As I continue my investing journey, in order to build our wealth and create income streams, researching other options is imperative. To create multiple income streams takes time and knowledge. Knowledge is power, right? So, I have been research this week about other trading options.
I recently came across eToro, which is a social trading platform which is becoming increasingly popular. eToro is a leading online social trading network. But, what does that mean?
The purpose behind the social trading platform is to make trading in stocks and shares much more transparent that it is at the present. Seemingly, only a select group of people are in the inner circle when it comes to trading. eToro is trying to make that much more clear to the everyday, regular person who might want to begin trading in stocks and shares.
Like with any social media account, you can follow, communicate and copy what other members are doing. If you follow a member, in the same way as you would with other social networking sites, you get updates when they post. So, when a member invests in a certain stock, then it would appear on your timeline. So, you can see in real time when other investors are doing!
Also, you can look at the top, most successful, traders that are using the platform. You can look at what their portfolios are, how well they are doing, and can, if you want, try to emulate their success. There is a section called the Popular Investors program, which rewards the most active successful traders in the community. You are only allowed to copy the Popular Investors so this should reduce the risk. There are also monetary benefits if you manage to become one of the Popular Investors.
Looking at the community, one member that stands out goes by the same of Jaynemesis. He currently has 85.35% profits from the last 12 months, which seems huge! His investing strategy is currently being copied by 249 different users around the world.
He appears to mainly trade in crypto currencies (Bitcoin and Ethereum) and technology stocks as that is his background. Bitcoin is a form of digital currency, which means it is created and held electronically. Apparently, Jay came across Bitcoin when it cost $12 a coin, but the currency is now worth over $1,000 a coin. That’s quite an increase! He spends around 2-3 hours a day on eToro including discussing strategies with other investment enthusiasts.
I think that looking at the social side of it, being more transparent about trading and investing can only be a good thing! I have mentioned before about how investing seems to be some elusive thing that only the rich can be a part of. I am trying to show via this blog that it isn’t the case. However, eToro seems to be doing much than that; you can see in real time what other investors portfolios are doing and trying to copy their success.
Obviously, as with all trading, there is some risk involved but you can set what risk you would like when you start. So, if you want more low risk, then you can set it as such. You do need to remember that you could lose money as well as gain it, so you do need to be careful.
I think this new kind of platform could be the key to getting lots of people investing, even if it small amounts. The fact that you can see other member’s portfolios and see what is working well for them is good too. There is too much hidden in the world of investing! Hidden behind complicated jargon and closed doors. eToro seems to be trying to do the opposite, which can only be good.
Have you heard about social trading? Does it sound like something you would try?
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I would go so far as to say that eToro has nothing to do with ‘investing’ as it’s trading and it is very risky.
I’ve had my eToro account for over a year now. I was drawn by all those things you mentioned, ie the social thing, real time aspect etc. Also the deposit bonuses (which I’ve found you can’t withdraw).
After playing about with a virtual account (which was fun), I chucked in real money but I’m unlikely to get all of it back on this venture ultimately. The ‘popular investors’ get commission from the number of followers they have so have little incentive to actually do well once they’ve got a passive income stream – some end up taking more and more risks as they will still make profits from their followers. Many people just follow blindly, ie they just follow someone who’s popular, which bumps up the numbers.
The usual ‘past performance is no indication of future performance’ is very apt here – people I’ve followed who did well at first are not doing so well now.
I’ve not logged onto my account for a while, not decided when to cut my losses.
I haven’t blogged about this either as in truth, I’d prefer not to draw attention to eToro, in case someone who doesn’t do their own research ends up losing money…
Good luck if you decide to check it out!
Thank you for your very candid observations. I have been reading the investing threads on the MSE Forum for the last 16 months as I develop my own understanding of investing and one of the key lessons is not to follow the dead. The principle is that once the general public know about something it is probably too late to join the trend.
I rarely disagree with Nicola but this isn’t one I shall be hurrying to follow, again because these are unknown trend-setters, rather than proven fund managers). My own investments (tiny as they are) are based on funds rather than shares at this stage (reflecting my own lack of expertise). And I carefully evaluate performance versus fees and management charges