eToro Presents: How to Manage Your People-Based Portfolio

eToro CopyTrader is a true revolution in how people approach the financial markets. Whereas before CopyTrader, financial expertise could only be acquired through years of learning from painful mistakes, this groundbreaking feature enables traders to acquire the expertise of a professional trader within seconds by choosing to copy one. The question then becomes not how to manage your financial portfolio, but how to manage the traders whose activity you copy, or in other words, your people-based portfolio. To answer this question, let’s use a metaphor from the world of business. Just as the duties of a successful business executive is to recruit, monitor and manage staff, the same duties have to be performed by a successful CopyTrader.

Recruit

As a CopyTrader, your recruitment base is eToro OpenBook investment network. Luckily, OpenBook provides you with several ways to filter its enormous selection of traders. The most important of these are the OpenBook rankings and the Market Leader filters. Through these filters you can find the most successful eToro traders and the best traders of a certain instrument. Once you limit your choice to a narrow selection, look at the traders’ profile, taking particular notice of their profit/loss ratio, overall gain percentage, and the portfolio. Make sure to check a few traders, so you can select the best and most diverse traders for you to copy.

Monitor

Once you start copying traders, it’s important to constantly monitor your copied forex trades and their performance. Simply leaving your account in the hands of the experts is too dangerous. You must keep in mind that even though the experts probably know what they’re doing, they don’t know what your other copied traders are doing at the same time. So for example, if one of your copied traders is buying EUR/USD and the other is selling EUR/USD, the two trades cancel each other out, and it’s up to you to close one of them. Or, to take another example, if a trade is clearly going wrong, it’s up to you to close it in order to prevent any further losses.

Manage

Traders’ statistics can be deceptive, and so it’s up to you to assess how your copied traders are performing and to manage them accordingly. If you see that a certain trader is causing you more losses than profits, or that another trader has simply stopped trading, it’s probably a good idea to let them go and find another trader to join your portfolio. The key here is to keep checks on all your traders so you can act before it’s too late. Using these three actions you can retain full control of your people-based portfolio and make sure that it is consistently profitable.