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    Copy trading with eToro: impressions, doubts and (ignored) lessons

    Posted: 23 Sep 2020 02:23 PM PDT

    (no promotional content, no affiliate links)

    Hi,

    exactly four years ago, I started copying eToro investors / traders that I selected using the broker's built-in search engine (profitable in last two years, already being copied by others), followed by manual filtering, to take into account fluctuations in yearly returns, composition of their portfolios etc. With that, I got a list of 10 people whom I started to copy on a demo account:

    https://drive.google.com/file/d/1u52f0XHfr-LauIscKcFDYF0yGTTUr6VY/view?usp=sharing

    In the screenshot you can see that in case of the first two of them the amount invested was $10,000, while for the rest it was just $100. This is because I started copying the first two a couple of weeks earlier; eventually I changed this into $100 the same day I made the screenshot and this is when my calculations start - so this thing is irrelevant, I just cannot travel in time to make another screenshot.

    What I did after that?

    Well, within the next six weeks my profits oscillated between -$11 and +$9.50 (the biggest profit was on Nov 9, a day after US presidential elections). I found this "boring" and discontinued experimenting with copy trading.

    Today I looked back at those ten traders. Here is what I found. Firstly, seven of them are not with eToro anymore; investorNo1, Simple-Stock-Mkt, tradingrelax, 4exPirate, primit, Gallojack, xjurokx. The other three traders are:

    • toppertrader: not being copied by anyone and for a good reason: his loss this year alone is 61.16%!
    • Jean-marcLenfant: copied by only 67 people; his loss this year is -1.09% but in general he is quite successful, with yearly profits ranging from 3.57% to 7.32%.
    • Girem2: he has no copiers, his profit this year is 41.45% but in 2018 he experienced a loss of 83.15%!

    My observations and thoughts are as follows:

    1. Seven out of ten traders are not with eToro anymore, which makes me wonder why. I have no proof but my guess is they simply performed poorly, lost their copiers and closed their accounts. This is already alarming but what if they opened another account? Or, even worse, multiple accounts? They could be investing small money and try different risky approaches, hoping that at least one account will turn out profitable in the long turn, attracting potential copiers. (I'm not claiming that those 7 particular traders did this, it's just my general suspicion regarding some of eToro traders)
    2. I'm unable to calculate what would be my profit if I never stopped copying them, because I cannot check at what day and with what profit those seven traders left eToro. I'm guessing this would be an immense loss. On the other hand, considering the three traders who are still with eToro, I would lose more than a quarter of my assets!

    What now?

    I must be a quite adventurous person or at least an incorrigible optimist, because a month ago (exactly on Aug 26th) I started copying three traders with real money. Here is who they are.

    rubymza (Heloise Greeff)

    • invests in stocks, with GOOG, INTC, BLDP, MA, MSFT, AMZN, V, MU, IBM and NXPI making up 50.3% of her portfolio (allocation of each of them is in between 3.02% and 6.85%)
    • active since 2016 (only the year 2016 ended with a loss)
    • has 3044 copiers and $2M-$5M of copy assets under management
    • strategy (her own words): "My investing strategy focusses mostly on US indices, tech and pharma, promising future (5-10years) growth. My trades are based on technical analysis using machine learning to understand patterns and trends in the markets. I prefer to keep a diverse portfolio to spread risk while achieving great returns."
    • she gave an interview for Bloomberg a couple of weeks ago
    • own experience: I just happened to run across her second worst month ever on eToro; my loss is -6.27% at the time of writing

    OlivierDanvel (Olivier Jean Andre Danvel)

    • he is a Forex trader, making typically 21 trades per week; his favorite currency pairs are EURCHF (12% of trades), CADCHF and GBPUSD; the trades, however, typically make up below 5% of his portfolio (at least whenever I'm checking it), making most of my funds unused
    • active since January 2017: surprisingly enough, he has every single month profitable, though monthly profits are in the range of 0.03% to 3.34% only
    • has 8977 copiers and more than $5M of copy assets under management
    • strategy (his own words): "I monitor currency pairs all day to find the best entry. There is some management/scaling position for perfect entry. The risk control is a big part of my strategy," (quite vague, to be honest)
    • own experience: my current profit is 0.26%

    rayvahey (Raymond Noel Vahey)

    • commodities compose 76% of his portfolio and his favorite assets are Gold and Oil (at the moment, Gold makes up half of invested amount)
    • active since July 2016, with the following yearly profits, starting from 2016: 6.56%, 10.05%, 13.09%, 32.26% and -2.03% (the current year)
    • has 1493 copiers and $1M-$2M of copy assets under management
    • strategy (his own words): "My system is based on patterns, and a variety of technical analysis tools and some fundamental analysis. I primarily trade in commodities. " (quite vague as well)
    • own experience: my profit with rayvahey is 2.56%

    What was my strategy to hand-pick these particular traders? First I did some basic scanning using eToro's built-in search engine. The most important filter was that the trader was profitable within the last two years: unfortunately, eToro does not allow to reach details of earlier performance automatically. To know how the trader performed before 2019, I had to look at stats in the profile of each of them. I was also taking into account how often they trade (to avoid those who do only a couple of trades yearly), whether they were trading recently and whether they write posts regularly in their feed. With this, I got a list of fifteen candidates to copy:

    • olivierdanvel
    • marianopardo
    • rubymza
    • rayvahey
    • martidg97
    • overit
    • misterg23
    • knw500
    • jianswang
    • reinhardtcoetzee
    • miyoshi
    • alderique
    • jarodd76
    • benson9904
    • big-profits

    As you already know, I finally chose three of them. Rubymza seemed to be the most trustworthy stock trader, based on profits, posts feed and regular trading, among other things. Regarding OlivierDanvel, his uniqueness is the ability to record continuous profits with the Forex market. Finally, with rayvahey I wanted to increase my exposure to the commodities market.

    Wish me good luck!

    Michael

    P.S.

    You might find those copy-trading related readings interesting:

    Disclosures:

    • What you see here is my personal opinion, my own investments and should not be treated as investing advice
    • I'm an amateur investor
    submitted by /u/investing-scientist2
    [link] [comments]

    Nikola is down the toilet Trevor is fired

    Posted: 23 Sep 2020 09:58 AM PDT

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