–TRADER OF THE DAY
I will use this section to highlight the Strategy, Trading Style and Risk Management of the Top Performing Traders at eToro that match the Risk and Return metrics that I set. If you sign up at eToro, you can access my (or their) Strategy, Trades and Positions for free. Sign up here.
Scroll down to read the latest Traders Analysis. Feel free to ask questions or add your own view if you see something interesting that I missed pointing out. If you’re the trader that I wrote about, then feel free to send me your thoughts, I’m always open for feedback.
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Today, I would like to take a look at the Performance of the Traders that I Copy at eToro.
Currently, I’m copying 3 Traders for 2% of assets each: w5h700, jaynemesis and Algebraiker. I stopped copying TradeBetter, as he kept adding money to losing positions last week, leading up to a 90% loss of that specific Palladium trade….not the kind of behavior I want to see.
w5h700 – I added this trader last week and although he’s not a Popular Investor (yet), I do like his background (Deutsche Bank, what better place to learn how to use/control/trade the markets? ;)), his trading style and most of all, his trading performance, +4.8% in a week and +14.84% since he joined eToro, 2 months ago. Based on his historical trades, he seems to understand the markets, and above all, so far he’s able to deliver alpha (outperformance) and profitable trades. I’ll keep him in portfolio.
A young, eager trader that seems to know what he’s doing.
He’s using a strict risk management (stop loss, take profit and position size) so that makes me confident he will take care of my money as a responsible trader.
So far, he’s doing a great job, +14.84% in two months and +4.8% since I started copying him.
jaynemesis – he’s one of the Traders at Etoro that is most copied.
He mainly trades cryptocurrencies (40% of trades in Ethereum and Bitcoin) and that explains most of his return over the last 12 months, +217%. As you might know, I invest in cryptos for the long(er) term, so adding a trader that focuses on the Cryptos short to medium term, could be of added value to me. So far, it’s working, +0.99% since I started copying him (June 2).
Algebraiker – He’s a bit different from the other two, as he mainly trades the short term DAX, intraday to intraweek trades. Since I started copying him, he made 2 trades, both for a decent 4% return, intra day trades.
I like the fact that in general, his portfolio is cleaned up before the market closes, so he has little to no overnight exposure. If he’s able to keep up this performance, 0.15% per day, then it will lead to a stable 3% return per month and a risk profile of 3. That’s what I like so I will keep him in portfolio.
Copy Funds explained by the CEO of eToro
I added 2 Traders to My Portfolio
I analyzed their profile and trading history, and these two seem to be able to close profitable trades over a longer period of time.
TradeBetter – Only Copy New Trades – 2% of Assets
TradeBetter had a rough last couple of months (shorting the DAX) but managed to deal with it and solved it, eventually. I also analyzed the other choices he made and I’m confident he has his mojo back, so that’s why I started investing in him, (only new trades, not opening the current positions in portfolio).
jaynemesis – Only Copy New Trades – 2% of Assets
jaynemesis is mainly trading cryptocurrencies, but since I believe that the cryptocurrencies could retest lows again before the next take-off, I will only copy new Trades.
Top 3 Most Copied Traders
Sign up here for free to start copying these Traders!
I selected the Traders that match the following criteria:
Period: last 12 months
Return: > 10%
Profitable months: >80%
Max Daily Drawdown: 5%
Max Weekly Drawdown: 15%
And then I sorted the outcomes to show me the traders with the highest number of copiers. Based on these criteria, there’s only one King: Alex Plesk.
So let’s take a closer look at his Strategy, Portfolio and Historical Trades (work in progress. when I’m finished, it will be uploaded below this post).
Top 6 Traders
Alex Plesk – Trader Analysis
- Great Performance
- Low Risk
- Increasing # of copiers
- One year Track Record, will Alex be able to (out)perform over the longer term?
- Two assets (Google and Ethereum) account for 36% of portfolio value –> risk or opportunity?
- You need at least $1000 to copy his Trades, so not very accessible for the relatively small accounts
Interesting chart….from a technical point of view this looks very bullish…Higher Lows and Higher Highs.
Strategy, Portfolio and Asset Allocation
Overweight long exposure: stocks and cryptocurrencies (Bitcoin and Ethereum). This portfolio and strategy should work well if markets keep the uptrend intact.
Over the last 12 months, > 90% of trades were buy positions, Alex does not short often. He did make some sell trades, indicating that his mindset is able to do just that, short an asset when he sees it fit.
As I mentioned before, I’m looking for traders that can add value regardless of the direction of the general equity markets. Absolute return is what I need for my Fund.
Trades are closed either because he closes them manually, or because the stop loss or take profit is hit. He shows he’s able to use those instruments and also that he’s able to close trades that are currently in red. Not a lot of traders are (mentally) capable of closing losing trades.
So basically I’m satisfied with what I see, no red flags.
Nice growth in the number of people that Copy the Trades of Alex. And that makes sense as his performance (risk and return) is excellent so far.
These are my criteria for this analysis:
- Risk < 5 & Return > 50%
- 12 months period
Algebraiker profile mentions he’s a mathematician and well educated.
Well educated does not have to indicate smart choices (made plenty bad ones myself ;)) but in general, I do think that education and understanding 1+1=3 adds value to the story.
Let the numbers do their work, right?
Since April 2016, he’s scoring consistent results, as if from that date his strategy (mathematical formula?) was fine-tuned to the max. Or was it because the market was up?
Buy Gold and Silver coins!
Relative Performance vs Benchmark
And here’s a graphical presentation of Algebraiker’s performance, showing consistent results since early 2016 and a max drawdown of 6%. Nice job.
But as always, there are more sides to a story than what meets the eye.
I calculated that over the period JAN 2016 – today, the DAX returned +20.7% vs Algebraiker +18.9%, a nice absolute return for both. Since the DAX performed a bit better, Algebraiker is slightly underperforming the benchmark during an uptrend. The DAX chart is practically a copy of the chart below…that’s a warning signal as I will explain next.
During the period DEC 2015 – FEB 2016, the DAX was in a downtrend, as well as Algebraiker’s performance. So that raises the question, is he mainly playing the buy side and copy the DAX? Or is he also able to add an absolute return (>0%) in a downwards biased market? Not yet, but I think we’ll find out soon enough.
Risk & Copiers
He’s keeping his Risk well under control, as he’s also consistent here. And that’s what people love, a consistent trader with steady results explained by the number of copiers that show steady growth and no to little fluctuation to the downside.
A small buy position in the DAX. Nothing to worry about.
80% dedicated to the DAX, 98% of his trades are profitable, excellent job.
Mainly buy positions, makes sense during an uptrend. No arguing on that one. He also uses Target Prices (TP) which is a sign of a Strategy that he’s following. Decreases the factor of luck.
Only criticism I can find is that I would love to see him reach a positive absolute return during a downtrend, because then I know for sure he can add value in any trend.
That’s my main criteria:
Add value (absolute return > 0% and outperform the benchmark) regardless of the trend.
He’s one to be added to my Copy list. I hope he keeps up the good work!
He’s doing pretty well, great returns and low risk, but I wonder if he’s also able to deliver a return if/when the markets are bearish
Added to my Copy List
TRADERS OF THE DAY – a brief selection of Top Traders @ eToro
I selected the traders that returned > 100% over the last 24 months and a risk score < 7.
“Only” 8 traders fit these criteria.
So far, TradusMaximus seems to score best, having the lowest risk score and a whopping 123% return.
Click on the image to approach their strategy & portfolio and copy their trades for free.
Risk < 7, Return > 100% & 24 months