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Etoro/Trading FAQ


Do I need to do anything now I'm copying you?

No you don't need to do any thing. All trading activity I engage in will be automatically executed in your copy so long as you are copying with sufficient funds.

My copy isn't working! Why aren't there any trades in my portfolio?

There are 3 possible reasons you don't have any/all positions open in your copy fund.

1. You did not select “copy open trades” when you started the copy. And I have yet to open any new trades.

2. You opened the copy outside of market hours.

3. You did not copy with sufficient funds. minimum $500 to cover all positions.

What is the minimum/recommended copy amount?

Optimal amount $5000+

Recommended minimum $2000

The minimum currently to cover all trades is $500.

I want to add funds to my copy, what is the best way to do this and when?

You can add funds whenever you want.

The best method in my opinion is to add funds at the same time I do. This is once a month at a rate of 5% of total equity. This way your copy stays in sync with mine and grows at a steady rate it also means you don't have to give up the entry points on your current trades or pay the spread again.

I will give 24 hours notice before I make any deposits.

If you wish to add significantly more than this amount please refer to the next question down "I have added funds to my copy but only some of my funds are being used, why?"

I cover the benefits of making this monthly deposit in the "I have received an email telling me to deposit more funds into the copy, do I have too?" question near the bottom of this FAQ.

I have added funds to my copy but only some of my funds are being used, why?

Any funds added to the copy will only be assigned to new trades.

So if you add a large sum rather than the 5% I add each month then it will likely sit idle in unassigned funds for quite some time.

However

If you wish for your additional funds to be allocated to open trades you would

have stop copying and then copy again with the additional funds added.

I would only recommend this if your copy is currently in profit.

Please be aware you will have to pay the Spread again.

How long should I copy for?

The longer the better I recommend 6 months or longer.

The longer you are in for the greater your equity will grow which in turn results in greater profit which in turn increases equity and round and round it goes growing and growing. This is called compound gain and can not be achieved in the short term

Is now the right time to copy?

Maybe/Maybe not...

If you intend to copy long term then now is as good a time as any.

There is unfortunately no such thing as the perfect time to copy in my opinion only hind sight will show that, and there are no guarantees.

Deciding when and how much is really down to a person's psychology. If the copy goes well into the red after you decide to copy, will you bail or stick it out?

I am a medium to long term trader/investor and if you give me 6 months to a year I will likely return you a good profit.

My focus is always on the long term gain.

But the decision is yours.

Should I copy open trades?

Yes you should copy open trades.

Given the recent large correction in the Crypto Currency Market. The current price of my crypto holdings now represent a good entry point to copy from.

Please bear in mind that regardless of when you choose to copy there is no guarantee of profit. Do I need to close trades myself?

No you don't need to close trades yourself.

The option to do so is there so you can if you want.

However I advise if copying to allow me to close trades.

My copy say's Pending close, what does this mean?

If you stop copying then all your copied trades will close when the relevent market is open.

So if for example you have a trade in apple (AAPL) and you stop copying outside of NYSE (New York Stock Exchange) market hours 2.30pm-9.00pm GMT. Then you will get a Pending Close notice. This trade will close when the market reopens and so your stop copy command will be enacted.

If the above statement does not seem to apply, a pending close status can be the result of a glitch with eToro, and so there is nothing I can do about it.

Why aren't all my funds committed to trades?/ When will you commit all my funds?

Either you have added funds (as I covered earlier in this FAQ)

or its because I am maintaining a reserve of Unassigned funds (cash). It would be irresponsible to assign all your funds and have 100% exposure.

Maintaining a reserve means I am always ready to buy into any dip/correction or even in the worst case scenario a crash.

This Reserve usually amounts too between 10-30% of total equity.

What happens to the profit when you close a trade?

Any profit from a closed trade along with the funds originally assigned to that trade are returned to unassigned funds and remain in the copy to be assigned to future trades.

Can I withdraw just the profit from my copy?

There are 3 ways to take profits/funds out of your copy.

1. wait for the trader to withdraw funds at which point you will receive a copy dividend (see question below.) This however will not occur while copying me as I am growing my equity in my account not withdrawing it.

2. Remove unassigned funds from the copy (strongly advise against this as those unassigned funds are needed for future trades). Removing funds can cause the copy to stop functioning correctly.

3. Stop copying, at which point all funds including profits will return to your account balance (this is the only option I recommend in the case of copying me as I don't pay dividends). After you have stopped copying you can copy again or invest elsewhere.

I have received an email telling me to deposit more funds into the copy, do I have too?

No you don't, Its up to you.

If you have recently added funds to your account anyway then there is no need to add more.

However there are both benefits of doing so and potential drawbacks of not doing so. The benefit of doing so is arguable great, because increasing the overall equity means that although the percentage amount of each trade will be the same the relative equity share in each new trade will increase. Now as the months tick by and the entire portfolio is replaced with new trades this compound gain will really start to make an impact. As equity share increases, profit increases and so the equity again increases and so on and so forth, combine this with regular deposits to the copy when I deposit and this compound effect is accelerated further. Although if you don't deposit you are still getting the compound effect of profit you miss out on this increased effect.

As I continue to deposit and a copier doesn't the pool of unassigned funds becomes relatively smaller and smaller until the new trades being opened yield less and less return or worse case a trade can no longer be opened as it would now be less that the $1 minimum etoro sets this happens as your equity has not kept relative parity with my own over time, This granted could take a long time and you would likely to have missed several deposits to the account. So for those with a smaller sum of equity just a few hundred dollars this could mean that there isn't sufficient capital to open new trades at all and their copy would stop working.

Another downside is if exposure in the portfolio is very high at the time I make a deposit and you don't add more funds you will likely miss out on some new trades due to a lack of liquidity until funds are freed up from other trades.

What is a copy dividend? and how does it work?

A Copy Dividend is a payment made from your copy fund to your account balance. It ensures that every time the trader you are copying withdraws funds, the proportional amount will be removed from your copy allocation and sent back to your account balance.

As an example; Trader X has $10,000 in his account. You allocate $1000 to this trader and after a few weeks, he makes a profit of $2000. If Trader X decides to withdraw his profit, the proportional amount for you - $200 - will be removed from your Copy Allocation and sent back to your account balance.

#FAQ

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