Trading - from Self-Trading to Copying Expert Traders?

Zoma on 07/01/2021 - 11:14
Last edited 07/01/2021 - 15:48 by 1 other user

Hey everyone,

So I decided to start trading at the beginning of 2020. I had $10k as a side money. I kept reading & kept putting in money on the stocks. After one year, I have lost $3k in total. I guess, I am not experienced enough and also I feel like my stop loss strategy has also put me in disarray.

Now, after losing $3k, I am thinking of start using eToro, social trading platform. I have done some research. I am thinking of putting my rest of $7k on some experienced traders who have years of research & experience under their belt. I am thinking of diversifying my $7k among top 5 traders, after seeing their portfolio.

I have been copying people with virtual money. All of them gave me positive results, one even gaining me 170% over 6 months. Most experienced ones (who don't trade in cryptos) have also returned 33%, 17% & 9% over 6 months.

I think, this is reasonable data to believe that rest of my $7k will be safe with them & I will be able to regain my lost $3k first, and then go from there.

This sounds so ideal, that's why I am a bit confused.

Can anyone share their experience/ideas on what I am thinking is right or wrong?

Thanks.

Financial

Comments

  • holdenmg on 07/01/2021 - 11:24

    Hi,

    You won't learn much by delegating your Share Investing to others.

    If one of the five (or all of the five) produce returns, you won't know "how" unless they are going to share details of the Portfolio buys/sells with you and you develop an understanding of their reasoning both good and bad for their choices.

    Also, dispersing $7K over 5 traders is only going to diminish your returns because you would only have $1400 per trader. So, spread too thin and even if one does well, you won't see much of it.

    • Zoma on 07/01/2021 - 11:25
      +1

      I understand. I don't want to learn trading. I just want to make some money lol. Hope you get what I am saying. Because I have full-time job too, so I don't want to work overtime reading about stocks and stuff.

      I can read their eToro profiles to learn how they think what they think, but all I care is they make me some money while I sleep.

      Thanks.

      • holdenmg on 07/01/2021 - 11:39
        +1

        Sure.

        What are these traders returns over 6 months, 12 months, 3 years, 5 years?

        What is your investment time frame and what risk do you want to take?

        I get that you want to make money.

      • njastar on 07/01/2021 - 12:54
        +1

        Just put your money into some ETFs and set and forget it. They follow the market, and there are some that are tailored to specific industries if you want to be more specific. There's some crazy stat that 90% of traders lose money, either you put in the effort to become part of that 10% (which is probably not possible for most people), or just put it into an ETF. The S&P 500 index fund has historically risen 10% on average a year, you can't really beat that.

      • GourmetFoodie on 07/01/2021 - 20:37
        +1

        Let me share some life advice with you -

        There is no easy legitimate way to make lots of money without putting in the hard yards.

        Trading is a full time job for a reason.

        Trusting anyone else with your money has serious risk.

  • Ocker on 07/01/2021 - 11:25
    +2

    An "expert trader" is only as good as their last trade

    • Zoma on 07/01/2021 - 11:26

      They have been trading for 10+ years and eToro has recorded their returns over the past 2 years, which I think cannot be faked. eToro is trustable platform (heard from everyone).

      • avoidfullprice on 07/01/2021 - 11:32

        Zoma I think you are missing Ocker's point.

        Have you looked at stats of traders who did well prior to 2020, but tanked on 2020?

        • Zoma on 07/01/2021 - 11:33

          Yes, I have had a look at their stats prior to 2020.

  • thetrain on 07/01/2021 - 13:12
    +1

    Do you want to trade (short term) or invest (long term)?

    Stocks/options/FX/commodities/crypto?

    Be aware that the overwhelming majority of traders lose money
    Also it isn't hard to gain 17% and 9% in 6 months as the market has been booming since late March

    If you're aware of these risks and have done your research then you can try copy trading, but accept that you may lose more of your money.

  • Drakesy on 07/01/2021 - 13:30
    +1

    I learnt the hard way back in University and now know what to do.
    Luckily i only halved my money on paper (though it took it 6 years to come back into positive territory.)

    Basically share trading penalises those that are impatient.

    Learn yourself with ~$2500 trades, if it falls buy in at a lower price, if it goes up then count yourself lucky

    Depending on how risk averse you are hit up some ETFs and let it rip.

  • Baysew on 07/01/2021 - 15:40

    Article from Sydney Morning Herald explaining what exactly "Copy Trading" is and some of the pitfalls. -

    Sock puppets and Lifeline ads: Welcome to the wild world of copy trading

  • whooah1979 on 07/01/2021 - 17:00
    +1

    Social trading works, but the gains are limited. The traders have to keep their risk profile to x and will be removed from the copy programme as soon as they hit y. This means that their gains and losses are controlled by the platform.

    Learn the basics by following them and their position allocation (long vs short and %). Do that for a few months and copy them without using the copy option. This will ensure that the user is in full control of their risk profile.

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