You’ve probably heard of eToro through their really clever and witty YouTube ads, advertising about making money through trading or investing in stocks, or cryptocurrencies like bitcoin and ethereum.
With that said, can you actually make money on eToro?
Yes, you could make money on eToro. But at the same time, you could also lose money on eToro. That’s pretty much trading and investing in a nutshell— there will always be risks regardless of how safe you are with your trades and with your investments.
But how about making money by copying the best traders?
Same answer as the previous question.
No matter how long a certain copy trader has been trading already on eToro, there will still be risks, and profits will never be guaranteed.
Heck, even the legendary investor Warren Buffett lose money from time to time, what more for the far less experienced traders and investors on any platform?
So, what should I do?
The fact that trading and investing has risks shouldn’t really steer you away from learning though.
In the end, even having a normal day job and starting a business has their own risks. There’s always a risk of getting fired in your job if you didn’t perform well, and there’s also a risk for going bankrupt with your business. Nothing is guaranteed in life and there will always be risks.
Should I trade, or invest?
It really completely depends on you. If you want to learn to trade, then sure.
Take note though, most traders lose money. In fact, with eToro alone, it is said that 75% of retail traders lose money. If we do the basic math, yes, only 25% make money.
But should that stop you for trying?
Based on one of the articles by Fundera, in a 10-year timespan, 70% of small business owners fail. That’s also a huge percentage of failure, but that statistic shouldn’t really stop you from trying to be successful.
If you really want to learn to trade and actually be successful with it, you just need to put the time and effort. Just as with any other skill or profession.
On the other hand, if you want significantly less risk and try to earn money in the long term— by merely just being patient with your investments, and doing other stuff instead, like starting a business or having a day job. Investing is pretty much the “buy and hold” strategy.
If you don’t have an eToro account yet, you can easily sign up here:
Disclaimer: 75% of retail CFD accounts lose money. Trade with caution.
Some quick tips for beginners
Don’t start with a huge amount of money
If you want to potentially lose huge amounts of money right off the bat, then sure immediately deposit huge amounts of money.
Preferably though, especially when being brand new to trading, it’s heavily preferably to start with only a small sum of money. An amount that wouldn’t hurt you mentally and emotionally if ever you lose every single penny of it.
Fortunately, eToro has a Virtual Portfolio feature whereas they’re going to give you $100,000 as play money, for you to be able to trade around and just get a feel of how trading works without risking any money at all.
Read. Read A LOT.
It’s going to be quite tough learning to trade if you’re just going to go in blindly and make random trades here and there.
Yes, even though eToro has a virtual portfolio feature hence you’re not going to lose any money anyway, it’s still preferable for you to do your research first so you actually know what you’re doing with your trades.
This also applies to investing. It will heavily give you an advantage in knowing how to pick stocks based on the company’s fundamentals, compared to the investors that just blindly buy stocks they think will increase in price.
Though going the extra safe route and instead of buying individual stocks, you instead buy ETFs like Vanguard’s VOO and VTI or any S&P 500 ETF, it’s still great to do the research and know what you are buying and what the risks are when you buy ETFs.
If you like reading books, some great ones concerning investing include:
- One Up On Wall Street by Peter Lynch
- Rule #1 Investing by Phil Town
- The Intelligent Investor by Benjamin Graham
Controlling your emotions
Probably one of the main reasons people lose money with trading and investing: making trades with huge emotional influence. Even the intermediate traders have the problem of having emotion-induced trades from time to time, one of the most frequent being panic selling when the price of a certain asset is going on a nose-dive. And yes, we’re also guilty of this.
In the end, though panicking could actually help you lose less money in the end, it’s mostly still best to have a solid well-thought strategy, and sticking with it.
Have a solid work ethic.
Even if you’re only doing trading or investing in the sidelines while you run your business or go to your job, it will still help you greatly if you set yourself the goal of doing a bit of reading daily, or maybe a few times a week, completely depending on your schedule and how busy you are.
This doesn’t only apply to trading and investing, but with life in general.
Whatever method you go with, may it be trading or investing, always remember that we’re talking about money here. Not sure about you, but I wouldn’t want to lose my money, so make sure to dip your toes and check the waters first before fully diving in.
Best of luck, and happy trading/investing!