This one is a bit of a concerning one really.
It's something - when I came onto Etoro, obviously I'm a kind of really new guy, I'm really new to stocks
and shares - I'm still learning, I'm new to the markets as a whole.
And I was actually looking for a different kind of website when I found Etoro.
I was looking for something to do with bots - I wanted to do bot trading - find out people
who had good bots and then copy / use their bots and give them a percentage of the money
that it makes.
I was looking for that ... I came across copy trading, and I thought "Wow, this is an amazing
idea!
This is brilliant, this is outstanding...
" When I started to have a look into it and all the rest of it - I've always loved the
idea of stock markets... ever since I was kinda young it's been a very glamorous and
"Wow, that looks just an amazingly cool intelligent way to make money" and people who know about
it are obviously very smart.
But I came into this having an idea what things are but really not knowing very much about
it at all, you know.
I'd watched a lot of financial news because for some reason it relaxed me - I don't know
why, but I didn't know about it.
It really, you know - I came to Etoro, had a look around, it's got an amazing interface,
it looks friendly and simple, and the copytrading is perfectly what I was looking for...
I can copy people who have lots of experience - I can copy them for free, and they can make
me money, and that's really awesome.
The thing is ... If you're like me, just looking at this stuff, it's so interesting to me that
I started to want to have a go myself...
So I started to learn a bit ... a bit.
But even before I really knew what I was doing - I didn't use the virtual portfolio - you
can use the virtual portfolio and I think that's a really good idea.
I didn't though - I'm impatient, I think I'm quite clever, I'm often very wrong, and I
started to try and invest myself...
Now one of the things that made that really useful for me is that I joined Etoro about
a year and a couple of months ago - a year and two months ago or something like that.
And at the time when I joined, you know, - and I still have "minimum trades sizes" alright.
So, the "minimum trade size" is what's the least amount of money you can use to buy,
for instance, a stock.
So, do I have to invest $1000, or, you know, what's the minimum that I can invest?
And the minimum trade sizes when I joined were kind of - you know, they were acceptable,
they were do-able.
I still have those minimum trade sizes, and I've been making videos thinking that that's
stayed the same, and people were commenting on my videos - someone was, you know, commenting
"If I want to make a trade on Apple, and it's $500" and they'd carry on with their comment
and I'd just think they'd put an extra 0, because I can make a trade on Apple with $50.
So, if I go here, I'll go to help, and I'll show you what I mean...
So I'll go here - there's the help screen, you find it just down here, and I'm going
to type "minimum trade size"... Alright, so, the minimum trade size...
Here's MY minimum trade sizes.
So if I want to put a trade on currencies - FOREX, I can do a minimum of $25, Commodities
$25 - I still have access to the leverage and stuff but I can do it without.
For stocks - if I want to buy a stock with no leverage - $50 - I can put times 10, times 5,
times 2 leverage.
So if I go to "Trade Markets" and I, let's go to stocks, let's go to good old Tesla...
Go on, Elon ... So...
And I go to trade...
I can, you know, I can put $50 here.
Booom.
$50 - I've only got $48 available balance, so I'd have to put in another $2 you know...
But I can do $50 trades and I can use 10 leverage or 2 leverage, or no leverage - I
can still do the $50 trade.
So...
Which is amazing ... for me.
So, that was really useful - $50 for stocks, $200 for indices and ETFs.
To me that seemed a lot - "$200! woah!
$200 as a minimum!"
That seemed like a big amount, you know...
I had put in like $1000, let's say I've got $1,200 in here or something.
$200 is a big amount of money as a proportion.
When the copyfunds came out, I saw that and the minimum you can put on a copyfund is $5000,
and I'm like "nehh, it's not for me!"
I wanted to use a lot of my money in copying other people, and I wanted to keep a little
bit back to sort of trade myself.
and because I could put $50 trades and $25 trades and stuff like this, that's kind of
possible, you know...
It's like I don't have to risk too much.
I managed to lose a lot of money in the beginning doing that because I took more and more away
from copying and more and more into trading, and it kind of highlights a thing that ... Like
if it's there, and it's exciting and it's interesting and it's useful, I think people
will try and trade themselves, even if, like me, they hadn't really studied well enough
beforehand.
They're going to take that risk - it's kind of a risky thing to do, but you know - it's there...
They've made the system really simple, and I think they've marketed it at new people.
You know... By putting copytrading in, you're automatically sort of pulling in new people and saying
"Have a go, here's copytrading, and that's safe."
But, those people, I think, will try and invest themselves...
I was watching a lot of videos about traders and stuff - how to trade and all the rest of it. And
one of the things they talk about is try and put... try not to put more than 5%
of your portfolio, your money on any one trade.
So let's say I have $1000 - $100 is 10%, $50 is 5%.
So I'm kind of good - I can put 5% on any one trade with no leverage.
Another thing they say is "try not to use too much leverage when you're new" because
when you use leverage ... Leverage is like - it's a multiplier effect, so if I put $50
on Apple with no leverage, it's like I'm trading with $50.
If I put times 10 leverage, it's like I'm trading with $500.
Times 5 leverage - like I'm trading with $250...
So you can make more money, but you can also make more losses and there's an emotional
thing in trading, which I've found anyhow ... Just fear...
Fear and greed, you know, play quite a big part in trading.
At least for me when I'm new, you know.
I see my money going down quickly - I'm liable to panic and sell it when I shouldn't - I
should have just held on and it will go up.
So it takes time to understand how the markets move, you know ... "What's support?"
"What's resistance?"
How do the markets move ... You sort of get used to it.
But before you're really used to it, you're liable to (if you're using a lot of leverage)
make kind of bad bets, you know.
You use too much leverage - potentially you can lose a lot of money.
You can wipe your account out pretty quickly...
90% of traders, they say, 90% of retail traders lose 90% of their account - all their money
- in the first 90 days of trading.
It's a dangerous thing ... This is not like "There's no risk" you know...
I know they put stuff around saying 'There's risk - only risk what you can afford to lose'.
Who can really afford to lose their money?
I mean ... to a degree, but you don't want to - you don't want to lose money, and most retail traders do
because of using too much leverage and not knowing what's going on.
So, here's the reason I say that ... People were putting these comments like, you know,
"$500 on Apple" as a minimum trade, and I thought they were adding a 0 - I thought they'd
made a mistake because I can trade with $50, they'd just added a 0 and it's a mistake - "I'll
carry on talking as if they've made a typo, I won't point that out, I'll be nice.."
But more and more people started saying that, and people started to comment and then I realised
that Etoro have actually raised the minimum trade size...
And they haven't raised it a little...
So, that's mine - $25 for currencies, $50 for stocks, $200 for indices and ETFs.
Here's the new ones...
So for FOREX and indices, it's gone from $25 on currencies to $5000...
And to be honest, I don't want to say bad stuff or say "woaahhhhh Etoro what are you doing??"
But really!
That's a big increase ... For stocks and ETFs it was $50 , I could still trade with $50.
For new people it's $500!
Now this is for customers who registered on or after April 2nd 2017.
So if you registered on or after April 2nd of this year - of 2017, these are the minimum
trade sizes for you.
The minimum trade size - this is important - "The minimum Trade Size is based on exposure
(which is leverage times the invested amount)" So, what that means is, let's say we'll take
stocks...
At the moment I can trade with no leverage $50 on a stock - on Apple, and I'm good, I've
opened my trade.
People now either have to put $500 with no leverage, or they can do $250 with 2 times
leverage, or they can do $50 with 10 times leverage...
O.K, 50 times 10 equals 500...
So, the average - now there's a bit of maths here, O.K, but, statistically, from what I've
heard, I may be wrong, check this yourself...
But from what I've heard, statistically, the average retail trader credits his account
with around $2000 dollars O.K...
So let's say you have to ... You're trying to avoid leverage because you're new and you're
trying to only put 5% on any trade because that's sort of, what they say is standard
best practice.
So ... 5-10%, let's say 5 to be really safe.
So what's 5% of $2000?
So 10% of $2000 is $200.
5% would be $100.
So you're trying not to use more than $100.
So let's say you put $100 on a stock...
To get to their minimum trade size, you instantly have to use 5 times leverage.
It's not that bad 5 times leverage... you know, it's not that bad.
Using no leverage on small amounts of stocks, you don't make a lot of profit anyhow, and
it gets frustrating.
BUT, you know, if you want to put only $50 ... Let's say you haven't put $2000 dollars
in - I know a lot of people who are on Etoro who have put $1000 in, or $800, or $500.
You know ... It's meant to be sort of attracting people who don't necessarily have a lot of
money.
I understand why Etoro have done this, you know...
It's good business for them, you know...
It means that they'll have less server load, they won't have people making millions of
$50 trades.
They'll make fewer trades and larger trades - it's better for their server load.
They're a growing company blah blah blah blah blah.
It's better for their server load, it means that they just have people who are generating
more profits potentially for them.
It's a business move...
But it doesn't necessarily make the safest environment for very new traders who want
to learn to trade manually.
Now ...So let's say someone only wants to put on $50 - they haven't put that much money
in, you know...
That's kind of forcing them to use times 10 leverage.
Which is risky if you're brand new.
It can make you more money - you can make a lot more money IF you get the trades right.
Statistically though, new retail traders don't ... They lose money because of panic, because
of fear, because of greed.
They don't make good, objective, rational decisions ... I didn't, other people don't
- your emotions get in touch, in control and Booom they're engaged.
So, by doing this, what they've really done is they've made it more risky as an environment
for the little guy, you know.
If you're coming to Etoro and you want to just learn how to trade, is it the safest
environment any more?
Honestly ...? Not really...
- I mean if you've got a lot of money, and you've got $10,000 then you can put in $500
with no leverage - you can put in $500, that's still 5% of your portfolio.
But you need to have credited your account with $10,000 to be able to use their minimum
stocks trade size without any leverage.
And I know I use leverage, I use leverage on all my trades, you know, because betting
$50 without leverage you can't really make a lot of money.
You can't lose a lot of money, but you can't make a lot of money.
But I'm just saying that, you know, they do suggest avoiding leverage in the beginning.
They do suggest not using more than 5% of your total amount on any trade.
So, in doing this, I mean they've raised them really quite substantially.
And what I didn't want to be doing is sort of saying "Yeah yeah come into Etoro all you
new people, come into Etoro and learn to trade here!"
And potentially putting you in a situation where it's risky and you're not aware of that.
So I just wanted to do that ... I've got to sleep at night, you know.
So it's a bit risky now with the minimum trade sizes...
If you're still with the old trade sizes, that's O.K but if you came in after April
2nd 2017, be aware of that, you know, be aware of that.
One of the ways round that, really - copytrading.
Copytrading ... Copytrading's - obviously you can copytrade someone with $100 - minimum
of $100, and what that does is you automatically copy all of their open positions, alright, so let's
say they've put 5% of their money on Apple.
O.K?
And you've put in $100 ... They could have 1000...
10,000, 20 100,000 dollars in their account, alright?
And they put 5% of their entire money on Apple...
You've copied that person with $100 so you will put 5% of the money you copied them with
on Apple.
So you'll be opening a trade with $5 on Apple.
So copying people lets you beat the minimum trade sizes.
So the minimum trade size if you're doing it manually is $500 but if you're copying
someone...
If I go to my portfolio - I go to Jay, let's go to Jay...
So, over here, look.
I've got trades open - these are all my trades... this is
In my portfolio I've gone to Jay who I'm copying, and this shows all the trades i'm copying
him with, you see, so he's opened these trades, and I automatically open them as well.
So I've got trades on Activision here - $1.98.
Facebook - $2.69.
The minimum if I do it manually is $50 at the moment - for the new people after April
2nd 2017 it's $500 - is the minimum amount you can use when you open a trade with Facebook.
Because I've copied him, and it automatically copies the same proportion he's traded with
- I trade with, and I only put - I put much less money, then look, I've got a trade on Facebook for
$2.69, Bitcoin with $5.90, Nvidia with $6.39, Bitcoin here with $11.79...
So by copying people, it is a way to get round this.
It is a way...
Now, it means I'm not learning to do it manually.
Maybe I can learn to do it manually in my Virtual portfolio.
I could switch from here "Real" , I can go to my virtual portfolio and if I want to trade
manually and learn to trade manually, I think the safest thing to do - if you've got a small
amount of money now, or you just don't know what to do - you haven't got enough money
that you can avoid using leverage - I think the safest place to trade, the only really
safe place to trade now as a beginner, is in your virtual portfolio.
You know...
Learn to trade here.
If that's your goal - is to simply learn, then learn in the virtual...
I know it's not the same as using real money, because when you use real money, then the
emotions are involved and you have to learn to control them, and you generally learn a
lot quicker because your money's on the line.
But in your real portfolio, I'm not sure how safe that is now for brand new people because
of the minimum trade sizes increase.
They may change that, alright, they may get better amount of server load - capacity might
go up and they may say "alright let's lower it again."
You know - more support staff ... then they may lower it again, but for the moment, it's
a bit risky and I didn't want to sort of be promoting something which is going to put
anyone at risk.
So, at the moment, if you're new, if you haven't got enough money, I would suggest - if you're
going to trade, trade in the virtual portfolio manually, and otherwise copy people - stick
with copying people because they can open much smaller trades, plus they have all the
experience.
And you can learn in the virtual portfolio.
But, you know, if you're going to open $50 trades with times 10 leverage , do it...
I mean I did it, but be aware that it is , it is quite a risky thing to do, you know, it
is quite a risky proposition.
And that's on stocks, you know.
Cryptos you can do $25 with times ... there's no leverage on cryptos is there on here - the
cryptos are real now, they're not CFDs, but you can't use leverage on cryptos at the moment
on Etoro - they might reinstate it in future but at the moment, if you want to trade cryptos,
the minimum is $250 so if you've put in only $1000, that's 25% of your account
on each trade.
Which isn't best practice...
You can do it - you can do anything you want you know, I take these sorts of risks, but
they ARE risky, and I don't want to say they're not...
Do you know what I mean.
So, that's it - I hope that makes sense, I hope it wasn't too ... If you want to find
out about them, just go to 'help' here and here you can type in, just type in "minimum
trade' and minimum trade size comes up and you can see them, so there we are, and it
gives a description of what you can do here - of what those minimum trade sizes are.
You can have a look yourself and really read through it and familiarise yourself with it.
But it's a change I wasn't aware of, and it's a real thing.
There we are...