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  • Jay Smith

Advice for copying during volatile market conditions

The markets have been extremely volatile so far in 2020, with huge corrections across all asset classes caused by Coronavirus. As a result I made a quick guide on how to copy or add funds with the reasoning behind it. Before you do anything

  1. Please do not put all your eggs in one baskets. Many of the traders who remained long on eToro are fantastic traders in their own right. Think long term, most of this correction has now already taken place in stock markets and Crypto. I am still net short and you could cause more damage than harm if you time switching sides poorly.

  2. Please only invest what you can reasonably afford to lose. Events like these are rare, but they do happen. Again, think long-term anyone investing for profits in 6 or even 12 months has the wrong attitude. Think 3, 5 or 10 years ahead.

  3. Set realistic expectations. Markets are volatile. I have profited well from the move down but may not time the move back up so well. You could still face substantial draw-down on your investment (a loss before you turn green).

I want to add funds

  1. Markets are choppy right now and the difference in copying with open trades 4 hours ago compared with now as I write this post is around 4%. Are you ok with being up or down by 4% in a few hours?

  2. As a result, I advise that most of you should instead copy new trades only (uncheck the box for copy open trades).

  3. If you are happy taking a little more risk you can still add funds using copy open trades. If you do this I advise you wait at least another hour until US markets have been open a while and settled down.

I want to copy

  1. As above, please consider the market volatility before making this decision.

  2. Please do NOT copy me with 100% of your portfolio. Diversify, traders such as @goodgoing @OlivierDanvel @MrThor7734 @misterg23 @JMilazzo have also handled the drop reasonably well to name just a few. But don't take my word for it, check their stats, risk level and trading history before deciding. Ideally, you should not copy any individual with more than 20% of your portfolio.

  3. I believe copying open trades may be more worthwhile than copying open trades as a new copier. This is because you do not own any of my stocks which will offer dividends. That being said, consider copying with only half the funds, then adding funds without copying open trades immediately afterwards.

Is now the right time to copy?

  1. This is probably the most infuriating question I get asked because by the time I answer everything could have changed. As a general rule, if a portfolio is deep in red, copying open trades is better.

  2. Don't try and time the markets. That's my job! It's possible you can improve your odds my timing your copy, but think long term. The 2-5% you might save by copying now instead of 2 days ago or 1 week in the future does not matter in the long run.

  3. There is ultimately no good or bad time to copy, what's important is to look at the portfolio, check markets are open and then make your decision. The only bad time to copy is a weekend. Wait until a weekday.

If you have any questions, please don't hesitate to ask!

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