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Te concept is straightforward. Joining eToro’s social trading network is free. After joining, everyone in the network gets access to all the trading data and information generated by our millions of registered traders, allowing them to see every trade made in real time, follow the trades and performance of any trader and copy any trade or trader they choose. With a click of a button users can now initiate eToro’s CopyTrader ™ functionality and link their own trading account to one or several traders, by assigning a portion of their available funds to copying that trader. Every trade executed by a copied trader is automatically opened for the CopyTrader also. Tis means everyone can now trade like an expert trader and have their money indirectly handled by experienced traders.
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eToro’s social trading platform appeals to a wide range of traders. Novice investors will love having an expert trading for them. Beginning traders can benefit from knowledge sharing with pro traders, whilst experienced traders can use the social indicators to discover new investment opportunities and find other experts to emulate and copy.
Why do you think eToro was uniquely positioned to overcome the technological and investment hurdles involved in launching a social trading service?
From the outset we wanted to change trading, to make it appealing to everyone. We are fortunate to have the right mix of talented people in our company who all live the internet and it was for us the natural evolution to embrace the concept of social networks and interweave it into our products. We made a decision to reinvest our generated profits into the development of our social trading platform, knowing that if we wanted to make a real difference it would only happen through developing a disruptive idea. Trough our large user base we were able to quickly spread the word of our social trading platform and have seen continuous growth in the past few months as a result. We have also attracted strategic investors such as Spark Capital, a major investor in Twitter and Howard Lindzon, founder of Stocktwitts who have placed their trust in our ability to lead the social trading revolution.
In what ways are social networks useful in helping to break down the barriers of complex trading?
With social trading you’re never alone. Traders are part of a large network that comments on their trades. eToro enables traders to tap the wisdom of the crowd and to copy the trades of the best performing traders, which makes us the easiest and most transparent way to trade. Users have the ability to approach every trader in the network and engage them with questions
Jonathan Assia
and comments about their trades. It accelerates the learning process and helps users search out the best traders to follow or copy. In addition, social trading provides a very user friendly interface for managing trading, thereby taking the pain out of the process.
In the past you have talked about eToro’s commitment to promote responsible trading. What do you mean by that and how will your investment network facilitate this?
eToro takes responsible trading seriously. We want our traders to be educated about the risks their investment decisions involve, and to realize that big risks often lead to big losses. Experienced traders are better than beginners at keeping their emotions in check and making sensible investments. However, every trader lets their emotions take over sometimes. eToro has integrated a series of tools to help traders be more responsible. Automatic settings limit traders’ leverage, if these are disabled, an opt out warning reminds them of the potential risks. Our Guardian Angel tool analyses market conditions and trader performance to provide relevant trading guidance. Meanwhile, social traders can invest no more than 20% of their available balance on following any one trader through the CopyTrader feature.
Has the OpenBook community grown as you expected and how many users are now taking advantage of it and building people-based portfolios?
We see great growth on our social trading platform and we see even greater growth in the adoption of CopyTrader among our traders. Te number of CopyTraders and the number of automatically copied
october 2011 e-FOREX | 181
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