Etoro openbook is a Social investment network with more than 3 million users, so how to find the best traders to follow and copy? The TOP 100 ranking is not always a secure option and there are nuances you have to know to find a truly successful and trustworthy trader. Not all top ranked traders are completely safe just because they have big number of followers. Some of them have found ways to boost their ratings with questionable actions. So here are 10 rules to filter out the best and safest traders to copy.
Be careful with numbers that look too good, especially with the TOP 10 traders
The TOP100 rankings list in the platform does not always guarantee 100% safety in finding secure
traders and there are nuances you must know to find a trustful trader. A big follower amount is also
not a sure sign of quality as there are traders who find a way to artificially improve their statistics. Also a high gain rate by itself is not an indicator of long term success, and you should also check the
“Profitable weeks” indicator which shows how the trader is doing in longer term.
The higher the Profitable week percent the more sustainable have the traders profits been.
Keep in mind that good traders can be found also outside the TOP100 list.
In the section “People” you can filter the traders list with advanced filtering to suit your risk appetite and style.
Watch out from Scaled out trades!
Some traders don’t close their losing trades as they would damage the profit statistics. So they simply expand the Stop Loss. You can look for this in their
Portfolio tab – there is a small date under the positions – if there are several losing positions with old dates that are still open with large Stops – it’s not a good sign.
3. Keep away from traders who do not use Stop Loss at all! This might be an indicator that they
have forgotten the basic principles of risk control.
4. Avoid “young accounts” – if you want your investments to be safe you should copy experienced
traders (Optimal is at least 1 year experience). There are traders in the top with good results but
who have very little experience signaling that their success might just be temporary luck.
5. Look for traders who actively participate in discussions, give feedback and inform about their
strategies, results and also comment on the losses if such
occur. Make sure to use this opportunity and do communicate
with your favorite traders – they can teach you a lot!
Here you can see that this trader is moderately active in discussions, with 5 conversations. If there are no conversations it is not a good sign. Discussions you can find under
Overview:
6. Set your Stop Loss level. Unless you are familiar with and sure about the trader – set your own
Stop Loss’es to prevent stepping on scaled out trades.
“Stop Loss” and “Take profit” can be set in your profile under “Open trades”.
6. Look for consequence and stable growth without sharp drops - Compare the gains charts
Observe the profit and loss lines – the smaller the gaps, the better. The gains should be steady – it
means that the trader sees the big picture and understands both fundamental and technical
analysis
7. Look for steady gains in individual trader’s charts! The smaller the volatility of the line the better as it shows that the trader is stable consequent in his approach.
As we can see the gains of this trader are not very steady over the previous year. He has been
successful during the last year but in a year’s perspective he has lost 54.6%. Of course
fluctuations are normal aspect and there are no traders who can constantly keep winning.
8. Switch the time frame of statistics! By default the time is set to 6 months. But before deciding on
copying make sure to check the situation also on 12 months period.
9. Risk management. Every trader has a different approach and risk tolerance. Often the high gain
indicators come in hand with high risk strategies which are used to open many short term
positions which might not be suitable for all copiers.
How to know if the trader has a good risk management?’
The best traders describe their style and risk appetite in their profiles. You can also see his past and
open trades under Portfolio > Open trades, where you should watch out from old open loosing trades
with far stop losses. Besides that you can read the conversations on the traders wall where normally
his copiers have asked different questions regarding tactics etc.
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