I’m sure you’ll agree with me when I say that trying to find the best eToro traders to copy is not as easy as it sounds.
I can imagine what happened to you.
You simply chosed some traders with many copiers or you followed the eToro suggestions… and unfortunately, after some time, you had some bad surprises.
You tried to think on your own… but you never could find a search method with a basic logical sense and a precise procedure to find good traders.
Don’t worry, it happened almost to everyone.
Today, however, everything will change.
With this post, step by step, you’ll learn:
1 – A precise, effective and simple (but yet professional) procedure to find the best eToro traders (or Gurus or Popular Investors)
2 – How to effectively exploit the eToro ”wisdom of the crowd”, but this time in an intelligent and profitable way
3 – As a bonus (although from today you would no longer need it) at the end you will find a list of the best traders to copy on eToro in our opinion, all found using this procedure.
Do not jump immediately to the end though!
This post really deserves your attention. Discover how to really become a professional Copy Trader.
How to find the best eToro traders with the Search People filters
New on eToro? Then it’s the perfect time to open a Free Demo Account in few seconds and follow this procedure live.
65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
To look for the best traders, or, as they used to say, the best eToro Gurus, to copy in our portfolio we have an excellent search tool called “Copy People”.
To access it, click the appropriate button from the sidebar on your profile.
At this point eToro will provide one of its pre-programmed research to try to assist you.
Go ahead and click on “GO”, but right after just remove all filters by clicking on all the Xs.
From now on you will start from zero and you’ll learn an independent and professional method.
You can notice you have 4 columns with 4 different data (they can become 5 if you reduce the browser zoom or if you have a very wide screen):
- Risk Score
- Copiers Changes
First fundamental point.
Many people are unaware that there are several other data you can visualize and study.
Some are very important and you will not even find them in the trader’s personal profile!
To find them, click on this symbol.
Then, by clicking on each of the four columns, all the other data will appear.
By clicking on each column header you can choose which information to display. Once you have made your choices, to confirm just click on the “confirm” button in the upper right.
Soon I’ll reveal you what are the most important data to look at that no one else around will never tell you.
But first, it’s important to understand what these data mean.
If you want to become a real professional and really learn our procedure to find the best eToro traders to copy it’s essential to know all the values.
List of available data about the eToro traders
– User Data Column
In this first column we can find the basic user data, i.e. his username, his country of origin, a photo, and the symbol that indicate if he’s a Popular Investor or just a Verified Trader.
“Verified” means that the trader has performed the procedure for confirming his account with eToro, sending all the required documents to prove his identity.
In the list, a verified trader is identified with the green flag symbol.
A Popular Investor instead is a trader, already verified, that in addition has decided to participate to the homonymous program, to gain access to additional earnings recognized by eToro according to merits, primarily on the number of copiers. In return, the trader agrees to show his real name and a real photo, both controlled by eToro.
On the one hand eToro empowers traders showing their true identity, on the other investors are sure to be investing on real people, who has put themselves into play in the first person, without hiding.
Needless to say that it is highly recommended to use the “Verified” flag, to show only the people at least verified, together of course with all the Popular Investors.
– Return Column
Unlike previous years, where in the counting of the performance there were also the commissions earned by the trader for the copy trading activities (something had nothing to do with the real ability of the trader to operate in the markets), today the figure is calculated by a simple formula that excludes from counting any deposit or withdrawal, and returns what was gained (or lost) by trading activity only.
Although there is no limit to the ability of a trader, you should always have a critical eye, and be wary not only when numbers are too low, but even when they are too high, of course, always in view of the selected Time Period.
When trading, there are no gains without risks, so very high gains may hide risks as high.
– Risk Score Column
Is a very important data, obtained from an eToro proprietary formula, which tries to give a general vote on the dangerousness of the traders in question, based on different values, including in particular the instruments traded, their volatility and the leverage used.
– Copiers Column
The number of copiers, i.e. of the investors who are replicating with real money the trading signals executed by the trader. EToro usually sorts the list by this figure.
It’s like a popularity rating of the trader. You should, however, be extremely careful, because popularity is definitely not enough to make optimal choices.
There are quite frequent cases of traders who, in favorable periods, have become very copied for a simple ripple effect, where investors have copied the choices of other investors without objectively analyzing the performance of the trader. Many of them have had unpleasant surprises.
This is a classic case of failure of the wisdom of the crowd in Social Trading, because investors did not evaluate the data independently (principle of independence), but they get influenced by the perception of others.
So, always take this data very carefully. We will see later how to properly take advantage of it.
– Copiers Change Column
This figure shows the percentage change in the total number of copiers of that trader.
Do you want to look for those on the rise, that are becoming popular because they are having good performance? Then the values must be positive.
Do you want to look for those traders recently abandoned by the crowd to see if there are some that are still worthy? Then the values should be negative.
– Daily Return Column
Is an average of the percentage gain obtained by the trader every day. The more you increase the Time Period, the more you can be aware of what you can expect from that trader, since the data increase and the average is more truthful.
As before, be wary both of number to low and especially of number to high.
– Weekly Drawdown Column
Always within the selected Time Period, this figure indicates the value of the maximum decrease on the assets recorded in the worst week.
As mentioned in the previous lesson, the drawdown is definitely one of the most important data for performance and especially risk analysis, which is why we have dedicated a whole lesson of this course (and also of the Social Trading’s one) to this element, to learn precisely how it is calculated by eToro.
– Daily Drawdown Column
As above, but referred to the drawdown of the worst day of the period in analysis. Both figures are a good starting point for imagining how you would feel in that particular day or week.
– Profitable Trades Column
Is a simple winning percentage. It indicates the percentage of transactions the trader was able to close with a profit.
Even here, the temptation might be to prefer investors with high percentages, with almost or precisely a 100%. It could seem that they are so good to never fail a trade.
Let me tell you very frankly: traders who are never wrong do not exist. When trading is normal to lose sometimes.
The only reason he may have such a “perfect” percentage is simply that, as a strategy, he never closes a transaction when it is losing, but he lets it run in the hope that sooner or later it will come back into profit.
Needless to say how risky this is, as the market sometimes does not come back in any case, and does not take any prisoners.
– Trades Column
This figure indicates the number of operations performed in the selected timeframe. The frequency with which a trader works is very important, especially to be able to control his behavior.
Furthermore, some traders operate way too frequently.
– Active Weeks Column
The number of weeks in which the trader has been active, performing operations.
It has to be considered obviously together with the selected Time Period. It’s an indication of how dynamic the trader is, and if by chance he stops trading in some periods.
– Average Trade Size Column
This is a very interesting data provided by eToro, and is also interesting to know how it is calculated.
It’s an average value of the Amount invested in each operation divided by the relative Realized Equity.
Basically, every time a new trade is opened, the system divides the Amount value (in other words, the margin blocked by the broker) for the Realized Equity of that moment (which is Account Balance + Invested Amount, or Equity – Net Profit) , to then make an average of all the values.
This calculation indicates how many resources the trader uses to open a new trade, and it’s very important because a resource used is equivalent to a resource risked.
Being performances equal, a lower Average Trade Size indicates that the trader was more efficient in using his fund to get results.
– Exposure Column
This figure identifies the average trader exposure to the market in the period taken as a reference, ie how much of his capital has been invested in trading activity for that period.
The Exposure is the percentage amount of capital the trader uses on average in investment operations in a given period, in relation to his total capital.
To obtain this value, eToro multiplies Average Trade Size for a time coefficient that takes into account two factors: the duration of each trade and their temporal persistence, ie the duration of their overlapping.
Essentially, the Exposure is a kind of Average Trade Size but that also takes into account the time when the operations are kept open simultaneously.
The more the Exposure value is greater than the Average Trade Size, the more means that the trader holds multiple operations open simultaneously.
As you can imagine, the more this happens, the greater the danger. But this is not enough, you have to understand how he caused that to happen, especially if he added new trades to those already at a loss (negative sign) or whether, on the contrary, he did so with those already in profits (positive sign).
– Profitable Months Column
The percentage number of times that the trader was able to close a month with a profit. It thus shows the consistency and the ability of the trader to generate profits.
However, it must be put into context with the style of trading, because for example a long term trader could also have a low percentage, but at the same time still be highly profitable in terms of performance.
Now that you know the meaning of all the data, let’s look at the search filters.
After that, you’ll have everything you need for the best eToro traders search procedure.
Functions of the eToro Traders Search Filters
Here’s all the filters you have available:
– Time Period Filter
We start again from the Time Period filter. An ideal starting point is to use the last 2 years to have as much data as possible and start finding some good traders to be deepened.
Sometimes it might be useful to use a very close Time Period, such as Last Month, to find good traders who are in optimal stages to be included in the portfolio.
– Profile Filter
With the profile section we can filter and display only those expert traders who are also Popular Investor, or even view all those who are just verified traders.
We can display only those of a specific country, and specify whether we want only those showing a picture of their profiles and their name and surname (verified by eToro).
In short, we can see only those who really decide to commit themselves.
– Social Filter
In this section we can find expert traders according to their degree of popularity.
In Copiers we can filter them based on the number of other investors that are replicating their trades, whether few or many. With Copiers Return instead according to how much the copier investors are gaining.
With Copy Assets Under Management finally we can look for traders on the basis of how much capital has been invested on them by other investors, in other words on how much capital they are moving.
As said before, it can be interesting information, but the popularity of a trader should always be the last element of investigation when you have to decide whether to replicate him or not.
– Performance Filter
This section instead is much more important. Here we can look for experienced traders based on their gaining percentage, or their percentage of profitable trades or weeks.
For all 3 of these data we have always said that you must be wary of too high values, and in the case of winning percentages this is always true.
Regarding gain percentages you must however contextualize the value according to time. A 100% profit in a month could hide a big risk, while in one or two years could be a great opportunity.
Therefore, always consider the Time Period you are using.
– Risk Filter
The Risk section is definitely the one you’ll use more, given that the level of risk is always the most important element to be considered when investing.
If it’s obvious that risk must always be kept to a minimum, and therefore you need to avoid too extreme values, it’s also true that it cannot be avoided completely. Doing too stringent research you’ll risk to exclude many traders with a good risk/reward level.
Only a certain level of practice and study can give you a balance to find those popular investors with good performance and contained risk.
– Portfolio Filter
In the Portfolio section, using the Allocation filter, we can look for experienced traders on the basis of the financial products on which they operated in the selected time period.
As its name says, is the filter for composing your People-Based Portfolio with investors specialized on different CFDs among indices, equities, commodities and currencies of course.
The other two filters instead, Average Position Size and Exposure, we can say that are related to what we said before in the Risk section.
Since these parameters indicate how strong the trader invests his capital, how much he exposes himself, it is obvious that these concepts are always connected to risk. The more capital is used, the more it is exposed to risk of loss, it is a law of trading and investment.
– Activity Filter
In the last section we can instead look for the popular investors based on how much they are dynamic and how aggressively they invest and trade on the markets.
With Active Weeks you can filter traders based on the number of weeks in which they operated (but always considers the Time Period you’re using), while with Trades you can intervene directly on the number of trades they executed.
You might want dynamic traders to see your capital always moving, or you might prefer tranquility. In any case, more movement means more and more opportunities for risk, so traders who exaggerate in intensity should be viewed with suspicion.
On the other hand, you may not want expert traders who operate far too little, to avoid suffering from a certain immobility impatience (however, if you think you have this “syndrome” you should think about cure it, because, in the trading world, not being able to stay still, without operating, is a leading cause of failure).
Step by step procedure to find the Best eToro Traders to Copy
At this point we are ready to begin to “play” with data and to use these filters to find the most expert traders.
Here is the step by step procedure.
STEP 1 OF THE PROCEDURE TO FIND THE BEST ETORO TRADERS
1. INSERT FILTER: Last 12 months
It’s important to look at least at one year of data, even better if 2 years, so either “Last 12 months” or “Last 2 years”.
Try to do this research with both values.
2. INSERT FILTER: Verified Status
We want to be sure to evaluate only real people whose veracity of the personal data has been thoroughly checked by the eToro team.
Traders who have joined the “Popular Investor” program are still too few, so we avoid this filter to not limit our search too much.
3. INSERT FILTER: Minimum Return 10%
We are all here to make profit, so if a trader in a year has not been able to generate at least a 10% return maybe he’s not the right choice.
Obviously, if in the first filter you put “Last two years”, here you have to enter 20%.
4. INSERT FILTER: Profitable Trades between 40% and 80%
This is the first important filter.
In the first place we must remove the traders that have too low winning percentages (for obvious reasons), but also and above all those with too high percentages.
If you know a bit about InvestinGoal you’ll understand right away why.
Just a quick refresher, too high percentages (which for us are from 80% upward) are not a sign of skill, but only of trades management techniques like the Averaging Down or the Martingale.
Both techniques essentially involve not to close the loss-making trades, but to open others to compensate and recover the losses more quickly. By never closing the loss-making trades, the winning percentage obviously remains very high.
These techniques can be effective in some cases, but if you are not really good at managing them, most of the time they are a sure recipe for failure.
If the lower limit of 40% seems too low, consider that some top expert traders get excellent profits with those percentages.
In a strategy, the percentage of success is not the only thing that counts, there’s also how much it earns on average with profit-making operations, and how much on average with loss-making ones. This is called Risk-Return Ratio.
5. INSERT FILTER: Risk Score lower than 6
EToro has developed a Risk rating system of the trader’s strategy.
This rating is calculated by taking into account various elements, in particular the average volatility of the instruments on which the trader operates.
The more volatile the instruments, the more volatile the portfolio that contains them, and therefore the greater the risk.
Values above 6 start to be high.
6. INSERT FILTER: Average Trade Size – Max 5%
This value is very important, because it quickly removes all those traders who invest too large percentages of the asset in each operation.
If the percentages are too high it only takes a few wrong trades to burn much of the account. Better to avoid those who exaggerate.
And with this, we’ve finished the series of filters to be added. Here is a graphic summary before moving to the columns’ management.
Let’s proceed to insert the columns with the necessary data to find the best eToro Gurus.
7. INSERT COLUMN: Profitable Trades
As explained before, we can change the values we want to see in the 4 available columns.
In the second column enter Profitable Trades, that is the trader winning percentage. We’ve limited it between 40-80% with the filter, but we still want to see the values to get an idea of the type of strategy.
8. INSERT COLUMN: Average Trade Size
Same as above, we have limited the Average Trade Size with the filter, but we still want to see the actual value, especially in correlation with the one that is following.
9. INSERT COLUMN: Exposure
We’ve explained what the exposure value is, and for this research it’s certainly one of the most important value.
Moreover, it’s a value that no one around the internet will never tell you to observe. This is InvestinGoal’s exclusive professional material.
As already mentioned, the Exposure results from the Average Size. There are two aspects to be considered:
1) the more the trader, on average and in a given period of time, invests (therefore risks) his resources on the market, the more the Exposure value increases.
So, being the performance equal, you should prefer a trader with a less Exposure because it means that he risks fewer resources to achieve the same result.
2) the more the exposure differs from the Average Trade Size, the more the trader has the tendency to keep operations open simoultaneously.
As we know, it’s not necessarily a bad thing, but it’s a possible risk clue, because the more the positions opened on the market the higher the risks due to volatility.
So, the higher the Exposure value and the more it differs from the Average Size, the more you have to investigate to understand the reasons for these values.
10. INSERT COLUMN: “Copiers”
This is the special move to optimize your search using the Wisdom of the Crowd in an intelligent way.
We set up our filters with professional logic, we have displayed some useful technical data and now we’re going to see even more in the second step.
Now, to make the first list screening, we can exploit the experience of others eToro investors to find the most worthy traders first.
Enter the “Copiers” data in a column and then click on it to sort the list from the trader who has more copiers downward.
Here is the final result of the settings to find the best people to copy on eToro.
In this way, starting from the top, we’ve created a list of traders with interesting characteristics (thanks to our filters) and that are already followed by other investors (thanks to the Copiers data), proving that maybe there is some value.
Obviously, this is not enough. You must be sure of their skills.
And that’s why we need a phase two.
STEP 2 OF THE PROCEDURE TO FIND THE BEST ETORO TRADERS
Time for some manual steps.
One by one, starting from the top, from the one with most copiers, start to see the personal profile of each trader.
Once you’ve opened a profile, for now don’t start to check all the data, it’s not yet time.
To slim down the list further and focus only on the best eToro traders, take a look at the Equity Line of the trader’s account.
Get in the brand new Chart section.
Here (finally) eToro shows a real Equity Line of the trader’s account (for privacy rules it doesn’t show the real money balance but it’s all created on a hypothetical initial account of $ 10,000).
Click the button at the top right to see the large Chart, then select the “Last two years” period to see as much as possible.
Now quickly see the equity shape.
- First of all, is it in profit?
- Is the trend pretty much constant?
- Can you find some very strange moments?
- How are the drawdowns?
With a little practice you will just need a little look to select the most attractive equities and discard the others.
Remember to always observe the equity for two years, because you need the most visibility in this case.
Below there are some examples of equity lines of good traders in our opinion.
When you find one worthy, go back to the Trader Search page, click the “+” button and add that trader to a list called “Best eToro Traders by InvestinGoal”.
Go on with the “one trader at a time” procedure.
In about 10 minutes you should have found at least 30 good traders to add to the new list and to move to the phase 3 of the procedure.
WARNING: Do not close the Trader Search page with the set filters and the new columns. You’ll still need them soon.
STEP 3 OF THE PROCEDURE TO FIND THE BEST ETORO TRADERS
First rule for success is being organized.
In fact, until now you have been working in an absolutely precise and organized way, with the ability to save the results in a favorite list.
Now that we have to go a bit more into details with the data analysis, there’s a new problem.
The Average Trade Size and Exposure data, those you can find on the Traders Search page, cannot be found within their personal profile.
So, we have to create a way to save and organize data in order to work efficiently and avoid constantly jumping back and forth to observe all the interesting data of a trader.
For this kind of things there’s nothing better than Excel.
Open a new Excel worksheet, organize the following columns and collect the data:
- Trader name (and URL)
- Profitable Investment
- Average Profit
- Average Loss
- Max Total Drawdown (manually calculated from the graph)
- Average Size (on Search Trader page only)
- Exposure (on Search Trader page only)
- Risk Score
NOTE: to collect this kind of data you should observe the longest possible period, therefore, set the time frame of the last two years.
Here’s an example of the result:
This could be the longest phase of the process, but I guarantee you that it’s worth it.
Clearly, there is no need to enter all the traders found in phase 2.
When you’ll open each trader’s profile to check the data to be added to Excel you can further evaluate the quality of their performance by observing all the other data.
In the Excel you’ll enter only those you like the most, maybe also those you are still not sure about and that you want to analyze again.
How to analyze the other data, and find the best eToro Gurus?
In that lesson we explain in detail all the data in the trader’s profile and especially how to use them to figure out whether or not he’s right for you (including the crucial “manual” calculation of the max Drawdown).
The procedure seems over at this point … but it’s not!
How to find tens of other Best People to Copy on eToro
Arrived at this point, you are able to follow a professional strategy to find the best eToro traders, based on a theory, and especially on specific values.
The downside of using precise search parameters is that you will inevitably leave out some traders who were at the extreme limit of those values.
So a simple trick to find dozens of other worthy traders is to repeat the procedure, but removing a filter from time to time.
Obviously, the values then must be checked even more carefully, to avoid bad surprises.
- REMOVE THE WINNING PERCENTAGE
Try to remove one time the 40% limit, and another time the 80% limit.
In the first case, consider that the validity of a strategy depends on the Average Profit and Loss, as well as the winning percentage.
In the second, all previously considerations about too high percentages remain, so try to figure out if the trader knows what he’s doing.
- REMOVE 10% MINIMUM RETURN
It may happen that, being in a drawdown phase, the performance of that trader in the last year is less than 10%.
But being indeed in a drawdown phase, therefore ready to get back on track, it might be the most appropriate time to begin to follow him (provided that all other data confirm the choice).
- REMOVE MAXIMUM RISK SCORE 6
Obviously, the more the value of the risk score is above 6, the more the situation must be evaluated with extreme caution. That doesn’t mean that you can’t find good opportunities.
- REMOVE 5% MAXIMUM AVERAGE TRADE SIZE
Same as above. It may be that just above that limit there are still good opportunities with still moderate and controlled risks.
Other tips for finding the best eToro Popular Investor
Here are some additional tips to refine your search.
Observe the daily, weekly, annual DD data on the trader profile, but knowing how it works. Understanding and analyzing the Drawdown is absolutely important.
With a little patience, observe carefully the trades’ details in the Portfolio – History section.
When did the trader open them? At what price? Did he have others already opened on the same instrument?
Yes I know, it’s boring, but you may be surprised of how many things you can find out with such a meticulous analysis. Keep it for the last step.
As a general rule, but not absolute, better to prefer traders who focus/specialize on few instruments (eg only on EUR/USD or GBP/JPY and maybe two other currency pairs, or only on major companies’ shares such as Apple and Google).
However, the opposite is also true. Some traders (a few) use very intelligent diversification strategies, investing in various instruments.
Social Trading is useful because it also allows you to take advantage of the direct experience of others.
Take a look at the Trader’s Feed page. See how he behaves, if he shares the reasons of his choices, if he proves to have a strategy, if he answers to his followers’ questions.
These things are important if you’ll decide to really follow him.
By far the most important of all.
EToro provides an Unlimited Demo Account, therefore, take advantage of it as much as possible.
Add the traders that interest you in the demo account and test everything.
Especially, test the actual values that will be invested by the trader for each transaction. You can do it when the trader opens new trades, seeing the “Amount” value from your profile or from the eToro WebTrader.
We talked about Average Trade Size early on. As we said, it’s calculated by observing the Amounts values. Now you can check if, on average, the values are in line.
If they are not, and the Amounts of the positions you have replicated are higher, maybe a lot higher, then it means that the trader widens the stops after opening the trade, and this is a major danger clue, because you might think you are risking 1, while perhaps in reality the trader is making you risk 10.
Tips found on the web … that I don’t understand
While writing this post I also did a search on the web to see what other websites were writing.
I came across some tips whose logic I didn’t understand. Let me show you them so that you can reason with me.
STRANGE TIP #1: Preferring traders that make a lot of operations.
Honestly, I don’t care of “how much”, but I care a lot of “how”. Given the fact that too many executed trades can be indicative of risk (scalping), for me, a trader can also operate little, what’s important is the performance and how he opens those traders, according to which strategy.
What certainly matters is to have data of at lest one year.
STRANGE TIP #2: Avoiding those traders that copy others.
If one is a real trader, he’s also able to recognize another real trader. If I find a good trader that, in addition to his operation, also follows someone else’s, I do not see any problem.
The important thing is he doesn’t overdo it. Indicatively, I don’t exceed the 20%, but even in this case it depends.
Based on investingoal