Home Forex Trading Why do 76% of Etoro Traders Lose Money?

Why do 76% of Etoro Traders Lose Money?

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A smart thing about Etoro is that I have noticed and I thought that I wanted to teach you on. In Etoro’s website home page, there is a little warning about how many Etoro traders lose money with trading.

“76% of retail investor accounts lose money when trading CFDs with this provider”

Why do 76% of Etoro Traders Lose Money?
Etoro’s Warning about the risk

76% of all the retail investors, that is us, the un-financially trained people who are using Etoro. 76% of us loosing money. That is over 3/4 investors. Only 24% of people are not loosing money. That is a very frightening, very big, very real statistics.

What is the actual reason?

The Etoro platform is very nice and attractive and it is the world’s leading social trading platform. It works well with mobile phones, it looks lovely, it looks friendly. So, Is the problem with Etoro? Is it because Etoro is a scam? or Etoro stealing our money?

No, I don’t believe that at all. What I believe is most of the Etoro traders lose money because trading is inherently incredibly risky. Etoro did a wonderful job of making it accessible, making it look friendly, and making it lovely.

Etoro's user friendly user interface.
Etoro’s user friendly user interface.

If you go to other platforms like MT4, Metatrader, and all of the rest of it are very complex. It just instantly gives you a headache, terrifies you and gives you a like feeling ” Dude, I can’t deal with this”.

As of this simpleness in Etoro, most people think “Yeah! Yeah! I can do this” and they just forget the risk underneath that simpleness. This is real, the real market. There is a high risk of losing money. Never forget it. You have to be very very careful.

My personal experience

Let me show you my history of trading. We can go to statistics in Etoro and they show us all the previous trades that I have done. I started in 2016. I think the main thing which lost me money consistently is the desire to get rich quick. BOOM!. In many forms, underneath it is a desire to get rich quick. Some people when they are trading do seem to get rich quickly. They buy bitcoin when it is 0.004% (0.004c) and it went up to 21,000 now they are billionaires. It can happen. I never say it can’t happen. But I think the desire or the goal of getting rich quick. Is the surest way to lose money.

Why do 76% of Etoro Traders Lose Money? See First year of my trading portfolio
First year of my trading portfolio

Above you will see, first year of my trading. I lost 38% of the money that I put in, in the second month I was trading. Why? because I had little money. 500 USD. See the below image as well. It is from one of the best traders in the Etoro. Look how green it is.

Portfolio of a one of the best Etoro investor
Portfolio of a one of the best Etoro investor

Problem with small investments

Let me now tell you the issue with small amounts. In the above image you see, even one of the best investors, earn only around 20% profit. So, think If I put 500 USD and at the end of the year I got 20% profit. How much is it? 100 USD. WOW! I made 100 USD after one year. Is that exciting? Do you think I really care about 100 USD after a year? No right? that is the truth. When I put 500 USD then I at least need to make it 1,500 USD at the end of the year. 400% within one year. Wow! that sounds awesome.

This is the problem. Higher the amount you expect, Higher the risk you take. With 500 USD I just wanted to get rich quick and saw trading as a goal, a way, a path to do that. It is not. 20% per year is amazing. I have looked at returns of the top hedge funds in the world. You know, People who are making amazing amount of money, the richest people in the world. Their returns on their funds are like 16%, 20%. That is great for the industry. But when I came in, I was thinking ” No, I want 400%, I don’t want to make 100$ per year. ”

That is entirely the wrong way of thinking. I guarantee, that you will lose all your money. And this is the actual scenario that most of the Etoro traders lose money.

Golden Rule

Never think this is the last chance that you can get rich. This was me back in 2016 ” I have to make this trade, if I don’t make this trade, I’m never going to get rich. Oh my god, I can’t miss this opportunity! ” And it was always “I have to do it now or else I’m going to miss out”

The real experienced traders know that there will always be another opportunity to make money. Every five minutes there is a one. The market all the different markets, Gold, Crypto, CFD, there are millions of these instruments. thousands of different things you can trade all day. There are tons of opportunities to make money. Never worry about this moment.

I hope this is enough for this post, I will continue to give you more details and ideas with another post. Please give your thoughts and successions to improve. And don’t forget to share your experience with us.

Read how to trade on Etoro here

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