In order to always satisfy the needs of its traders, who are constantly evolving, the leader in social trading, eToro, is constantly offering new services. From now on, it is possible to use the following Stop Loss on the platform. Find out how it works and what the benefits are
The principle of the following Stop Loss
The following Stop Loss is a protection system that offers traders the possibility to limit their losses. With this option, the positions taken by the trader remain open, but only in the event that the prices of the assets move in the right direction. In the event that the price goes in the opposite direction, the trade is automatically closed.
For example, if the trader opens a buy position in the EUR/USD pair at 1.1000, and the Stop Loss rate is set at 1.0900, here are the possible scenarios:
- The price goes in the right direction and the Stop Loss level will be automatically adjusted. If the variation reaches 1.1050 for example, the Stop Loss will be 1.0950. The profit will then amount to 50 pips.
- The exchange rate drops to 1.1010 for example. The Stop Loss of 1.0950 will then be maintained. It will only be adjusted when the maximum previously reached (1.1050) is exceeded. The adjustment will then be made as the prices change. If the rate goes up to 1.1130, the Stop Loss will be adjusted to 1.1030. In this case, the trader will not lose any points, on the contrary, will make a profit of 30 pips.
The activation of the option
To activate the following Stop Loss, simply tick the corresponding box already available on the platform. Of course, it is necessary to first open a position before setting the Stop Loss level. When the option is activated, the interval between the trade opening rate and the defined Stop Loss rate is automatically locked.
This feature can be enabled or disabled at any time, depending on the trader’s needs. All he has to do is adjust the parameters displayed on his screen. However, it should be noted that the Tracking Stop Loss option is only available on the new eToro platform. Traders who still use the old tools have to change platforms in order to benefit from them. It should also be noted that the following Stop Loss is only applicable on positions taken by the trader himself. Nothing changes then for the Copy Stop Loss feature.
Other changes made by eToro
In addition to the following Stop Loss, which is now available in real mode on the platform, eToro has also made some adjustments in its trading conditions. Concerning in particular the copies of trades, the minimum amount to be copied is now $1.
Thus, for example, if the capital of trader A is $10,000 and his trades are often open at $50, or 0.5% of the capital, and trader B wants to copy it with $100, resulting in an average trade of $0.5. Trader B will not be able to copy it, until the amount of his investment is adjusted to $200, to reach the minimum allowed which is $1. In the event that Trader B does not have the required capital, he will then have to make a new deposit if he wishes to trade. Payment is already made easier by eToro thanks to its fast pop-up system. These new features are to be discovered directly on the site.