Pause, Resume, Stop: Essential Tips for Using CopyTrader 2.0

Tips for Using CopyTrader 2.0

Even the most expert investor is bound to make mistakes and wrong trades; and if you are a social trader copying that investor, their mistakes can cost you too.

So how do you protect yourself from these losses? It is with this question in mind, that we’ve introduced the latest version of our CopyTrader system on eToro OpenBook, with two game-changing new features: the Pause/Resume Copy and Copy Stop Loss (CSL).

The Pause/Resume Copy function allows you to take a break from copying the trades of an investor for some time. When you pause, the trades previously copied from that investor will remain open, but no further trades will be added. When you resume, all the future trades made by the copied investor start adding up to your trades automatically.

The Copy Stop Loss function allows you to manually set a limit to the losses where you would automatically stop copying the investor. This means that when the copied investor loses a certain amount of money in their trades, you automatically stop copying them. This stop loss order applies to the entire copy relationship, which means that all your previously copied trades will close as well.

These two new features have been added to make it easier for social traders to copy investors while keeping control over their risk. Using these two tools smartly will allow you to benefit from the wisdom of the traders you copy, while protecting your gains from their mistakes.

Before you start using these tools, here are five useful tips that can help you out.

1) Determine your involvement

Determine your level of involvement in the trade to pick the right option between Stop Loss and Pause/Resume. The Pause/Resume function would require you to be more involved and to observe the trades more closely so that you can pause and resume at the right time. If you are not observant and pause too late, you will end up with substantial losses. For such traders, The Copy Stop Loss function would be better as it will stop copying trades automatically if a certain loss level is crossed. Ideally, you should use both the CSL, to protect your overall copy funds, and the Pause/Resume to avoid bad patches in the trader’s performance.

2) Manage your stops

As your copy investment grows, it is wise to move your Copy Stop Loss to protect your gains. You can also do so by withdrawing some of the profits from the copy relationship, however using the CSL to this end makes it possible for you to lock in your gains without hurting the copy amount. So for example, if you started out copying an investor with $200 and at some point the investment grows to $250, you can move your CSL to $220 to make sure that at least some of the profits will be yours no matter what.

3) Don’t Be Too Quick

Do not make decisions too hastily just because you want to avoid risk completely. Do not be too quick to Pause or Resume Copy just because one trade has gone wrong or right. If you pause copy too quickly, you run the risk of missing out on the profitable trades the investor will use to cover his/her loss. Similarly, you should not put the Copy Stop Loss limit too high as it can trigger the stop too quickly. This could mean that all your previous trades would also be stopped, causing you more losses in the end.

4) Use All the Platforms

Right now, the CopyTrader 2.0 is only available on eToro OpenBook, but soon it will be made available via our mobile applications and WebTrader as well. In order to keep up with the trading results, especially when you are relying on the Pause/Resume Copy function, it would be much wiser to use these features on all the platforms so that you have control over your trades at all times.

5) Use Pause/Resume as an Exit Strategy

Previously, when you wanted to stop following a trader, you would have to stop the copy relationship completely and thereby realize any existing losses. With the new Pause/Resume Copy function, you can make an exit without having to realize these losses. You can just pause following the investor so their new positions will not be copied, allowing them the opportunity to wait out the market trend and potentially turn the existing losses into profits.

With these tips in mind, I hope you will be able to use these new features of CopyTrader 2.0 more effectively, ensuring that your copy trading portfolio is protected from unnecessary risks.

Article Written by: Abby Tsype