eToro launches CopyTrader

eToro continues to innovate with CopyTrader, a new function in the OpenBook social networking platform. CopyTrader allows a user to follow other successful traders on the eToro social network. This is a bold move by eToro — they are one of the first brokers in my knowledge to allow such a feature. Social networking is here to stay and those who embrace it will come out ahead. There are several players who are leading the social networking/trade following aspect in the Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term markets— we’ll analyze 3 of them today for our readers.

There are a couple of reasons CopyTrader stands out. eToro provides the social networking platform for its own brokerage clients and, as a result, has much greater control over execution. According to Yoni Assia, CEO of eToro, “We have systems in place that are committed to minimal slippage and should give the investor the same P/L as the original trader.” From my own personal experience of talking to countless traders, it is quite common for a system / manager to show profitable results in their live account, but not in the investor’s account as a result of slippage, spreads and Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term. Currensee for instance is an Introducing Broker amongst other things and relies on multiple brokers as clearing partners. When an investor follows another trader using CopyTrader, he/she can be assured there is another human being on the other end placing trades and not an automated system. Assia adds, “Investors using our system can have a real person trading their funds. They can leave comments or see comments left by other investors for any particular trader. This makes the trader more responsible for their trades and creates an environment of trust.” Lastly, eToro has decided not to charge any fees for investors using their CopyTrader function. Investors only pay the spread during execution and no other management or performance fees. eToro is basically offering a managed account program without the high fees.

* eToro may have systems in place to minimize slippage however eToro is a market maker and cannot guarantee better slippage than other platforms.

** Execution subject to slippage, broker spreads, volatility or other market conditions.

Client retention is a big issue in the forex industry; I see this latest move by eToro creating a win-win situation for the company and its clients. I know other players are not far behind in launching similar social networks. eToro will need to capitalize on this edge as quickly as they can.

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