Have you just opened and consulted the profile of an eToro Trader (or an eToro Popular Investor)?
Did you just realize in eToro there are a lot of useful data to be analyzed to see if the trader is really good and if he suits you?
Did you find it difficult to understand how those data work and how to interpret them?
Don’t worry, you are not alone.
If you want to figure out who the best traders are and how to possibly find them yourself, then here’s our guide: Best eToro Traders – Who are they and how to find them.
(Would you like to find out more about how eToro works? Read our how to use eToro guide from the beginning)
If instead you have already found some interesting traders, and you would like to study in deep his data and performance, then stay here.
Finished this post you will be able to view the profile of any trader and ride with his data like a pro.
But above all, you will be able to get a professional opinion about his real capacity.
Let’s get started.
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The home page of the investor’s public profile comes with a top fixed area, and three sub-pages: Feed, Stats and Portfolio.
Name and Photo Section
The investor’s photo is used to identify him, since sometimes traders (coincidentally but also on purpose, trying to be copied by those distracted investors who were looking for a particular Popular Investor and didn’t notice the little difference) have similar names.
All images are checked by eToro. Those wishing to join the Popular Investor program are required to provide a photo of their profile corresponding to their face.
Username and Name
Next to the photo you can find the username and the real name of the trader, but the latter only in the case of a Popular Investor. These data also are used to uniquely identify the investor.
Alongside are the symbols to identify whether a trader is only “Verified” (symbol with green flag), or is also a Popular Investor (symbol with blue star).
A trader is “Verified” when he has proved eToro to be a real person, while he’s a Popular Investor when he decided to participate in the homonymous program and disclose his real photo and his real name, checked and verified by eToro.
It shows two values: the performance over the last three months (big), the performance from the previous day (small). These are two values with which you can get a first general idea of the trader. There’s always the rule that too exaggerated values, although positive, have to be considered suspiciously.
Follow and Copy
On the right of the upper block, as for the CFDs of the last lesson, are the two Follow and Copy buttons.
The Follow button with the + symbol will let you add the trader to your WatchList, which means starting to receive all of his feed in your feed wall (we’ll see more in detail this function in another lesson).
With the Copy button instead you will open the pop-up screen to decide the amount to invest for following the operations and investments of that particular trader. We will also see this in a lesson apart, but let me anticipate that first of all you will need to begin by pay attention to the modality you are in, if Real or Virtual Portfolio (you can select the mode from the left menu).
In case you had not yet deposited the capital in your account and you were in real mode, it may not be a problem. In fact, after clicking Copy you will be advised you do not have sufficient funds. But if you had an active account with real money, then you should be sure the mode you’re in, if Real or Virtual. Surely it’s better not to get confused and insert in Real a trader you wanted instead to test in the Virtual portfolio.
As mentioned in the previous lesson, pages with feeds are the heart of eToro’s Social Trading. Social Trading in fact does not necessarily mean “replicating automatically” the trades executed by another trader. Social Trading may also mean follow his moves, his ideas, learn from what he does, and possibly manually copy his trades on our own account (here you can understand the differences between Social and Copy Trading).
To do all that you must add the trader to your WatchList. But before doing it, and begin to receive his feeds in your feed wall, you should examine the content, quality and frequency of his feeds.
Traders of Popular Investors do not interact all in the same way. Some are more social than others, some give many details about their future moves, some respond accurately to every question, some instead are quieter.
Using the drop down menu at the top you can decide whether to display only feeds relating to open or closed trades, of course provided with any comments by other investors. It’s a quick way to understand whether the trader explains his strategies.
Otherwise you can only view the feeds in which the trader has been mentioned, in practice all the other feeds excluding the trades one, or only the Top Feed, selected according to eToro parameters, or all the feeds indiscriminately.
Many, in the analysis phase, tend to underestimate this section, which instead can be very useful. We have repeatedly said that, ultimately, the real data of the performance is what you should rely on primarily, and that the social activities of the trader must always come after. The fact that it should come after, however, does not mean it cannot be useful and make you understand the big strengths or weaknesses of the trader.
You may find traders that look very good in terms of performance, but that never justify their choices, even when they seem to have made mistakes. You might not like it. You may find others instead with less exciting performance, but always explaining their motives, always putting their face and not running away even when they are wrong, and this could give you a lot more satisfaction.
This is the section where you can delve into this type of reasoning.
Always in the Feed page, in the sidebar on the right, we find other modules with some additional data.
In the first at the top we find:
- trader’s name and country of origin;
- the risk score (we’ll explain shortly);
- a few lines of introduction written by his own hand;
- a performance chart of the last year without data (we will see it soon)
In the second module instead we find data relating to the degree of popularity of the trader:
- the number of Followers, namely the people who have added that traders in their WatchList and therefore are receiving the feeds;
- the number of Copiers, namely the investors who instead have inserted him into their People-Based Portfolio and therefore are automatically replicating his trades;
- as this number has changed over the last 7 days, i.e. if the trader has lost or gained new investors who are copying him.
In the Top Traded module instead are shown the three underlyings on which the trader operates the most, to get an immediate idea if he’s a trader which operates more on stocks, indices, commodities or currencies.
Finally, in the last module, to facilitate the research and suggest you some possible variants, eToro offers you the Similar Traders, namely traders with similar characteristics to the one in question.
What type of trader are you?
66% of retail CFD accounts lose money
The statistics page shows the data about the trader’s performance.
Since in eToro there’s not a clear division between those who produce the trading strategies and those who copy them (such as ZuluTrade for example, between Signal Providers and Followers), but it’s actually a real network, normal traders and even Popular Investors, as well as trading on their own, can also copy other traders in their turn.
The system, then, takes into account all the operations performed on the investor’s account, both those made directly by him and those resulting from the replication of other traders via the Copy Trading function. Along with the next, the Portfolio, this is definitely one of the most important pages for the analysis and selection of popular traders or investors.
The Stats tab is divided into several modules:
The performance achieved by the investor is represented by an histogram chart.
In this section we find both the total annual performance, both the month-to-month. All values are expressed as a percentage of the investor’s assets value at the time of detection.
Formerly eToro was used to include within the performance even the profits earned for the copy trading activity, i.e. the commissions earned by the trader for the fact that someone replicated his signals.
This created some large discrepancies with the results obtained by investors instead. The pressures of the community have led eToro to replace the modified Dietz formula (used until then) with a more transparent formula, and above all, more practical to highlight on the investors account only the performance deriving from trading.
The formula now is this:
E1 – is the equity at the end of the month
W – is the total withdrawals made within the month
E0 – is the equity at the beginning of the month
D – is the total deposits made within the month
As a proof of the pudding to see if the formula actually excludes the interference of deposits and/or withdrawals in the performance calculation, let’s make an example.
Let’s assume that in a month a customer with an account of $ 10,000 has not made any investment, but has only withdrawn $ 1,000 and then deposited $ 6,000. If so, his performance, no matter what, should be 0%. Let’s check.
E1 = 15.000$
W = 1.000$
E0 = 10.000$
D = 6.000$
[(15.000 + 1.000) – (10.000 + 6.000)] / (10.000 + 6.000) =
(16.000 – 16.000) / 16.000 =
0 / 16.000 = 0
Indeed, the formula is right. Despite having an equity value at the end of the month higher than the beginning of the month, the result in terms of trading performance is 0.
– Risk Score
The Risk Score is a value ranging from 1 to 10, where 1 represents the lowest risk and 10 the highest risk.
The risk in this case is represented by the volatility of the underlyings on which the trader operates, and the combination of these instruments within his portfolio.
The basic theoretical idea is that each underlying has a daily movement range (daily average oscillation). Assuming that the instrument X moves on average per day of a 2% (upward or downward), if you multiply this value by 3 you will get a Statistical Average Movement, i.e. a range within which the underlying falls in 99% of cases.
In our example, 2% * 3 = 6%, which means that instrument X, in 99% of the days, will move between 0% and 6%, and there will be a 1% of days instead in which it will move beyond the 6 %, with a very powerful movement.
Scenarios like these are clearly very risky, and obviously the more the statistical average movement is big the more volatile, therefore dangerous, is the underlying.
However, the combination of instruments can reduce this risk level.
For example, if you buy EUR/USD it means you are long on euro and short on dollar. If at the same time you open an buy operation on USD/JPY, in this case you will be long on the dollar. So, at a portfolio level, being at the same time long and short on the dollar, you will limit your risk exposure on that particular currency, reducing the overall risk of the portfolio.
The eToro risk score, therefore, is a vote that is given both considering the specific instruments traded by the trader and the overall composition of his portfolio.
The risk index is clearly very important, not only relatively to the underlying on which the investment is made and the interaction between them inside of your portfolio, but also and especially to the combination of leverage used.
The following table shows how eToro considers the different levels of risk and what score it attributes them.
For instance, a risk greater than 10 indicates a daily potential oscillation of the account, positive or negative, higher than the 23.3%, which means that you may find yourself in one day with about a quarter of capital more, but of course even less.
If you’re someone who does not like head shots, this value should remain as low as possible, or at least, you have to find the right balance between the research of performance and the oscillations you’re willing to tolerate.
To investigate and check the “risk history” of the trader you have the opportunity to see the monthly Risk Scores of his account.
Below are instead the Drawdown figures, which is the maximum loss that the investor’s account has supported on the last day, week and year.
Drawdown is also a very important element for the evaluation of the potential operational risk of the trader in question, which is why we talk about it in detail during the next lesson.
As mentioned above, the number of Copiers indicates how many eToro investors are investing real money on that trader, replicating his operations. In this case, however, you also have a chart that shows how this number evolved historically.
Finding some sudden and massive losses of copiers can be an indication of non-stability of the trader, of inconstancy in the performance that sometimes worsens dramatically and all at once (most of the time because the underlying strategy is a martingale or a averaging-down).
Immediately below is the AUM (Assets Under Management), i.e. the total capital invested by all the copiers on that trader. It also indicates how much capital the trader could leverage each time he operates. In other words, considering the trader as a Fund Manager, we could say that this number shows how much money he has in his fund.
These values identify definitely the popularity of the investor but, as I said before, are not necessarily index of talent. Moreover, even if the investor is really good, it’s not necessarily true that he’s suitable for the portfolio you want to build.
Under the Trading section are shown a series of statistical data on the performance of the trader.
All data are really very useful, as they serve to understand the operational style of the investor you are considering to include in your people-based-portfolio. Not many, but they are all very significant.
Total Trades: the amount of operations performed in the last year.
Profitable: percentage that identifies the amount of profitable operations over the total.
Average Profit, Average Loss: always in proportion, the average size of gains and the average size of losses. With these values you can immediately realize if the trader on average in each transaction loses more or less of what he earns. As explained even in the Social Trading course, this value should be considered with the Profitable figure, to understand the true capacity of the trader to generate profit.
Asset Bar: it graphically identifies the quantity, and the proportion between them, of assets with which the investor has worked.
Frequently Traded: as the last item in this section eToro identifies three instruments on which the investor has worked the most (the most frequently traded). Of these it shows:
- The type of underlying asset;
- The number of trades executed;
- What percentage these trades represent of the total;
- How many times have been closed at a profit, as a percentage;
- The average profit and loss.
– Additional Stats
Another interesting section, with very useful statistics to be able to make evaluations, is the Additional Statistics. There are indicated:
Trades per Week: how many operations the trader opens approximately every week. This data can give information on his trading style, especially if used in comparison with other values.
Average Holding Time: how long an operation is kept open on average. It’s another indication, but not a definite proof, to determine if you are facing a long-term trader, rather than a day trader.
Active Since: it identifies the seniority of the investor within eToro.
Profitable Weeks: expressed as a percentage, it identifies the amount of weeks, on the total, he closed with a gain. The calculation considers the value of the account at the end of the week evaluating the value of open and closed transactions. If the value of the account is higher than the previous week, then it will be considered positive, on the contrary it will be considered negative.
Here eToro allows you to study the composition of the current and past portfolio of the investor, as well as letting you know on what underlyings he usually works and what results he’s able to get with them.
All the data we will now see can be set according to different time period, that are Current Profit, this week, 30 days, 3 months, 6 months, 1 year, 2 years, 3 years, selectable from a drop down menu at the beginning of page on the right.
Selecting Current Profit you will observe the composition of the investment portfolio of the trader in that precise moment. Selecting instead 30 days, 3 months, etc, the result will be given by an average of that last period.
When clicking on Portfolio, the first section that appears is the Allocation.
Here you can see, for the period under review, how the trader was placed, in percentage terms, on the various assets, considering also liquidity (money not invested) he has maintained to deal with any negative situations or to invest more .
The assets are:
- People (money invested to copy other traders);
- Balance (liquidity on the account accessible for further investments).
The Performance option shows the percentage of profit or loss of the positions taken by the trader, divided by underlyings, relatively to the reference period, to have a graphical view of how many complementary instruments were used and how they were individually profitable.
In the event of a trader who has invested in many assets you can find two arrows on the side to scroll right and left and view all the underlyings.
– Portfolio Breakdown
The same list of underlyings seen in the chart immediately above can be found in this section with the same data, and in addition, with the Equity % figure, i.e. the identification of the capital, as a percentage on the total, that was allocated in the given period for that particular underlying. In some cases you will see values at 0%. It might seem a mistake but is actually a simple rounding of very small figures.
At the bottom there’s also the Available Balance, which is the percentage of capital in liquid asset in the account for that period. As mentioned before, on time period different from Current Profit, the Available Balance is an average value.
– Open Trades
To access the Open Trades section you have to position the mouse on the Portfolio label and select it from the drop-down list.
By default the view is set to Flat, which means displaying them in a simple general list.
For each transaction, you can view:
- The type of underlying, with identification picture;
- if the operation is open Long or Short;
- the opening price and the percentage of gain;
- the Stop Loss and Take Profit values;
- if it has been carried over weekend;
- how many days ago it has been opened;
- if the operation has been copied by some investors.
If the trader you are analyzing is using Copy Trading a lot, replicating transactions from other traders, with the Copy Trader view you can see all the transactions grouped by investor that generated them.
The other option in the Portfolio drop down menu is the History.
Here is the list of the last 100 closed transactions, in any case no later than 3 months. For example, if a trader operates with 10 targeted operations per month, in this section you will find only 30 operations visible.
This is for sure one of the major deficiencies of eToro. Other companies (ZuluTrade among all) have made available and even downloadable the total list of operations performed by the trader, because, beyond any other parameter, these are the elements with which an investor can really, if he wishes, deepen the study.
We continue to hope that this policy will change in the future.
In the table, for each operation you can view:
- underlying negotiated with identification picture;
- positioning, whether buy or sell;
- how long ago the operation has been closed and how, if manually or through stop loss or take profit.
- the opening price;
- the closing price;
- the percentage of gain or loss on the invested capital;
- here also is indicated if the operation has been copied and by whom.
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EToro Charts Section on the trader’s performance
In the last section, you can view a useful equity line of the trader’s account.
By clicking in the corner of the graph, at the top right, on the “full screen” symbol, you can access all the functions.
The first thing to note is the ability to change the time frame. In the first phase of the analysis of a trader, it is definitely useful to display the greatest period possible, so it is good to set it to “last two years”.
With the Wheel button, you can edit some basic settings of the chart.
With the Drawing button you have access to all the graphical, technical and analysis tools. Such indicators usually are used on trading charts, such as on the chart of a currency pair.
In the case of an equity line chart, I don’t see any particular usefulness. However, someone may try to play with some and observe the performance of a trader from a purely technical point of view, with some oscillator, for example with the Bollinger bands.
One thing, however, is useful, and it’s the written Annotations (as well as other tools with which you can “draw” on the chart). With these options, you can literally write your notes directly on the graph, wherever you prefer, perhaps to graphically remind the happening of a specific event (Brexit? Greece Debt Crisis?).
NOTE: To delete any item you entered in the chart just click on it but with the right mouse button.
Let’s see now a really interesting option. I.e. the function to overlay, over the trader’s line, the chartst of other instruments or the equity line of other traders.
Click on the appropriate button, type the first few letters of the trader’s name or of the TICKER instrument (for example EURUSD or SPX500), and click on the desired item that will appear in the list.
At that point, on the chart will appear both lines, one above the other.
This feature can really come in handy by placing data and performance in a totally different perspective than usual.
- Do you want to compare the performance of two or more traders in the last year?
- Do you want to compare the performance of one or more traders against a benchmark (e.g. S&P 500)?
Use and test this function thoroughly, it will really let you think in perspective.
In conclusion, this chart is extremely useful to work on one of the most important parameters of risk analysis, that is the drawdown.
As we shall see in the next lesson, thanks to this chart we can go beyond the data provided directly by eToro, and manually obtain new data on the trader’s maximum drawdown, to have an even broader and detailed picture of his performance.
Let’s dive right into the next lesson.