eToro - risk management

By clicking on the button to copy a trader, a window appears. You can choose to use this time of real or virtual money and select the amount of money you want to allocate to this trader.

The following restrictions apply:

- You can allocate a maximum of 20% of your capital to 1 trader

- You can copy a maximum of 20 traders in your account

eToro risk management

You also have the option to copy all of a trader's currently open trades. The default selection copies the open trades with the same parameters (Stop Loss, Take Profit, position size), but you can disable this option.

The trades are always copied to your account in proportion to the funds allocated to the trader, that is to say that if the trader risks 2% of his account on a trade, 2% of your allocation will be risked on this trade. Risk management of your fund allocation is therefore totally dependent on the trader's risk allocation. But in general, you manage risk in your eToro account by allocating a small percentage of your capital on each trader. The traders manage risk using a stop loss on each trade. When they modify these stops to increase or decrease the risk, these changes are automatically copied to your eToro trading account.

You can track the performance of open positions (either the traders' or yours) using the WebTrader interface available on the OpenBook social trading network (see image below). The WebTrader trading platform is similar to other forex brokers' commonly available trading platforms, it is available in real or virtual money mode.

For example, when you allocate $1,000 to the trader pyruss, if the platform shows "amount $76.41 of $1,006", this means that currently open trades risk $12.76 of the capital you have allocated to the trader. Net profit and percentage gain are linked to open positions. You can see each position that was opened by the trader and if you wish, you can close the positions from this screen.

Pending orders can be consulted in the "Orders" tab, the "History" tab displays trades that have been completed over the last year.

eToro WebTrader

In short, eToro tries to simplify the management of your account and risk. By limiting the amount that you can allocate to each trader (20%), eToro immediately limits the maximum loss you can incur (by following a trader) to 20% of your capital. The trader manages risk himself in terms of the amount of money you have allocated to him, so it's up to you to assess the level of risk of this trader's strategy by looking at his profile or by testing it in your demo account. You can examine the total performance of each trader that you are following via the WebTrader interface and see his trading history over a one-year period to accurately assess his long-term performance.

eToro is a multi-asset platform offering both equity and crypto-asset investments, as well as asset trading in the form of CFDs.

Please note that CFDs are complex instruments and present a high risk of rapid loss of funds due to their leverage effect. 75% of retail traders' accounts lose funds when trading CFDs with this supplier. You should ask yourself if you understand how CFDs work and if you can afford to take the significant risk of losing your money.

The content in question is provided for information purposes only and should not be considered as investment advice. Past performance is no guarantee of future results. The trading history is less than 5 years old and may not be sufficient to serve as a basis for an investment decision.

Crypto-actives are volatile instruments that can fluctuate considerably over a very short period of time and are therefore not suitable for all investors. Other than through CFDs, crypto-active trading is not regulated by any EU regulatory framework and is therefore not supervised.

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