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Why & How You Should Properly Diversify in Copy Trading | Video review

Maybe you have already noticed that in eToro´s Copy People section straight on the top of the page you are offered Editor´s Choice Copy Traders. These are traders who has been performing very well in the last 12 months so they are worth copying. At least according to eToro´s editors.

But before you start copy any of them, we strongly suggest you to watch this video where its author will explain you why you should think about diversification first.

As the author of this video explains, there is nothing wrong with mirroring traders and popular investors from eToro´s Editor Choice.  They all have great performance for the last 12 month, many of them even for many years.

However if you look at portfolio of some of them (like Jay Nemesis , Reinhardt Coetzee, Alex Plesk or others) , most of them are trading US tech stocks and cryptos like Bitcoin, Ethereum, Ripple or other cryptocurrencies.

Now, the thing is that if you want to diversify your copy people portfolio and you just take and copy traders from Editor´s Choice on eToro you can run in a big trouble.

Just imagine that US Tech Stocks sector gets hit and turns south. As many of these traders invest in US tech stocks a huge part of your invested money can lose its value.

What the author of this video is trying to point out is that editors in eToro tend to always pick same kind of copy  traders to their Editor´s Choice. It is probably because US tech stock sector has been booming past 7 years.

According to the author of this video it can be a wise choice to look for a different kind of traders who are not focused mainly on US tech stocks and cryptocurrencies.

Warning: Trading carries risk. Only risk capital you are prepared to lose. Past performance in not an indication of future results.

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