09 Mar How to Make Money Fast on eToro
Back in August I decided to join eToro to see if I could make money with it. I really enjoy using it and I’ve invited several of my female friends and now we’re all a bit addicted. If you want to try it out, use my sign up link here to get $20 on your first deposit.
Trading has typically been more of a guy’s thing but it’s cool to see more ladies learning about investing their money. As I started to mention that I was trading on eToro and buying cryptocurrencies, I was surprised at how many people I know are also doing the same thing in their spare time.
If you’re curious about how to make money on eToro, here’s my guide:
What is eToro?
eToro is based in the UK and it’s basically a social trading platform. What this means is it’s a bit like a social network – you can post what’s on your mind in the news feed a bit like Facebook and you can see what others are saying about a particular stock. It can be really useful because you can get tips from people who know a lot about trading but it can also be dangerous because you read a lot of crap too from people who know very little about trading.
You can pick things like CFD stocks, currencies, indices, commodities and cryptocurrencies to trade. Simply deposit money into you eToro account and you can have a slice of Amazon, Apple, Bitcoin or whatever you’d like to trade.
Perhaps the most exciting thing about eToro is the “copy trader” feature which allows you to copy successful traders. You copy other people on eToro, which will allow you to copy their entire portfolio. If they do well, you do well also.
Why use eToro
I like using eToro because it has a clear and understandable interface, allowing you to open trades yourself. It has graphs and charts that are easy to understand, along with some useful information such as whether the stock is a strong buy. You don’t have to be trading with large amounts of money and you don’t have to deal with brokers or anything like that.
Best of all, eToro makes it easy to open a trade at the click of a button and you can open trades with relatively small amounts of money – $50 for stocks and $25 for currencies, commodities and indices. The downside of course is that it’s very easy to close your trades too, which can make it easy to make some knee-jerk decisions. The app allows you to add items to a watchlist and to copy other traders who know what they’re doing.
To make things easy, eToro allows customers to make deposits using a wide variety of methods such as credit card, debit card, PayPal, wire transfer and Skrill. You can see the full list here.
How to start trading with eToro
First you’ll need to open an account and get verified. Make sure you’re verified, otherwise you might have some problems with withdrawals etc. Once you’ve done that part, it’s time to start practicing with your “Virtual” account.
Your virtual account gives you $100,000 in “play” money, so you can use the platform without taking any real risk. Open a few trades and learn the ropes first to see if you start making any money.
Once you’re ready to start trading, use your “real” account and deposit some money using the allowed methods.
If you’re new to trading then I advise that you copy people to avoid making mistakes. If you click “Copy People” in the sidebar it will take you to a page where you can search for people to copy. eToro has an “editor’s choice” list as well as an organised list of “top investors”. You can also use the search function to really narrow down what you’re looking for.
Here are some of my favourites to copy right now:
@wesl3y @MrThor7734 @jaynemesis
How to copy someone
When you copy someone, you can choose the amount you’d like to copy with and also whether you’d like to copy “open trades” (all the trades the person has open) or just new trades. Most traders will advise you to copy all open trades while others will say just copy new trades from the date you’ve started copying.
Some traders have a recommended amount to copy with so you get the best effect. You can see this on their profile or ask them directly.
When you open your copy, your money will be split amongst the trades. Minimum trade opening is $1 so anything below that wouldn’t be picked up. That’s why it’s always best to check what the minimum recommended copy amount is.
At any point you can manually close an individual trade or close your entire copy. You can also set a stop loss for your copy to ensure you won’t lose all your money if the trader starts losing.
Trading on your own
The main thing to learn with trading is buy low, sell high. Always remember this. When you’re ready to buy, just click “Trade” and a window will open. Select the amount you want to buy and then edit your stop loss and your take profit. Once you’re done, click “open trade”.
Stop loss – Your trade will close when it hits this amount. Basically stops you from losing too much money.
Take profit – Your trade will close when you have reached this amount of profit.
If the stock market is closed then you can set what’s known as a “buy order”. This means your trade will be opened at market rate when the market opens. Simply enter how much you’d like to buy, edit your stop loss and take profit, then click “Set Order”.
See how there’s a box in the middle that says “X5 leverage?” Leverage basically allows you to trade with more money than you actually have. You can edit this price to 1X leverage, 2x leverage, 5X leverage etc.
Here’s a quick explanation of leverage:
I invest $100 at 5X leverage. Now I’m trading as if I had $500 instead of $100, which means if the stock goes up I’m making more money. However, because I’ve essentially “borrowed” money I don’t have, I can lose my money much faster. A small dip can cause you to be down a lot more than if you had used 0 leverage. Be careful, as leverage can easily cause you to lose your money fast.
How to make money fast on eToro
If you’re asking this question then I’m sorry to say that if you make money fast, you’re also likely to lose it just as fast. It’s a marathon not a sprint and there is no fast action in this case.
If you want to make money fast then you’ll have the biggest chance of doing so if you trade cryptocurrencies, some of which will suddenly double or even triple overnight. People who put their money in Ripple (XRP) when it was at 0.2 were very happy indeed when they woke up to find it at 3.0!
eToro just added Stellar (XLM) and (NEO) which in my opinion have a very good chance of increasing their value this year. But that’s just my opinion.
Of course cryptocurrencies are very volatile and you’ll see lots of talk about it being a bubble, so it’s a risky business. However, the returns can be quite substantial. If you’re not used to the volatility, best to put your money in it for the long-term and hold or HODL as some people call it. Whatever you do, don’t panic when you’re in the red. Close your laptop, make a cup of tea and relax. And don’t try opening a “Sell” position as in my experience it is just too volatile for that.
If you’re not keen on buying cryptocurrencies then I’d suggest copying some traders who have shown very nice returns for the past year.
You could also use leverage when investing in stocks or commodities to increase your gains but using leverage comes with higher risk.
Common mistakes I see people making on eToro
Opening a “sell” position instead of a “buy” position.
If I had a dollar for every time someone posted the following I’d be a very rich woman:
“I opened a position and the crypto is going up and yet my money is decreasing, I don’t understand?”
Cue dozens of people commenting, “You’ve opened a sell position!”
Don’t be one of those people. When you open a trade you can see “Buy” and “Sell” across the top. Make sure you’ve opened a buy position, if that’s what you mean to do. I have tried selling but it can be much more risky so only do so if you know what you’re doing.
Getting caught up with the “to the moon” chat
The cool thing about eToro is that it’s a social trading platform so you can see what people are saying about a particular stock or cryptocurrency by searching the hashtag. The problem with this is that it’s easy to get caught up in the hysteria and listening to people who don’t know what they’re doing. The top traders are worth listening to but even then, they sometimes get it wrong. Trust your gut and don’t follow the heard mentality. One minute people will be shouting “To the moon!” or “I’m gonna buy a Lamborghini!” and then the next minute they’re saying stuff like “It’s the end of crypto, we’re all doomed, sell now before it’s too late!” By listening to this type of chat it can cause you to make rash decisions.
Not testing out the virtual wallet
If you’ve never traded before then eToro allows you to practice with fake money in a virtual account. This is a fantastic opportunity to learn the ropes without losing any real money. But so many people open an account on eToro and then instantly start practicing with their own money instead of testing the waters first.
Letting emotion take over
When trading your emotions can easily take over. If you see you’re suddenly 20% in the red and your stock is down it can be quite scary to realise you are losing money. Remember, you only realise that loss if you close! You could easily make a rash decision based on emotion and close your position, then find that stock bounces back up a few weeks later. Doh! The key is to pick stocks that you believe in long-term, then try not to check your account too often. Investing for the long term is safer and will usually get the best results.
Not having spare funds
On eToro you’ll often hear talk of “buying the dip”. If you have some spare funds in your account that haven’t already been invested, you can buy any dips in the market. Say for example you have money in Apple and you were doing well but now there’s been a dip and you’re down 8%. If you believe it’s just a dip and it will go up again, you could buy more at this cheaper price, allowing you to recover some of your losses and make even more cash when it goes up again. I have made the mistake of using all the money I have and then not having enough spare cash to buy the dip.
So there you have it, my guide to making money on eToro. Personally I think it’s a fantastic platform and it has allowed me to make more money than I would if I put my savings in a bank account. It’s possible to make lots of money fast on eToro – I have seen it happen. Just look at some of the top traders who have 200-300% returns for the year. Of course higher returns usually come with higher risk but as long as you know what you’re getting into then you should be OK. So. Start off with copying a few people and then perhaps build yourself up to trading yourself! There’s a saying that money can’t buy you happiness, but it can certainly make your life more comortableso anything that helps you increase your monthly income is always a good start.