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Evaluate eToro Investors

who to copy?
EtORO pOPULAR iNVESTORS
Investor's Profile

The investor's profile contains the investor's biography on the right top side. This text is personally written by the investor, sheds a light on the investor's strategy and objectives, but also provides recommendations regarding copying open trades and the recommended amount to copy them. In the profile overview you also get an overview of their personal news feed, and what they have contributed to the overall eToro news feed: likes, comments, insights,...

Stats
Risk

Therisk score is a measure for the risk appetite of the investor and is based on eToro proprietary calculations.

The score lays between 1 and 10. The more risky the investor, the higher the risk score. Recall that higher potential returns come with higher risk scores. Nonetheless, too much risk is straightforwardly stupid.

Daily, weekly, or yearly drawdown is a mathematical measure that records the maximum loss that the investor has suffered in respectively a day, week or year. Usually the higher the risk score, the larger the drawdown.

... & Return

Another measure displayed in the stats overview are the past returns. Note that the sum of the monthly returns, do not equal the displayed yearly performance, as a result of the effect of compound interest.

Additional Stats​

Additional stats give even more insights on the investor's behaviour on the platform.

Who To Copy

This questions is rather difficult to answer without mixing in my personal opinion. Nonetheless I will try to give some guidelines which I think are generally spoken true:

  • Any strategy is good, as long as there is a strategy. Investors and traders will more than once have different opinions, and different approaches. This is not bad. However, I think an investor should always be able to rationally explain why he makes certain choices. Plus he should stick to those choices and strategy even in difficult times. Nothing is worse than an investor overloaded with emotions. 

  • Return should match the risk: An investor with a high risk level, but with a return that matches the average of a lower risk level is no good. Vice versa, investors with higher-than-average returns for a given risk level should be praised.

  • Consistency and track record: A good investor is someone with a rather consistent track record. Someone making -25% one year, and +100% the following seems to me as someone who doesn't know what he is doing. Obviously, someone with a higher risk profile, will have more variations in his returns, as long as those swings remain overall reasonable. 

eToro Popular Investors

In order to stimulate safe trading and to help copiers to choose safe investors, eToro has launched its Popular Investor Program. The program invites traders to open their profile for copying, and impose strict rules that stimule safe trading.

  • Identity verification

  • No risk score in the past 6 months beyond 7

  • Stricter leverage restrictions

And as such, Popular Investors are usually better choices for copying than random investors.

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