Sheffield student copies financial traders to fund course
Liam Davies from Sheffield, a student at the University of Edinburgh, has more than doubled his investment in the last 12 months from something called 'social trading'.
The Electrical Engineering student has found success after teaching himself the basics of trading and investing, and then copying the trades of others on the internet.
"I was a complete novice", he admits. "I knew very little about financial markets, and made some mistakes early on that lost me money".
A turning point for Liam was when he started watching and copying experienced traders, which is the core feature of so-called social trading networks.
After carrying out some research on public profiles and portfolios on eToro, he followed a couple of the more profitable ones whilst paying close attention to their risk profile. Over time Liam picked up new strategies, and messaged traders directly to get their views and insights on financial markets.
If you’re short of time, or just starting out and have very little knowledge, features like 'Copy Trader' allow you to fast-track the learning curve and get investing.
From those early beginnings, Liam has learnt a lot and has since created his own successful trading strategies. As a result he now has many followers and copiers himself (currently 438).
He earns additional money from the platform for every person who chooses to copy his own trades. However, they can choose to leave at any time so it's vital for Liam to do his homework and believe in every trading decision he makes.
His portfolio consists of big blue chip stocks like Facebook, Amazon and Apple, which have all contributed to his 111% growth in the past year.
But like most traders, Liam is honing in on an area of expertise, and for him it's crypto-currencies like Bitcoin.
I first heard about Bitcoin in 2010. I was fascinated by the idea of this new digital currency. I did a lot of research into Bitcoin and crypto-currency in general and I’ve been trading it for a while now with some good wins.
The price of Bitcoin has gone from just a few cents back in 2009 to topping the $1,300 mark earlier this year, but over that period has been very volatile.
Traders are now eagerly looking for ‘the next Bitcoin’. And Liam is one of them.
More recently I’ve discovered Ethereum. It’s still based on the same blockchain technology but it’s newer and has greater potential. It’s also being strongly funded by some large corporations, including Microsoft.
This might all sound like a lot of effort but Liam has managed to find a good balance with his trading activities and believes it has actually helped his studies.
On average I spend an hour or two a day working on my portfolio. I try to design my trading strategy to fit around my other commitments. My studies are very important so I find it best to make longer term trades which I can check when it suits me. Trading has allowed me to pay for a lot of things. Normally, I would have needed a part-time job instead, so it actually frees up a lot of my time, allowing me to focus on my studies.
Online trading is not without its risks, of course. Just as you can win big, you can also lose big. And Liam is very aware of the higher volatility (compared to stocks) that you can get in markets like Bitcoin and Ethereum, where the price can go up and down dramatically, even in just a single day of trading.
Absolutely. They are risky, volatile markets. Ethereum, like Bitcoin, is not without its issues, and those issues can create a lot of price volatility, but that can also be good for short-term trading opportunities.
As Liam will testify, before investing any money it's really important to first get an understanding of the markets and risks involved with trading. If you're interested in learning about the markets, start with a free demo account on eToro that gives you virtual money to practice with.
George Thomson, another student using eToro, has written a full guide to using the platform here.