Trade with me on eToro

I have been trading with eToro since 2016 and have found eToro to be great way to scratch the trading itch without having to risk large amounts of capital. 

You can start by registering with eToro. I recommend starting with a minimum deposit of $1,000 and using the 1% risk rule of available capital; this means if your starting capital is $1,000, then your first trade will risk $10.

Yes, just $10...

So in risking $10, what is the initial position size to use?

First you need to change the eToro trade ticker to use just x1 leverage. In some cases, it may be necessary to increase your starting balance to trade certain instruments.  For example, to trade EURUSD at x1 leverage requires a starting capital of $1,000 - so your first trade would risk 1% of $1,000 or $10. 

Start bc changing the Trade Ticket to just x1 leverage:

Next, select the Stop Loss and then AMOUNT

Put in your $10 for AMOUNT.  Beneath the Amount value is the rate at which this amount of risk corresponds too. 

Make sure the RATE price is lower (for a long position) or higher (for a short position) than what your analysis suggests for a stop.  At this point, you may be able to try a little leverage (e.g. x2) as long as the Rate given for your absolute amount risk does not violate the stop price you want to use. 

The Golden Rule is to only ever risk 1% of available capital.

If you can follow the Golden Rule you can never burn your account to zero. Why? By following the Golden Rule, you will reach a point where you can't put on a trade because you won't meet the minimum requirements for a trade.  At that point, your goose is cooked and you should just close your account and withdraw the remaining funds.

However, there is one key exception to this...

If there is an external shock to the market which causes a gap in the market. Then your losses can be exposed above the 1% threshold. If you manage your trade amount and maintain a low leverage you can mitigate against this, even if this means a larger than expected pain. Whole companies (Alpari UK) went down on these shocks, but your account doesn't have too.

Start by trading assets like FX which have tighter spreads, DAX is good too, at x1 and x2 leverage and don't go beyond x 25 leverage, but always stick to the 1% capital risk rule.

Never let a trade lose more than 50% of the capital size of the trade. When you copy traders it's not uncommon to see traders rack up 300% losses, albeit on a $2 trade, but it's bad practice.

Use price alerts to track your stops. Etoro has some wide spreads and these can quickly knock you out of a position without realizing it. 

If you are looking for ideas, follow my postings on Stocktwits or Twitter for independent opinion.  I track the S&P, Nasdaq and Russell 2000, the sector SPDRs, and Bitcoin.  I don't track individual stocks as they tend to be too niche for most subscribers.  If you are looking for sample trades in these instruments with suggested stop prices, join my premium Stocktwits room

Be Realistic...

You are not going to achieve 10% or 25% gains a month; if you achieve 10% a year you will be outperforming 80% of professional traders and hedge fund managers.  For a $1000 account that is an annual return of $100. This may not be much in real terms, but if you can achieve this and want more, then look to increase your available capital to trade - but don't look to increase your risk. eToro regularly run Deposit Bonuses for new and existing members throughout the year.

As a final note, do not copy anyone who promises or sells to you a return on a monthly basis. That's pure BS which will see your account turn to $0 in weeks.

Remember - Golden Rule - 1% of available Capital.  No cheating!!!

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