The following guest post is courtesy of eToro, a leading social trading and investment network.
The internet revolutionized the way that millions of people access the global financial markets and invest their money. It takes just minutes to sign up to an online broker and open a trading account. There are hundreds – if not thousands – of brokers advertising for clients and offering all kinds of tempting bonuses and deals. People with no financial experience are often encouraged to immediately invest in a bewildering variety of stocks, forex (currency pairs), commodities, indices, ADRs and ETFs.
One of the most important decisions that any new investor will make is which broker to trade with. There are some major dos and don’ts to follow when you start looking for your financial home.
- Don’t sign up with an unregulated broker.
- Do check to see if the broker is registered on the CySEC and FCA websites.
- Do take time to study peer reviews and trader feedback.
- Do look for openness, transparency and social trading.
Social Trading and Making Money as a Popular Investor
eToro is the world’s leading social trading site and offers some major advantages to traders of every experience level. Social trading connects all eToro traders to each other, encouraging them to talk about the markets and work together to develop the right trading strategies. The most successful traders inevitably attract others who want to copy them, becoming Popular Investors. They then earn extra money according to how many traders copy them. It’s possible to set your trading account to automatically copy experienced Popular Investors, replicating every trade that they make.
eToro’s Popular Investors are always happy to share their experience with other traders and explain how they came to be effective investors. We’ve brought together some of eToro’s best known Popular Investors and asked them for some tips about online trading and investing.
Dos and Don’ts for online trading
Running-Chris (Christian Wittig) is a Popular Investor from Germany. He trades only their when he thinks market conditions are right and specialises in the GER30 index and major currencies.
Running-Chris gets straight to the point with two fundamental dos and don’ts:
- Don’t be greedy
- Do be patient
These are basic starting points that many Popular Investors build their entire trading careers on.
One of eToro’s best known Popular Investors is misterg23 AKA George Thomson. He invests mainly in stocks, balancing his portfolio with a smaller number of higher risk assets such as indices and commodities.
misterg23’s dos and don’ts are built on his own trading experience:
- Don’t expect returns overnight.
- Don’t move your stop losses.
- Do your research, both in terms of people and assets.
- Do have a diversified portfolio.
- Don’t just copy someone because they have the most copiers.
NORTrading (Haakon Fuglaas) was recently featured in the Norwegian media. He has some useful insights for social traders:
- Invest in yourself. The best investment you will ever make is in your own financial education.
- Accept that you are going to be wrong most of the time. By doing this, you can more effectively cut your losses short and remain disciplined.
- Exercise emotional control. Lack of emotional control is one of the reasons most traders fail in the markets.
- Look at the big picture before placing a trade. This often helps you hold on to your winners longer.
- Stick to your plan. Write down a trading plan and stick to it!
This post is not investment advice. CFD trading bears risk to your capital.
Past performance is not an indication of future results.