Monday, March 16, 2015

Social Trading Progress - Week 2 Of March 2015

After my previous posts last week I went down with a very bad cold.  I was actually anxious thinking that I won't be able to do this post. I've since recovered and ready to explore the markets this week, as well as pay close attention to my popular investors over at Etoro.

So far social trading is proving to be a nice additional and passive income stream.  As from the 1st of March to date, I'm happily reporting a 7.26% increase on capital (trades are still open though). 


Social Trading Progress


My gut tells me that March will outperform February, especially now that yours truly has stopped meddling with the trades.

I posted a "how to get started on social trading" article last week so that you can stop wondering how to get started and simply do it.  It is a YouTube video that details clearly how to get started, how to select traders to copy etc.  It will do you good if you can heard over there after this post.

Till next week!
Wishing you success

Wednesday, March 11, 2015

How does social trading work?

I've been almost exclusively using this blog to update my progress on copy trading, however I have decided to put more information as well as how to get started on copy trading.

The video below was put together quite a while ago by the Etoro team, however it is still relevant.  I just need to point out that you can now allocate up to 40% of your equity to copy one trader, a opposed to the 20% being mentioned on the video.

Most traders started feeling that 20% was too little and Etoro being a people's platform, they listened and adjusted accordingly.

The video takes no more than 10 minutes..sit and enjoy!


To get started,visit the site here.

Monday, March 9, 2015

Social Trading Progress - Week 1 Of March 2015 (month to date)

I mentioned on my previous social trading progress post that the stats reporting on Etoro has changed a bit.  Instead of reporting on a weekly basis, Etoro now show one's progress on a month to date basis.

It's not a train smash at all and will save us from having to add the weekly revenues to get an overall monthly picture.







As you can see, the first week of March was very promising.  I like it when a month opens on a positive note.  It is a well known fact in investment circles that past performances do not guarantee future results, however they do help gauge the type of trader you are following as well as his trading style.

5.3% is quite a huge return and I'm taking it!

The whole point of this exercise is to illustrate that social trading does work if you select the right traders to follow (I must admit though that the broker has done a great of work to ensure that the bad apples are out of this bag).

Overall, I am still happy with my Investor A..and today I have added Investor B in the mix.  She is someone I've been demo testing and following for a while now, less of  a risk taker than Investor A.  This diversification is key when social trading the forex markets (or any other markets for that matter).

Looking forward to the rest of the week!!!

PS: If you want to start demo testing the master traders, you can start today for free.  Open your free account here.

Monday, March 2, 2015

Copy trading forex - February progress

My first month of copy trading forex live has been quite a ride, between trying to second guess my copied traders and some changes in Etoro I can only say that I have learned a lot.

The first thing to take note of is that the way stats is reported has changed.  I will no longer be able to show graphics of weekly stats as it is now  reported as month to date.  As you can see below, my January month was in the red by 10.9% (prior to copy trading), and after starting to copy trade I managed to bank a profit of 11.22% during the month of February.


There was a huge drawdown on the account all thanks to the uncertainty with Greece.  Me, being me I started to manually close some trades and those who left them alone have banked double the % on interest.  Well, that is just a lesson for me to LET THE COPIED TRADER DO HIS WORK while I focus on my other forex account.

So, here we are for my first month of copy trading....11.2% profit/interest.  This is much better than what a bank would give me so, I'LL TAKE IT!!

Till the next update!

Monday, February 9, 2015

Copy trading forex - Week 2 progress

This has been a hectic week for both traders and copy traders alike. The much awaited news release on the Non-Farm Payroll is past and gone and looking very good for the USD. Those who have gone bullish on the USD prior the news release have profited immensely.I'm glad my master trader is one of them.

Personally, I only trade post news release as I am more of a fundamentals trader vs a technical trader.  The trader that I am copying on Etoro uses technical analysis, therefore complementing me very well.

In a nutshell, this is my stats for the previous week! 12,46% is not so bad at all.  I also practiced restraint this week and left the trader that I am copying to close the trades when he saw fit.  In any case, with all the news releases last week, I only had time to manage the account that I trade personally.

More good news.......

Etoro has become stricter as well towards popular investors (Etoro's term for master traders) in the following 2 ways:

1.  No high leverage traders will be admitted to the popular investor program (only small to medium risk trades)
2.  Investors must have no more than 20% of account balance tied in open trades.

Copiers have been burned in the past by popular investors that use maximum leverage to trade.  You'd find that their accounts can stand the amount of risk because they are huge accounts, while the poor copy trader is using a measly $50 therefore gets wiped out.

Given the new developments, an account that has a balance of only $100 (example), will now only open a maximum of $20 positions at any given time.  This slashes the risk of trading forex by a considerable percentage.

I'm currently testing some more popular investors on my demo trading account, also comparing them to my current trader.  I am not in a hurry to diversify.  Etoro only allows a maximum of 40% of your balance to be allocated to one trader unless your account is less than $250.  In the meantime I am also copying my sister's account, who happens to be solely copying the same trader. This is allowed and not illegal at all.  Most traders become happy with one trader to a point that they open various accounts just so they can copy the same guy or girl!

That is all for this week...I will blog again to keep you updated on how this venture is going.

Start copy trading today and also contact me for a list of my best performing traders!

Thursday, January 29, 2015

Does copy trading work? - My journey begins







It has been weeks since I updated this blog and I started worrying that some may think that I have abandoned this blog completely.  Well! That is not the case, between the holidays and schools opening...one had to juggle and race against time all in one.

The main reason though that I took so long to blog is because I was testing several traders on my demo account, to make sure that they are worth investing on.  I also had to dig deeper to find traders that fit my profile as discussed on my previous post titled: How to do copy trading successfully

I also do my own trading because my inquisitive mind cannot just sit back while the master traders are having all the fun:)

I have decided to attach my progress chart for this week just so one can see that I am not making up the stats.  I don't believe in flaunting statements on my blog as I believe that one's earnings are their private business....it is good that Etoro  allows me to just show the percentage earnings instead.

So far I have found two popular investors (master traders) that fit my copying criteria..however I chose to go with Investor A (this is how I will call him from hereon) purely because his trading fits my objectives (Intra-day trader)

As you can see, my investment with him has earned me 3,6% for this week.  The figure could have been much higher (actually his copiers achieved 3 times this percentage), however, being the anxious person that I can be sometimes I decided to manually close the trades as soon as I saw decent profits.

This has short changed me somehow so my next goal is to work on my trust issues and let the investor do his own thing while I'm busy trading on my other account.

On the other hand this is a strong point because one can manually manage their  copied trades, you can change your stop losses and take profit levels, close the trade anytime you want to etc.

That is all for this week...I will blog again to keep you updated on how this venture is going.

Start copy trading today and also contact me for a list of my best performing traders!

Wednesday, November 19, 2014

How to do copy trading successfully

As promised in my previous post, today I'll be talking more about Etoro's social trading platform, as well as how I select master traders to copy.

I may need to remind you that like all investments, FOREX has its fair share of risks (as well as rewards). Copy trading does not necessarily mean that you will not have losses, but when done right it does give you a fair shot at reaping the same rewards that the master traders benefit from.

Etoro's social trading platform is called Openbook. To simplify things, Etoro's openbook has an almost similar platform to that of Facebook. You get to interact with other traders, like, comment and share other's status. What I also love about Openbook is that you get to see the trades done by other traders, drill down further to a trader and study his gains/losses, overall trading history, the level of risk he/she takes and even copy their trades.

This brings me to copy trading......

Copy trading has been a messiah for most traders, especially those who are not confident enough to venture into forex trading on their own. It does have its ugly side though if you do not select the right traders to copy.

As a new trader, you want to make sure that you want to follow a trader who actually knows what they are doing, and share a similar risk appetite to yours.

This brings me to the criteria I use to select traders to follow as well as point out some pitfalls that new copy traders fall into:

  1. Trading History

You want to know that the trader you are about to copy has been doing FOREX trading for a while (at least for a year), while showing a steady uptrend on gains. Pay particular focus to the last 6 months of the trader's history. There is no harm if a trader has some losses but shows massive improvements along the way.

  1. Risk breakdown

As a new trader, you do not want to copy a trader with high leveraged trades. Such mistakes could blow your FOREX account's bank balance. Etoro classifies the risk breakdown of a trader as LOW, MEDIUM AND HIGH. I'd recommend that you only copy a trader who does low-risk trades only, but that is not always possible. Decide on the amount of risk you want to take. I personally do not copy a trader with less than 80% of low-risk trades. I can only tolerate no more than 5% of high-risk trades.
THIS IS THE POINT WHERE MOST COPY TRADERS LOSE THEIR MONEY.
  1. Copiers

Always check a trader's portfolio for “copied trades”. You are doing this because you want to copy traders who are experts in trading, and not those who simply copy others like you'll be doing. I've seen some copy traders deciding to rather copy whoever introduced them to the platform, so that they won't have to go through qualifying traders by themselves. I have mixed feelings about this approach.

  1. Open trades

Always lookout for a trader's open trades. I personally do not copy a trader with open trades older than a week. This can mean that the trader opened a position hoping for a particular outcome, however the markets decided to go a different direction. The trader keeps the position open with the hopes that eventually he will be in profit. This sounds like gambling to me.

  1. Recent results

Over and above the trading history of the trader, do make a point of studying a trader's recent trades, as well as the frequency of his trades. When you copy a trader, you allocate a certain amount to him/her. If the trader is not active, your allocated amount will be sitting dormant. A trader must do no less than 3 trades a week.

  1. Openbook wall

I also study a trader's wall because I want to see how/if he does interact with his copiers and followers, whether he has any concern for them and whether they do explain their strategies and decision making process as well as advise their followers

It is not difficult at all to find traders who fit the above criteria. Etoro provides tools for analysing the traders and their activities. Copy trading is not a get rich quick scheme. You must review the traders at least once a week, hire and fire as you see fit and you must always lookout for new traders to copy. Never make the mistake of allocating all your balance to one trader.

MOST IMPORTANTLY... you do not need to use your own money to test out the traders you have chosen. You can choose to copy a trader using virtual money allocated to your DEMO trading account.

  1. Contact me should you need assistance with selecting traders to copy as well as setting up your Etoro account.