice. Your investments’ value may go up or down. Your capital is at risk.
What is copy trading?
Several platforms have a copy-trading feature that allows you to shadow the trades of other investors automatically. Copy trading was made popular with eToro’s CopyTrader feature. This allows you to view popular investors’ profiles to see their stats, holdings and performance. Copied traders can create posts and videos to discuss stocks and engage with those copying them.
To get started, you decide how much to invest, select your preferred trader and hit “Copy”. The funds will be allocated to the stocks in the trader’s portfolio and any movements the trader makes will be automatically copied.
Meet the traders
Name: Jorden Boer
Strategy: Trading the short-, medium-, and long-term simultaneously.
Name: Ingvar Rueckemann
Strategy: Long-term strategy based on undervalued stocks from value and growth.
Name: Neza Molk
Strategy: Investing in companies with good financial health and that offer a product or service that solves problems.
Q: How long have you been investing?
I have been investing since 2002 after starting as a market maker (options trader) on the Amsterdam Stock Exchange in 2000.
I have been curious about the financial markets since I was a teenager, and occasionally “bought” stocks via virtual portfolios. Of course that’s not the same thing as investing real money — I started about 8 years ago, which was really the first time I felt that I had sufficient capital that I could use for investing and afford to lose if it wouldn’t go well.
I bought my first stock when I was 20, a pharmaceutical company. Just before the coronavirus crisis started, I opened a virtual account on eToro, realised how easy it is and fell in love with the possibilities it offers.
Do demo accounts help you get better at trading?
Demo accounts are a great way to learn more about investing, no matter how much experience you’ve got. If you’re just starting to invest, it gives you a chance to understand how trades are made, how the stock market moves and the basics of trading. More experienced investors can get more insight into analysis tools and signals, as well as learn about different types of assets.
Lots of platforms have free demo accounts available that mimic real-life trading with virtual money. These are risk free — even if you run out of money, you’re able to reset it and start again.
Q: Why did you start investing?
I had personally not built up a pension, so it was imperative that I took care of my financial future by becoming financially independent myself.
The main goal was (and is) to build wealth over time by putting surplus cash to good use.
For me the stock market always seemed like the better option for investing compared to other products such as savings accounts, insurances and pension products.
I find the corporate world fascinating and personally take great joy in seeing markets and single companies develop over time.
I have always been concerned about my money and savings. When I got my first student job I realised how much effort you must put in to earn a few bucks. I didn’t want to spend it right away and later realised that if I don’t do anything with my savings, money in the bank account will slowly lose its value. I started to look at possible solutions, and investing was the best option for me.
What is compounding?
Compounding is the process of receiving interest from the interest you’ve already received. It’s also sometimes referred to as growth on growth.
Essentially, you’ve got the opportunity for higher growth if you keep your gains and dividends invested as you go. This means that even if you achieve the same rate of growth each year you’d make more money each year as the gains you’ve made would be able to grow, too.
For example, if you invest £1,000 and it grows by 10%, you’ll have gained £100. If you leave your gains in your account and it grows 10% the following year as well, you would gain £110. If you decided to invest £1,000 for 10 years and it gained 10% each year, you’d have £2,000 at the end if you withdraw the interest you receive each year. If you leave your gains invested, you’d have £2,594. Of course if you don’t withdraw your gains, they’re subject to the same risks as your original investment.
Q: How much time do you dedicate to your investment portfolio daily?
I’m currently a full-time eToro Popular Investor, dividing my time between following the markets, buying or selling stocks and studying for Level 4 Wealth and Investment Management which will help me become an eToro Elite Pro Popular Investor.
Find out more about the different types of Popular Investor
I am a full time investor, so I spend most of the day monitoring and analysing the markets. That usually means absorbing and sorting through a lot of different information, deciding what’s relevant and how it might impact single stocks and my strategy. That’s a full-time job, but luckily I really enjoy what I do.
After work in the laboratory, I dedicate several hours a day to my portfolio. I don’t make changes to my portfolio every day, but I research and analyse different companies, macroeconomic events, and investing news. I also listen to several different podcasts and YouTube channels. I like to read books which are more focused on one topic and contain a lot of useful information. During each earnings season I regularly analyse earnings reports, which requires a lot of reading time.
How to read an earnings report
Earnings reports are packed with jargon, so it can be difficult to find the pieces of information that are useful to you. Here’s what you’ll find included in the report:
- Income statement. This tells you the company’s revenue and expenses over the period, as well as gains and losses of assets.
- Balance sheet. The balance sheet is a statement of a company’s assets, liabilities and shareholder equity. It gives you a good indication of what the company owns and what it owes at one specific time.
- Cashflow statement. This gives information about the inflow of cash to a company from its operations, investments and financing.
- A brief discussion of the results. This is typically from high-level management.
- Information about any expected market risks. This would be anything that might cause the company to make losses of some kind.
Q: What are your thoughts on your current portfolio performance?
2022 performance: 34.06%
I hope to repeat this year’s performance next year which will be quite a challenge to achieve as there was a great opportunity to go short this year which I do not expect will happen again in 2023.
2022 performance: 8.07%
I am very satisfied with the performance of my portfolio on eToro this year. The strategy has performed very well in a tough market environment, and has delivered returns this year more than 20% above the S&P 500.
2022 performance: -9.08%
If we take into consideration the major macroeconomic challenges that we face right now, I would say my portfolio is doing great. War, inflation, coronavirus, supply chain issues, and the portfolio will end the year around -8 to -10%.
I think that it could be a lot worse in the stock markets right now. But the good thing is that we haven’t seen panic selling yet, which is why I don’t think the year will end so badly. The inflation battle is not over yet, and while the FED is trying to slow inflation in the US by hiking interest rates, it could cause problems elsewhere.
Q: What’s your next move?
For the coming months I will remain cautious of further declines in the market although I expect a lot of sidewards movement meaning there will be plenty of opportunities to buy low and sell high in order to beat the markets. I expect markets to go back up gradually next year.
2022 has shown everyone that energy will be a major topic for many years to come.
I believe there might be opportunities coming up in areas such as technology. In my opinion that sector has been very expensive for many years – with the correction/bear market in 2022 (possibly extending into 2023), some parts of that sector might be getting attractive again.
I don’t take fast investment decisions. I am looking forward to seeing what will happen to gold and silver, which have been stagnant for the past 2 years, but in recent months we have seen some big movement in these 2 precious metals. I am also looking into the technology, which has been beaten down [in 2022], but I think that we have a great opportunity to buy when the prices are low. Besides the energy sector, big pharma companies that had a pretty good year, like Amgen and Merck, are quite inflation resilient.
Q: What’s an investment that you made that you’re most proud of?
I’m most proud of my decision to start shorting the markets in December 2021 when the economy seemed to be going down after inflation, interest rates, war in Ukraine, oil prices and tech stocks were all set to contribute to a major decline of the markets.
In the context of investments and trades in 2022, a very interesting one is my investment in Lufthansa. I am proud of that one because I was able to challenge my own opinion.
During the pandemic I was convinced that Lufthansa in particular would struggle financially for years to come due to the amount of loans they had to take up to survive the pandemic. However, the company was surprisingly quick in paying back the government loans and did so already by the end of 2021. Despite my previous (negative) conviction, I decided to crunch the numbers and dig deeper into the company documents, and concluded that circumstances had indeed changed. The company was in a better condition than I had thought, long-term prospects were in fact quite bright.
So, the reason why I am proud is because I feel like I was able to question my prior conviction and look at the facts, which can be a hard thing to do for investors. Based on the facts, my conviction swung in the other direction, I was even adding to that position when the macroeconomic prospects seemed weaker (eg in early March 2022 when the share price dropped strongly upon sharply higher oil prices and the potential impact of the war in Ukraine on global business and travel).
So far this particular investment has worked out nicely.
Nothing makes me more proud than my investment in knowledge. I could list my accomplishments in numbers, but none of them would exist if I hadn’t consistently invested my time and money in learning.
Q: What’s your biggest trading mistake?
My biggest trading mistake was not to buy stocks after the March 2020 COVID crash as I had already stepped out of the markets at that point fearing further declines. What I learned from it was that next time I will invest after substantial market downturns as all markets will (eventually) recover.
With the benefit of hindsight, I feel that I was holding too much cash in 2021 (at times 40% of the portfolio). At the time that was mainly to safeguard against market downturns in an uncertain mid-pandemic environment and to potentially take advantage of buying opportunities if the market pulled back. While that reduced the risk in the portfolio in 2021, this approach also cost some performance during that year because the market was going up.
I think most of the time mistakes are my own bias and wrong estimates of future cash flows. Fortunately I haven’t made any big trading mistakes yet, but investments can take years to prove to be mistakes.
Q: What have you learned from your investing mistakes?
The most important thing I have learned is not to try and time the markets, but instead be invested as this will always result in profits in the long term. However, this is dependent on stock selection.
The good old adage “time in the market beats timing the market” is certainly true for a long-term investor. Instead of trying to find the optimal entry point it’s better to be invested constantly with a consistent strategy.
I have learned to trust myself, believe in my own research, and don’t follow the herd. With that, I have grown as an investor and as a person.
Q: Do you have any trading regrets?
The crypto market has evolved tremendously. Even though I don’t trade crypto, I do regret not investing in it and seeing the evolution of digital payments and block chain technology ten years ago.
Usually I don’t have trading regrets. Of course, sometimes you see a stock going up, you remember you looked at the stock just some weeks ago but didn’t buy it. There is a glimpse of regret in that moment. However, I am really digesting that very quickly, because in hindsight it’s always easy to say “I should have bought” – but the fact is that I did not. And that decision to not buy at the time was based upon good reasons, so no need to be bitter about it.
I don’t have any regrets. “If, if, if” are in my opinion the most dangerous words in investing. If I had invested in Apple in 1980 I would be rich. Yes but you didn’t, so go on and stick to your strategy.
Q: Recent economic difficulties have impacted the stock market over the last few years. How have you changed your strategy in the light of this?
After shorting the markets for most of 2022, I think that equities will recover [in 2023] so I have altered my portfolio to be primarily long in growth and tech stocks. This is also the sector that has been hit the hardest [in 2022] which means the opportunity exists that great results can be booked [in 2023].
The market and the economy always move in cycles, and investors should always be ready for something unexpected to happen. Personally, I prefer to invest based on solid company fundamentals. For that reason I only had a minor exposure to the Tech sector going into 2022 and was able to avoid much of the correction/bear market during 2022.
Running a diversified portfolio of companies with solid fundamentals is a timeless strategy in my opinion. So during 2022 I did not change much in my strategy. Nonetheless, going forward I believe that after a prolonged bear market valuations in some previously overvalued sectors (eg Tech) can approach interesting levels again, which might warrant a slightly different asset allocation going forward.
We are facing quite a few challenges at the moment and they also had a significant impact on the stock market. I always liked to follow geopolitical news and I still do but when I am investing I am trying to keep those major news headlines out of my head. I don’t want to speculate what will happen in the future since it is impossible to predict, instead, I am focusing on the company’s fundamentals to determine if it is worth investing in it or not.
Q: What’s the one thing you would say to someone starting out in investing?
Copy Popular Investors with part of your portfolio and start off trading some stocks yourself. Keep some spare cash to use for opportunities which arise. Add funds monthly to build up your wealth over time. And be patient…..don’t go for 50% profits in one month and don’t quit after being down 3%.
Be curious, get involved in the markets, find out what kind of investor you want to be.
Explore, learn, and don’t be afraid. Start reading, listen to podcasts, follow the news about world markets and do your own research. With all of that, you will shape your goals and develop a strategy that suits your needs. Don’t be afraid to try something new; we are learning our whole life and it might be scary at the beginning, but this is not a reason not to try. It might be helpful to find yourself an experienced mentor who can guide you. It is easier if you have a reliable person beside you who can motivate and advise you when you feel lost. When I was at the beginning of my investing journey, I tried to remind myself that every one of my role models was at the same point once, and they made it.
Q: What does it mean to you to be a Popular Investor?
Being a Popular Investor means that you have the very important task of informing followers and copiers of your strategy and answering questions correctly. You build up a personal relationship with many investors as they reach out on a daily basis searching for information and the opinions of Popular Investors.
I am very honoured that so many people trust me by copying my portfolio. It’s a great feeling to be able to share and help people make sense of the financial markets and how to get involved in them.
Being a popular investor has completely changed my life. I love investing and eToro made it possible for me to share my thoughts and actions with others. I feel a great responsibility for all my copiers and it gives me even more motivation to continue my work.
How does copy trading work on eToro?
eToro’s CopyTrading feature takes a lot of the work out of investing for copiers, allowing them to “piggy-back” on the trader they’ve copied. There are a couple of different ways you can copy someone’s trades: copy all trades and copy just new trades.
Copy all trades
Copy new trades
With this selection, you can use ring-fenced “copy” funds to shadow all of the trader’s open positions (all of the investments they currently have). This puts in an order for all the investments in their portfolio with the same stock weighting. If you add more funds to your copy pot down the line, it will rebalance to match it.
From then on, all moves the copied trader makes will also happen on your copy account – if they buy a stock, so do you. Any take profit or stop loss orders will be the same as the original trade and will also change if the copied trader changes them.
With this selection, you’re copying the trader’s future movements, so no initial trades will take place when you choose to copy them. When the copied trader opens new positions, these will open in your account as well. As before, stop loss or take profit orders will also reflect the copied trader’s trade.
How to become a Popular Investor
eToro’s Popular Investor Program lets investors share their expertise with others and get paid for doing so, with different ranks for the most popular investors. To be part of the programme you need to:
- Have an eToro account with at least $1,000 (about £850) deposited
- Enter your full name, a photograph and biography on your page
- Trade for at least 2 months
- Maintain a risk score of 6 or less for 6 months and 7 or less for 12 months
- Abide by leverage restrictions
- Attract a copier
- Have an active feed
After this, you’re able to apply on the eToro website (find out more about terms on the site).
Higher levels have more requirements that traders need to meet, such as the number of copiers, the risk level, content written and time on the current level. Higher tiers also come with expectations that the trader will have a qualification in investment management.
“Explore, learn, and don’t be afraid. Start reading, listen to podcasts, follow the news about world markets and do your own research. With all of that, you will shape your goals and develop a strategy that suits your needs.” – Neza Molk @Nezatron
Just starting out? Check out our guide on investing for beginners to get info, tools and tips to begin your investing journey.
Copy Trading does not amount to investment advice. Your investments value may go up or down. Your capital is at risk. Other fees apply.
*Cryptocurrencies aren't regulated in the UK and there's no protection from the Financial Ombudsman or the Financial Services Compensation Scheme. Your capital is at risk. Capital gains tax on profits may apply.
Cryptocurrencies are speculative and investing in them involves significant risks - they're highly volatile, vulnerable to hacking and sensitive to secondary activity. The value of investments can fall as well as rise and you may get back less than you invested. Past performance is no guarantee of future results. This content shouldn't be interpreted as a recommendation to invest. Before you invest, you should get advice and decide whether the potential return outweighs the risks. Finder, or the author, may have holdings in the cryptocurrencies discussed.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
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