Read our comprehensive eToro review below.
WHAT IS ETORO?
Found in 2006, eToro is a respectable forex and CFD brokerage firm with its headquarters located in Cyprus. The online broker is regulated by ASIC, CySEC, and FCA.
At eToro, clients can trade a range of trading instruments, such as Stocks, Forex, Commodities, ETFs, Indices, and Cryptocurrencies. The broker also offers a proprietary eToro trading platform to its traders.
INTRODUCTION
In 2006, eToro was founded by 3 partners, who wanted to develop a financial trading platform that can be used by traders of all experience levels, providing user-friendly trading tools.
Today, eToro is one of the best brokers in forex which serve over 6 million customers from around 150 countries globally, confirming its status as an industry frontrunner.
The company is a social trading community and specialises mostly in CFD assets trading. eToro also offers both demo and live accounts with cutting-edge trading capabilities.
Even though eToro is a frontrunner in cryptocurrency and CFDs trading, they also provide a lot more. eToro has steered the fintech revolution for many years and developed a reputation as one of the top social trading platforms globally. Each day there are thousands of new traders over the world that is joining eToro’s growing community.
eToro started as a general trading platform but then included cryptocurrency along with other trading instruments to stay on top of changing markets and rising demands. eToro is one of the pioneers in incorporating social features (CopyTrading & CopyPortfolios) to their platform.
Since 2007, they have regularly taken steps to make sure its platform allows for accessibly investing and online trading to anyone. eToro’s tools are user-friendly, and they have made all of the information on the platform available on their mobile app and web interface.
eToro is a highly rewarded broker, which does not only get good reviews from the global traders but is also rewarded by some of the world’s most reputable international magazines. eToro has previously received awards such as the Best Broker for Social Trading, Best Broker for Cryptocurrencies, and many others.
In this eToro review, we found that the broker offers a swift and easy account opening process and has a social trading option available to copy the trading strategies of experienced and expert traders.
PROS & CONS
Pros
- Free ETF trading
- Free stock trading
- Easy broker account opening process
- Social and copy trading available
- Low trading and CFD fees
- User-friendly trading
- Clear brokerage fee report
- Two-step (safer) login
- Negative balance protection
- Swift customer service
- No deposit fee
- Low minimum deposit eToro
- Credit and Debit card available
- Highly regulated broker for forex
Cons
- High forex fees
- Slow withdrawal of funds
- Merely a single account base currency
- Restricted customisability of charts and workspace
- Lack of streaming news
eToro has a withdraw fee of 5 USD - High non-trading fees charged
- Higher spreads than average
- No MetaTrader platform available
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TRADING INSTRUMENTS
eToro offers many different financial assets to trade under a few categories: Stocks, Forex, Commodities, ETFs, Indices, and Cryptocurrencies. Each trading instrument has its own features, and can be traded by means of a range of investment strategies.
Stocks
On eToro, when a trader/investor purchase a stock by opening a BUY (long), non-leveraged position, means that the trader/investor is investing in the underlying asset, and the stock is bought and held in his/her name.
eToro also provides other functions by means of CFD trading. With CFDs, a trader can open SELL (short) positions, use leverage, and purchase fractional shares. For instance, on eToro, a trader can invest $100 in a stock that in reality costs $500. Some of eToro’s popular stocks include Apple, Tesla, Google, Facebook, and Amazon.
It must be noted that all trades that are made by eToro’s clients are executed as CFDs under the ASIC (Australian Securities and Investments Commission), without taking ownership of the underlying assets.
Cryptocurrencies
On eToro, a trader can trade popular cryptocurrencies through CFDs. Cryptocurrency CFD is an excellent instrument since it fluctuates widely and provides benefits because of its inexpensive and secured nature. It also allows trading Bitcoin, Binance Coin, eToro Ripple, Ethereum Classic, Dash, eToro Litecoin etc.
Cryptocurrencies, such as Ethereum and Bitcoin, have developed into the main investment preference for many traders. eToro offers many options for traders that want to invest in the crypto market.
Cryptocurrencies display exceptionally high volatility, and fluctuations of double-digit percentages can easily take place in a single day. When a trader purchases crypto on eToro, it means the trader is investing in the underlying asset, but the crypto is essentially bought and held by eToro on the trader’s behalf.
eToro offers the following cryptocurrencies, amongst others: Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Cardano (ADA), and XRP. eToro was one of the first companies to enter the cryptocurrency world by presenting Bitcoin trading by means of CFDs in 2013.
Commodities
Commodity-trading is one of the oldest trading practices globally that started many years ago. Commodities are unique, since they have an actual physical representation. Commodities, such as a precious metal like platinum or gold, or oil, are affected by actual and real-life events.
On eToro, a trader can trade commodities only as CFDs, meaning a trader will not take ownership of the underlying asset in order to trade. On eToro, a trader can invest $100 in gold, although a unit of gold costs $1,000. Some of eToro’s most popular commodities consist of Gold, Oil, Natural Gas, Silver, and Platinum.
Forex
The forex market is the largest market globally, with over $5 trillion being traded each day. Forex is also an extremely volatile market, with fluctuations that can occur within seconds. Fluctuations in currency are measured in small components, namely “pips” (0.0001), and traders need a large capital to make noticeable profits.
Currencies are affected by a number of factors, including a particular country’s export figures, central banks’ interest rate decisions, as well as other events.
On eToro, currencies are only traded as CFDs, which means that a trader does not need to take ownership of the underlying asset in order to trade currencies. Some of eToro’s most popular currencies consist of: EUR/USD, GBP/USD, AUD/USD, USD/JPY, and USD/CAD.
Exchange-Traded Funds (ETFs)
An EFT (Exchange-Traded Fund) is a financial instrument consisting of a number of assets that are combined to serve as a single tradable fund. Each Exchange-Traded Fund follows a particular market index or approach and is created to either match the hedging needs of a particular financial institution, or to be a low-risk alternative for investors.
Exchange-Traded Funds are developed by financial organisations through a team of professionals who shape each ETF to meet its goal. The assets in a fund are owned by its developers, and dividends can occasionally be allocated to investors.
Exchange-Traded Funds are generally considered as long-term investment tools, since they are aimed towards low risk, and are created to produce steady profits in the long run. Some of eToro’s most popular ETFs consist of: SPY, VXXB, TLT, HMMJ, and QQQ.
Indices
Each major stock market in the world has an index, or a number of indices, which shows the status of a particular piece of that market. Indices are known to be steadier than individual stocks, as they consist of various different assets, which are likely to balance each other out.
Since companies differ in market cap and size, every stock has a different influence on the index, which means that some carry greater weight. For example, since Amazon has greater weight than less significant companies within the NASDAQ index, if Amazon’s stock increases significantly, it may possibly boost the whole index’s value.
On eToro, indices are traded on as CFDs, since they are not financial assets that can be directly invested in. Some of eToro’s most popular indices consist of: GER30, NSDQ100, DJ30, SPX500, and FRA40.
TRADING PLATFORMS
Etoro has created a proprietary trading platform that is accessible on mobile and web. Their web trading platform is extremely customisable, whereby traders can choose what commodities, stocks, currencies, and cryptocurrencies they want to show on the user-friendly dashboard.
Web & Desktop Trading platform
As indicated, eToro uses a proprietary trading platform that they’ve created in-house. eToro’s web & desktop trading platform allows for social trading and individual trading. A trader does not need to download or install any software in order to use their platform. The platform can directly be accessed by a web browser and is considered as the broker’s best trading platform.
eToro’s trading platforms are easy to use and simple to understand. With a range of price alerts and notifications, a trader will remain updated with regards to the direction he/she set, which can be extremely useful as it provides easy tracking of the price fluctuations.
eToro’s charting has great visual characteristics with various tools that can be used for better analysis. There are also numerous orders together with stop-loss configurations that control the trading process better. Traders will also have the option to enable icon trade or one-click trading.
Traders can also find all their trading data defined by any specified timeframe as well as cash flows, fees and orders history under the ‘Portfolio” tab.
Mobile Trading Platform
eToro has created a mobile-friendly version of its social trading platform. The mobile app can be downloaded for free at Apple App Store and Google Play Store, subject to the type of operating system of a trader’s mobile device.
With the app, a trader can access all the main features of the web-based trading platform. These features include: browsing strategies and assets, traders, executing trades, checking real-time feeds and account managing.
eToro mobile trader allows traders to remain connected at whatever time through the eToro App. iOS and Android mobile devices are supported. In our opinion, it is regarded as the best trading app in the industry.
BROKER ACCOUNT TYPES
eToro offers three trading accounts which are regulated by CySEC, FCA, and ASIC. eToro provides a fully digital and hassle-free process when opening an account with them. Furthermore, traders are able to swiftly open an account that can be done within a day.
Retail Clients Account
eToro offers an account for a Retail Client who is not a professional.
Retail Clients has access to all eToro’s trading assets and they may trade by themselves or by using Copy Trade. Although Retail Clients’ leverage is limited, these clients receive certain securities such as recourse to the FOS (Financial Ombudsman Service) and coverage by the ICF (Investor Compensation Fund). In addition, retail clients get margin closeout restrictions and negative balance protection.
The Retail Clients Account or Retail Investor Account is created by eToro for non-professional traders. The Retail Clients Account offers both manual trading and Copy Trade functions. This account has strict margin closeout limitations and negative balance protection. With this broker account, a trader’s losses will not exceed his/her initial deposit.
Professional Clients Account
The Professional Clients Account is created for experienced and professional traders. Leverage for professional clients at eToro can be equal to 400:1 with negative balance protection.
In order to be eligible for a Professional Clients Account, a trader needs to successfully pass a test in order to decide if the trader can be seen as a professional client.
A Professional Client at eToro may open leverage positions of up to 1:400 for particular trading instruments and will get a saving in his/her current margin rates.
Islamic Account
With an Islamic account, eToro ensures that there is no Riba during the course of a contract. An Islamic account can be opened on eToro by opening a real account and to deposit at least $1,000 in the account.
HOW TO OPEN AN ACCOUNT
The broker’s account opening process is easy, fast and fully digital. Furthermore, traders can expect to register and open an account within a single day.
In order to open a trading account with eToro, you can follow the steps below:
- On their website, select the option “Trade Now” or “Join Now”.
- Provide eToro with all your personal information on the electronic form provided.
- Read through eToro’s privacy policy and Terms & Conditions.
- Confirm your agreement with eToro by selecting the applicable box.
- Select the “sign-up” option by submitting your information.
Verification of eToro account:
As a result of eToro’s policy and other regulatory requirements, it is essential for traders to complete their profile’s verification procedure and upload the required documents.
For verification purposes, traders need to provide eToro with the following:
- A clear copy of a government-issued ID or a valid passport; and
- A clear copy of a recent bank statement or utility bill that is not older than 6 months.
SOCIAL TRADING, DEMO ACCOUNTS, AND COPY TRADING
eToro is considered as one of the world’s best social trading networks with countless users from more than 140 countries. They have been able to use put their experience into creating useful trading tools.
Their CopyTrader system and CopyPortfolio investment strategies both rely on their user-base, and are created to assist traders in discovering innovative techniques to make earnings.
Copy Trader eToro
eToro’s CopyTrader allows traders to follow, like, and copy the trading activities of experienced and professional traders in real-time. The system offers a great way to automate traders’ trading habits. Traders can take advantage of CopyTrader to develop their trading skills by means of copying expert traders’ trading activities.
Follow these steps, if you are ready to start with copy trading:
- Open an eToro broker account
- Use the eToro platform to search for the top social investors
- When you’ve spotted a trader you’d like to copy, allocate a portion of your funds for copying him and let the copy trading begin.
Before you start copying, you should take note of the following points:
- A trader must invest a minimum amount of $200.
- A trader can only copy a maximum amount of 100 traders at the same time.
- A trader can only invest up to $2,000,000 in a single trader.
- A trader can only trade a minimum amount of $1 for a copied trade
- A trader can copy other traders in his/her virtual portfolio.
- A trader can only copy real portfolios.
CopyPortfolios
eToro’s CopyPortfolios or CopyFunds is an innovative, thematic approach to investing and is developed to assist traders in expanding their portfolios, to benefit from existing market opportunities, and to reduce long-term risk.
e Toro offers the following three types of CopyPortfolios:
- Top Trader CopyPortfolios
- Market CopyPortfolios
- Partner CopyPortfolios
LEVERAGE
Leverage is the total amount of times that a trader can invest beyond his/her current balance. For instance, if a trader’s balance is $500 and he/she is trading with leverage of 30:1, then that trader may invest $15,000. When trading on leverage, the money is in actual fact borrowed from the broker.
With eToro, leverage can be used when trading forex, stocks, ETFs, indices, commodities, and cryptocurrencies (in some situations). It must be noted that each trading instrument has its own maximum and minimum leverage limits. A higher leverage is allowable for eToro’s Professional Clients account holders.
WITHDRAWALS AND DEPOSITS
How to deposit into your eToro trading account?
eToro provides a range of payment options for its clients. A client may decide on any preferred payment option with the following instructions:
- Log into the applicable trading platform
- Choose the ‘Deposit Funds’ option
- Put in the total amount that you want to deposit and choose your preferred currency
- Choose your preferred payment option
What is the minimum amount that a trader can deposit with e Toro?
With eToro, traders can start trading with a minimum deposit amount of 200 USD. Except for the first-time deposit, all other deposits are required to be a minimum of 50 USD. eToro offers a range of deposit options, such as:
- PayPal
- Skrill
- Credit Card (Diners Club, Visa, MasterCard, Maestro)
- Neteller
- Wire Transfer (minimum deposit of 500 USD)
It must be noted that a minimum deposit of 10,000 USD is necessary when opening a corporate account with eToro.
How to withdraw from your account?
eToro’s clients can withdraw funds from their account whenever they like. The entire balance value in an eToro account can be withdrawn, excluding the amount of margin used. Funds can be withdrawn, and paid to the matching account, as formerly used for deposits.
CUSTOMER SERVICE
eToro’s customer service team is reachable 24/5 to provide professional support to their clients. Their client services are really good and they can be reached on a number of channels to get fast answers. A client can reach eToro’s client service through live chat and by a web-based ticketing system where the client will be answered by email.
eToro provides customer service in 21 different languages that are offered on both mobile and web trading platforms. They can also be reached through social media platforms such as Twitter, Linkedin, Facebook, YouTube, and Instagram.
The greater part of eToro’s customer support is done through their Help Center, which has an option to submit a help ticket and contains a FAQ section.
SAFETY AND SECURITY
Is eToro safe?
eToro wants their clients to think smartly when making investment choices, since trading involves risks. Therefore, eToro’s trading platform provides a variety of responsible trading tools. The broker is also completely regulated, following the strict guidelines that are set out by FCA CySEC, and ASIC.
At eToro, traders that are just starting out will get assistance when trading online for the first time. Professional traders have access to risk-management tools to assist them in order to trade sensibly.
eToro makes use of the highest cyber security standards to ensure that their clients’ money and personal information are safe and protected. Their clients’ moneys are kept safe in top-tier banks and their clients’ personal information is secured under SSL encryption.
RESEARCH & EDUCATION
Research
eToro provides research in 21 different languages. The broker has decent technical analysis tools as well as certain analyst recommendations and market sentiment indicators.
- Decent interactive chart
- Trading ideas
- User-friendly
- Analyst recommendations
- A lack of fundamental data
- Lack of/poor quality news flow
There is a lack of recommendations for certain popular stocks, such as average price target, analyst consensus, hedge fund -and insider trading sentiment.
The broker’s platform has a lack of fundamental data on stocks and there are no fundamental data available for asset classes. In order to receive a list of daily market highlights, traders can sign up for eToro’s market analysis newsletter.
The broker has a great charting tool available with many technical indicators to choose from. Traders do not have to spend any time setting up their indicators as the broker’s charts are automatically saved. Unfortunately, traders can only view data for the past 6 months.
In our opinion, eToro’s news feed is not considered an official news feed. The news feed is rather a Twitter feed with messages posted by the public.
Research papers are available on the website and can be downloaded for free. These user-friendly papers provide decent interactive charts and trading ideas.
Education
There is a lack of educational tools available, with only a few basic videos on investing & the financial markets, a demo account for practice, and an introduction guide.
Other educational resources include the following:
- Blog
- Podcast
- Learning tab
eToro has been a fintech frontrunner for years and has finally launched a podcast section. These podcasts cover a number of different topics, ranging from the basics of trading to advanced market analysis and insights.
eToro’s podcasts are led by Eytan Weinstein and Naor Meningher. They are accompanied by different big-name guests that include some of the globe’s top experts in the industry.
Every podcast covers a different topic, such as economics, finance, and business management. Podcasts also offer traders with everyday tools and tips on trading, starting a business, managing a business, etc.
GLOBAL AWARDS
The broker has been nominated for the following global awards:
- 2020 Top Crypto Trading Mobile App
- 2020 Top Forex Broker (Australia)
- 2020 Top Copy Trading Platform
CONTESTS
From our research conducted on eToro, there is no evidence of any trading contests or competitions held by the broker.
IS ETORO SAFE OR A SCAM?
Is eToro legit?
- Trust – The broker is fully regulated by the CySec and FCA.
- Security – Clients’ funds are secured by several security protocols
- Privacy – eToro will not share its clients’ private information without permission.
There are some people that consider eToro to be a scam broker, but this is not the case. eToro has compiled a comprehensive guide to assist people in choosing real brokers and to avoid scams.
Traders should take note of the following points before considering trading with eToro:
- The company is regulated, but not every trading platform that they offer is regulated. The company is regulated by CySEC, FCA, and ASIC. These regulations are there to ensure that all investors are protected. Regulated trading platforms like eToro act under strict supervision and can therefore not be considered as scams.
- The company is safe and secure. Traders should at all times try to find security signs on their browser prior to trading. At eToro, clients’ funds are protected by tier 1 banks. Clients’ personal data is also protected under SSL encryption.
- The company offers all-day support. Customer support is 24/5 available and clients will always be assisted, no matter the extent of the problem.
- The company has real clients. In order to guarantee transparency, the broker encourages its clients to use their actual names and photo. New clients also have to follow strict verification procedures.
- Technology and design. The broker as an easy to use interface that provides some of the best fintech instruments, online educational courses on trading, etc. A scammer will not go to such lengths to replicate a similar interface.
- The company is regularly in the press. Scams are usually reported and will not be published by the media. Clients should always approach trustworthy sources to see if a certain platform has been reported as a scam or not.
- The company warns its clients of the risks. All trading includes risk, whether it is old-style stockbroker trading or CFD (Contract for Difference) trading. It is therefore essential for clients to make sure that they take the necessary precautions for avoiding risk while trading sensibly. eToro also provides several tools for its traders to lower their risks when trading.
- Trading is not the same as gambling. Unforeseen events can always result in a loss. At eToro, clients are kept updated and informed in order for them to expand their portfolios and to lower risk.
- Reasons for people to say that eToro is a scam. As you know, trading involves risk. When traders lose money, they are quick to blame a trading platform such as eToro, saying that the platform is a “scam.”
CONCLUSION
As one of the most comprehensive reviews on eToro, we can conclude the following:
Over many years, the broker has proven itself as trustworthy within the trading-environment and is highly recommended. They have also developed a strong rapport between their clients.
Even though eToro focuses on several trading instruments, traders will find the platform very valuable for trading or investing in cryptocurrency. eToro’s extra features, such as CopyPortfolios and many graphs, surely gives the platform an edge above the rest.
eToro is a great option for traders that are interested in using the platform for both crypto and fiat trades. eToro is an excellent platform for trading Forex and stocks, or for traders that merely wants to invest in pre-built portfolios in various industries.
With eToro, traders do not have to concern about the safety of their funds, and deposits and withdrawals are processed swiftly and reliably.
eToro is a frontrunner in the industry with regards to design, versatility, and user-friendliness of their platform. Their range of social trading products also has a nice touch to them. eToro is also regulated by some of the top-tier bodies in financial regulation.
They are one of the most innovative trading platforms in the world with their combination of social trading and user-friendly trading platform that has attracted countless faithful clients over the years of operation.
