Etoro Minimum Trade Sizes – The Risks


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…

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