Its not a secret that forex trading is one of the most popular methods to earn a substantial income working just a few hours a day. It is also a fact that many expert traders not only earn money trading forex, but also earn through selling forex signals. Some high end companies even manage large forex investment accounts for a service fee or on revenue share basis. However put, winning trading systems and trading signals are worth a lot of money. But Etoro, one of the most popular forex-online-trading brokers has open the doors to copy other traders and selectively follow their trades with an innovative system called “Openbook.”
With just a click of a button, you can follow almost any trader you deem successful. But it certainly helps to do some research before starting. The included ranking system is quite useful, but be warned; only closed trades are taken into account for ranking purposes. I personally have seen some traders keep several losing trades, even over weekends for the sole purpose of maintaining their track record.
If you somehow happened to chose one of those traders who win at rate of 100%, be prepared to maintain high draw-down levels in exchange for trades closing in low profits. Because their take-profit levels are bare minimum and usually they don’t have a stop-loss (if they have any SL, it would be multiple times larger than the profit margin). So with a little bit of technical analysis and natural fluctuation of the instruments, trades usually trigger the take-profit levels.
Then there are some truly successful traders who naturally don’t mind having the odd losing-trade. These sort of traders have a winning ratio around 90%. But the winning ratio alone is not a sufficient yardstick. Its also important to assess the smoothness of their growth chart, number of current open trades and so forth.
The burning question is how to find perfect traders within the Etoro Openbook system? Sure, its not easy. But certainly not impossible. A good rule of thumbs is not to put all the eggs in one basket. Its obviously a low risk approach to copy 4-5 traders who has a good reputation given that you constantly monitor your trades. Remember, monitoring the trades can substantially improve profit levels.
Another brilliant strategy is to find traders who trade smaller time frames 15min-4hr. This is helpful in maintaining a low draw down, because trading on longer time frames (more than 1Day chart) can hurt smaller accounts with heavy draw down at times.
Overall, Etoro’s new social trading platform – Openbook rocks in the sense that the average person don’t have to worry about all confusing technical or fundamental chart analysis any more. If you select the right traders to copy and manage your funds correctly, you can be absolutely certain to make lot of profit by trading forex on Etoro’s Openbook.