eToro is a brokerage firm founded in Israel in 2007. This trading platform specializes in offering CFD products, cryptocurrencies, stocks, and ETFs for a large customer base of around 11 million investors. eToro operates in more than 140 countries. Even though its headquarters are in Israel, the company also has legal entities registered in various…
eToro is a brokerage firm founded in Israel in 2007. This trading platform specializes in offering CFD products, cryptocurrencies, stocks, and ETFs for a large customer base of around 11 million investors. eToro operates in more than 140 countries. Even though its headquarters are in Israel, the company also has legal entities registered in various tier-1 financial jurisdictions. These include the US, Australia, and the United Kingdom.
eToro is a well-known fintech company and considered a safe broker, regulated by many top-tier authorities.
One of eToro’s main appeals is a feature known as ‘social trading’ which allows users to interact with each other in a social-media like fashion. The platform allows for this sort of engagement between peers by providing a messaging feature, a social feed, and other similar add-ons that we will explain in further detail later on in this review.
According to the company’s own stats, eToro has facilitated more than 300 million trades during its history and the company is expanding its operations progressively, now focusing on entering the Asian markets to provide brokerage services to China and possibly Hong Kong as well.
The following is a list of eToro’s subsidiaries registered in some of the countries where this broker operates:
United Kingdom: eToro (UK) Ltd. regulated by Financial Conduct Authority (FCA)
Australia: eToro AUS Capital Pty Ltd. regulated by Australian Securities and Investments Commission (ASIC)
Cyprus: eToro (Europe) Ltd. regulated by Cyprus Securities and Exchange Commission (CySEC)
United States: eToro USA LLC regulated by US FinCEN
Table of Contents
Pros and Cons of eToro
Easy Account Opening
CFD and Forex Fees
User-Friendly Website and Mobile Trading App
Withdrawals can Take Longer Than Usual
Best Social Trading Platform
Great for Cryptocurrency Trading
Why should you read this review?
We researched and wrote this comprehensive review. It will help you save time in reviewing what eToro has to offer before you make a decision on which brokerage firm you go with.
You can ultimately use this, and other similar reviews, to compare certain key features and characteristics of the best trading platforms out there. You can then short-list them and give them a try through their demo accounts – if available – to finally choose the one you will use to conduct your trades.
There are many details to go through when picking the best brokerage. It may seem overwhelming as you have to figure out which one provides the most competitive fees, the best customer service, the most user-friendly trading interface, and, of course, you want to make sure your money is safe.
Trading Platform Overview
eToro is a multi-asset social trading platform. It offers a wide variety of financial products including stocks, forex pairs, commodities, exchange-traded funds, and cryptocurrencies, among others. Some are traded via CFDs while others are traded directly.
eToro was also one of the first brokers to offer a social trading feature and it could be said that they pioneered the whole trend. These days many rivals are offering similar alternatives, even though eToro continues to lead the way in this particular field.
Social trading is basically a combination of a social-media-like environment within a platform. Traders can connect and chat via eToro. Meaning that other traders can follow them and check out what they are trading and how their performance has been in the past.
They have introduced two innovative products in this field: CopyTrader™ and CopyPortfolios™, both of which I’ll explain in more detail later on.
Additionally, eToro platform has gained its reputation as a safe and attractive online broker for both experienced and amateur day traders. This is especially due to its low trading fees and user-friendly platform.
eToro offers a web-based and a mobile proprietary platform for trading, no desktop platform is available.
This broker’s trading interface features 26 different languages and it looks very polished and modern, possibly appealing to a young audience in opposition to the more classical trading offered by other brokers.
One downside of eToro’s platforms is that the workspace is not customizable. Traders have to feel comfortable with the interface as is.
Both platforms – web and mobile – offer a two-step login, which increases their level of security for users. Additionally, their search functions are predictive and allow the trader to easily browse through eToro’s large number of available securities.
Both versions include price alerts and notifications, which are particularly useful, and they can be sent via push notifications.
Reports are available under the ‘Portfolio’ option and traders can easily find a summary of their trades, their market value, and the fees paid. Additionally, an account statement is also available periodically, summarizing the operations made during a certain period.
Trading fees charged by eToro are on the low-end of the industry. The platform doesn’t charge any fees for trading US-listed stocks and ETFs, a great feature that sets it apart from a wide range of platforms out there.
For CFD trading, eToro’s fees are relatively low and they are built into the spread.
For example, for stock indexes, the S&P 500 CFD trading fee is commonly 0.75 while the Europe 50 CFD trading fee is 3.
Meanwhile, forex pairs are fairly expensive to trade by using the eToro platform, as the cost of trading EURUSD is 3 pips while many other platforms charge between 0.6 and 1 pip per trade.
As for other types of fees, eToro charges a $10 monthly inactivity fee if the user fails to log into the account for 12 months. For overnight rollover fees it depends based on current market conditions.
There are four types of orders that can be placed on eToro:
Market: a market order is executed at the price quoted at the moment the order is placed.
Limit: this order sets a maximum or minimum price at which the financial asset should be bought or sold.
Stop-loss: this order is executed once the price of the security reaches a certain level.
Trailing stop-loss: an order that allows the trader to lock in gains as it executes the sale of the asset only if the price goes down (or up for a short-position) to a certain point, while it remains inactive while the price keeps moving in favor of the trade.
Markets & Products
eToro offers hundreds of different financial assets to trade. These include: currencies, indicies, ETFs and cryptocurrency trading. Each asset class can be traded with a different investment strategies.
eToro’s portfolio of available financial products is not the biggest but it is definitely diverse enough to be considered decent and satisfying for most traders.
One upside of eToro compared to CFD-only brokers is that you can also trade real stocks, ETFs, and cryptos, which means that you can actually hold these assets directly and not via CFDs.
Meanwhile, eToro also offers CFDs for other financial assets including commodities and stock indexes along with certain asset management solutions that come with its social trading approach, such as eToro’s Copy Portfolios™ and Copy Traders™ solution.
The Copy Portfolio™ alternative allows traders to copy a pre-designed portfolio offered within the platform, either by eToro’s team or by other traders, to mimic their performance by taking the exact same holdings. The platform takes charge of the account and modifies the user’s portfolio based on the changes that the copied portfolio makes over time.
Meanwhile, the Copy Trader™ solution allows traders to browse through a list of traders within the platform to pick the best performing traders to copy their portfolios.
Both of these features are very attractive for passive traders and for inexperienced traders who are just starting out and could benefit from gaining insights about how others invest their money before they start making their own trades.
eToro offers technical analysis tools along with some recommendations by analysts, but lacks a bit on the fundemental data.
Each financial asset has its own market sentiment tracker, which indicates the percentage of traders inclined to buy or sell the security along with comments from analysts for certain popular assets.
Charting tools are alright, as the platform features more than 70 technical indicators and charts are automatically saved. However, the longest time horizon permitted by the charting tool is 6 months, which is definitely disappointing.
On the other hand, the news feed is limited to tweets and comments from traders within the platform but no major media outlet such as Reuters or Bloomberg is included.
Furthermore, the fundamental data provided for individual stocks consists of basic financial ratios but no historical record of balance sheets, income statements, price targets, or earnings estimates are included.
To some extent, it can be said that eToro’s main strength is its social trading feature which allows the eToro community to share trading ideas between them while no relevant third-party analyses are offered within the platform’s interface.
Education is definitely not the strongest suit of eToro as the educational material offered by this broker is limited to platform tutorials and frequently asked questions that intend to address certain matters regarding the platform’s functionalities, the financial assets available, trading fees, and other similar topics.
However, the demo account helps beginners in their process of learning without having to commit any money to their operations at first.
The customer service provided by eToro is decent, even though it lacks in a few areas.
There’s a live chat feature but it is a bit hidden within the FAQ section and traders have reported that representatives are busy and no attention is available during the weekends.
Meanwhile, there’s no e-mail or phone support, as this broker relies on support tickets sent through the trading interface. The responses to these tickets are sent to the e-mail inbox of each user and the response time is typically fast – 24 hours or less.
Overall, eToro’s customer service is not the best out there but it should be sufficient to deal with basic issues.
Withdrawing money from eToro is easy. It has a cost as eToro charges a $5 withdrawal fee. It requires a minimum amount of $30 per withdrawal.
Money can be withdrawn to a debit or credit card, electronic wallet, or bank account. The user must be aware that withdrawing money to a method that has a base currency different than the US dollar will result in an extra conversion fee.
For cyptocurrencies, the eToro wallet is available (eToroX), which is a multi-currency crypto wallet.
Credit, debit card, and electronic wallet withdrawals are sent instantly while bank transfers typically take 2 business days to be received.
How to Open an Account with eToro?
The process of opening an account with eToro is simple and fast and it can be done 100% online. It will take only a few minutes to go through the registration. You can even take a look at the web platform even if you have not yet registered.
eToro’s trading services are available for most countries. There’s a sizable list of countries that are banned from opening an account with eToro including Albania, Canada, Cuba, Iran, Iraq, Jamaica, Japan, Nicaragua, Pakistan, Syria, and Serbia. Also, US citizens outside the US territory cannot open an account with eToro either.
Furthermore, there are two types of accounts available for eToro traders which are the retail account and the professional account.
Additionally, there’s a demo account available in case you want to test eToro’s platform before depositing your money. This account comes with an available balance of $100,000.
Before you deposit money into the account you will have to go through an ID verification process that will require proof of identity and proof of residency.
The process typically takes less than a day to be completed if all the required documents are sent promptly.
You’ll also have to take a quick survey intended to assess your trading knowledge and experience.
Funding your eToro Account
Depositing money into an eToro account is very easy and there are no deposit fees.
Money can be deposited by using a credit or debit card or an electronic wallet such as PayPal or Skrill and it will be credited instantly. Bank transfers also permitted but they take up to 7 days to be cleared.
Minimum deposit for clients in the US and Australia is $50.
Minimum deposit for clients in Russia, China, Hong Kong, Taiwan, and Macau is $500.
For bank transfers, the minimum deposit is $500.
Meanwhile, the professional account requires the same minimum deposit but allows the user to take on more leverage for transactions, as long as the trader meets certain criteria that qualifies him as a professional client.
In some cases, eToro may require that the first deposit is made via a credit or debit card, but subsequent ones can always be made by using any of the other methods accepted by the platform.
One downside of this broker though is that eToro offers one single currency base for its accounts, the US dollar, in contrast to many other online brokers that offer five or more different currencies for their accounts.
As a result, traders must pay a conversion fee if they deposit funds on their eToro account by using a payment method that features a currency different than the US dollar.
Conversion costs start at 50 pips, which is approximately 0.46% of the amount deposited into the account.
Finally, you can only deposit money from accounts in your name.
Is eToro Safe?
eToro is considered safe and regulated by the top financial authorities. eToro and its subsidiaries are overseen by tier-1 financial regulators. These include the Financial Conduct Authority of the United Kingdom, the Cyprus Securities and Exchange Commission (CySEC), the US FinCEN, and the Australian Securities and Investments Commission (ASIC).
Additionally, UK investors are protected by the Financial Services Compensation Scheme (FSCS), while European investors are protected by the Investor Compensation Fund designed for Customers of Cypriots Investment Firms.
eToro is not a publicly-traded company.
What’s best about this trading platform?
There are many good things to say about eToro and, in my view, those positive elements put this broker at the top of the list of the best brokers you can consider if you starting out as a trader.
On the other hand, eToro’s fees for CFDs are below the market average, even though its forex broker fees are higher compared to other brokers.
Additionally, eToro’s social platform has an incredible design and it is a captivating alternative for those who are starting out their journey, as traders can connect with more experienced peers or seek potential trading ideas to start off by using the social feed.
However, you should be aware that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with t. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Summary and Conclusion
eToro is an online broker founded in Israel in 2007 and is a safe, zero-commission stock broker. The platform offers a wide variety of CFDs and forex pairs along with the possibility of trading US-listed ETFs and stocks for free. This online broker operates in more than 140 countries and has over 11 million clients based on recent reports. One of biggest benefits of eToro is the social trading/copy trading feature. Account opening can be done online and the registration is straight-forward. Before depositing money into the account an ID verification process must be conducted.
There are about 30 countries that are currently banned to open an account. The minimum deposit to open an account with eToro is $200, even though the amount varies for residents of Israel, Russia, China, Hong Kong, Taiwan, Macau, Australia, and the United States. For bank transfers, the minimum deposit is $500. There are no deposit fees.
Users can sign up for a demo account before depositing money into eToro and they are entitled to a balance of $100,000.
eToro is a multi-asset platform that offers a decent selection of US-listed stocks, ETFs, forex pairs, cryptocurrency trading as well as CFD. The trading platform comes in 26 different languages. Charting tools include more than 70 technical indicators.
To summarize, we can recommend eToro as the best social trading platform and their zero-commission stock trading.
Don’t Have Money to Open a Reasonable Forex Live Account? Don’t Worry
Don’t Have Money to Open a Reasonable Forex Live Account? Don’t Worry
This is one of the questions I am usually asked. There are so many traders who have been learning and practising for several months or even years. Now, they are ready to open a live account and start trading with real money. But the problem is, they don’t have enough money to open a live account with a true ECN/STP broker.
As you know, 0.1 lot is the minimum lot size that true ECN/STP brokerssupport. The reason is that the true and real liquidity providers don’t support smaller lot sizes (micro lots), and, as true ECN/STP brokers are directly connected to liquidity providers, they transfer the orders directly to them, and if the orders lots sizes are lower than what liquidity providers support, they reject the orders.
Therefore, when you want to open a live account with a true ECN/STP broker, your account size has to be large enough to handle the minimum of 0.1 position. For example, if you open a $1000 account, and you locate a trade setup that needs a 100 pips stop loss, then the risk of taking this trade setup will be about $100 which is 10% of your account. Taking a 10% risk is too much, specially when you are a new live Forex trader. If you want to take a 3% risk with this trade setup, then your account balance has to be about $3,400 at least. But the problem is, some traders cannot afford to open a $3,400 account. I know some good and serious traders who have learned and practised enough and are now ready to start live trading, but cannot open even a $500 account.
Before talking about the real solution, I’d like to explain why you should not open a small live account with a true ECN/STP broker. Many of them allow you to open even a $500 account. But as 0.1 lot is the minimum lot size you can take, then you will have to take too much risk, and so, you can easily wipe out your account. Not only you will not be able to grow your small account, but you will easily lose that money. So, it is wasting of money to open a too small account that cannot handle the risk.
This is true that I always say you should start with an as small as possible live account, but I don’t mean a too small account that cannot handle the minimum risk you have to take. Your account has to be as small as possible, but it has to be big enough to handle the minimum possible risk.
The other thing is that, if you see a broker claims to be a true ECN/STP broker, but it offers micro-lots (0.01) too, it can have two meanings:
It is not a true ECN/STP broker and it is market maker.
It has ECN/STP and market maker system at the same time, and they put the small accounts in market maker system, and large accounts on ECN/STP, because it is usually the novice traders who open small accounts and most of them wipe out their accounts very easily. So, the broker wants to earn all the money that small account holders lose.
So, opening a too small account with a false ECN/STP broker, or a true ECN/STP that offers micro-lots is not the solution.
The last thing I’d like to tell you before talking about the real solution is that when you see you cannot open a live account with a reasonable account size with a true ECN/STP broker, you may decide to open a small account with a true ECN/STP, but instead of trading the long time frames that usually need wide stop loss orders, you decided to trade short time frames to have tighter stop losses to risk less. For example, while a 100 pips stop loss equals a 10% risk for a $1000 account, a trade setup with a 30 pips stop loss will have a 3% risk for such an account. And you can locate such trade setups on shorter time frames only. You can never take a position with a 30 pips stop loss on the daily or weekly chart.
Theoretically, trading the shorter time frames looks like a good solution. But it is terrible in reality. Trading the shorter time frames will be nothing but wasting of a lot of time and money. Before you come to this conclusion, you will waste and wipe out several accounts. You will stop trading short time frames after having a terrible back and neck pain (because you have to sit at the computer for several hours per day to trade the short time frames).
So, trading the short time frames is not a good solution. Forget about it: Forex Scalping Facts And Fictions
What if you borrow money from the others, trade with it, and pay it back when you made some profit? What if you ask the others like family members and friends to invest with you and allow you to manage their funds, so that you can open a big account with their money?
That is the most stupid thing a trader can do. Never even think about it. Even if someone, like your wife or parents offered you some money to help you open a big enough live account, you must refuse it immediately. The reason is that trading with the others’ funds creates some different kinds of emotions that prevent you from thinking and deciding properly. Therefore, you will make terrible mistakes and you will lose the money definitely. What will be left for you is the shame that will remain forever. You will feel guilty because of losing the others’ money. Never even think about it. It needs several years of successful and professional live trading to be able to manage the others funds and account. You will have a long way to reach that level. Even, 99.99% of the too professional and experienced traders don’t agree to trade with the others’ funds.
So, forget about this terrible solution too.
What Is the Real Solution?
There is a great and hassle free solution for this small problem. Yes, this is a very small problem from my point of view. It is not even a problem. It is an opportunity. Indeed, you are lucky if you don’t have enough money to open a reasonable live account with a true ECN/STP broker. It is a chance for you to keep on demo trading and mastering your trading system even more.
As long as you don’t have enough money to open a reasonable live account, you should keep on demo trading and practising your trading system, and saving money at the same time. No matter how long it takes. There is no rush. Keep on demo trading and saving money. When you have enough money, you can open a reasonable live account while you have already banked a lot of experience through demo trading. You are much luckier than the others, because you start live trading when you have already mastered your trading system perfectly, whereas many others who have enough money, start live trading when they are not ready for it. So they lose a lot and usually many of them give up on Forex trading.
As you see, sometimes having money is bad luck. Sometimes it is lucky to have no enough money.
All psychologists say that every person needs to know itself and to know his or her own level of patience and anxiety levels, and that practice is a good way to do. But do not abuse it. I think it works in the same way with the Forex demo accounts. Too much demo really sucks and will never prepare you for the real trading. Trading demo too much time won’t make you a better trader but a better loser. Once you know how to use the tools on your trading platform and you have the basis of the trading, close the demo and get on real money. You don’t need six months for that. Think it in this way: if an average human life is 70 years, no one needs more than one single year to learn how to walk. Here are a few tips for you:
Even if you are on real money now, you can still use the demo to test a new strategy (strongly recommend to be your own strategy and not someone else’s) or you can use the demo to test how a new instrument acts. For example when Bitcoin was launched, the demo account was a better choice than the real money account, to see how BTCUSD is trading.
If you like the automatic trading, you can use the demo to test the EA you just bought or maybe build one yourself.
When you start to trade on demo, at least ask your broker to make the demo as big as your future real money account. Is really useful to trade 50000$ on demo while you will only deposit 1000$ when opening the real account.
Even if you trade on a demo account, – meaning simulated market conditions – I suggest making realistic assumptions. Use a margin of one up to five pips when you place your entry, stop losses or take profit orders as in the real market conditions quite often happens to see them executed at a different value than what your set ups – especially for entry orders.
The simulated trading environment does provide a trader with the opportunity to get used to the software he will be using or with his broker’s trading conditions. Use the demo account only for this purpose and do not try to build a reputation by linking the account on websites as www.myfxbook.com or www.fxstats.com because no one cares how good you are on demo.
Least but not the last, try to avoid the demo accounts with unlimited use. If you can’t stop to trade on demo your broker will, by denying you the access to the demo and inviting you to open the real money account.
the Demo accounts are there for you to get started and actually understand if the broker you have chosen is the right one for you. but it is also like when you play a game on your mobile and you play against someone who bought his levels , no matter how good you are his tools will kick your ass every time. forex works much in the same way . in the end you can simulate only so much before it becomes redundant.
The Importance of Demo Trading and Your Demo Account
The Importance of Demo Trading and Your Demo Account
I see that some traders believe that demo trading is not a good practice because you know that you are trading with the demo money, and so you don’t trade with discipline. They believe demo trading causes the novice traders not to learn to trade with discipline, and this will be ended to failure finally. When you know you are not trading with your real money, then you don’t care to lose, and so you can make all the possible mistakes, like taking positions with any trade setup (either weak or strong) you see, taking positions while there is no trade setup, over-trading and… . It will be a disaster if these bad actions become a habit in you.
This is true only when you are not a serious learner and you are practicing Forex just to see what it is. So you open a demo account and you take some positions to see how it works. You don’t care if you lose.
However, when you are serious to become a professional and full time-trader, and when you want to make a living through trading, then you should behave completely different.
Before you open a demo account and start demo trading, first you should learn everything you need to know. I have explained this in details here: Do You Think You Are on The Right Track to Become a Profitable Trader?
First complete your knowledge and then start demo trading. Spend enough time to follow the videos and articles I have listed in the above article. If you start demo trading while you are not ready yet, you will only make yourself confused, frustrated and disappointed. Forex makes money. Do not let your mistakes make you think that you can not make money through Forex.
Now let’s say you have learned everything you need to learn, and now you are ready to gain experience through demo-trading. This is a very important stage that if you don’t pass properly, you will not become successful with live trading.
Aren’t you here to make money through forex trading finally? If the answer is yes, then you should pass all the stages very carefully and patiently, otherwise you will not get any good result. I can not emphasize on this more. It is very important.
Make sure to read the below articles carefully:
How To Become a Successful Forex Trader
Are You Still Looking for the Forex Holy Grail?
Do You Think You Are on The Right Track to Become a Profitable Trader?
There are a few things about demo-trading I have to emphasize on:
1. Take the demo trading as serious as possible. Forget that it is the demo money and nothing happens if you lose. You can blow up your live account as easy as you blow up a demo account. So, when you open a demo account, forget that it is a “demo” account. Treat it as a live account and your real money. Do you like to lose money with your live account so easily? If not, then do not lose with your demo account so easily too.
The discipline you need for Forex trading is something that you have to “build” in yourself. You have to “build” it on your own. And demo-trading is the foundation of your “Discipline Building”. If you trade carelessly with your demo account, you will do the same with your live account too. If you take positions with your demo account while there is no strong trade setup, you will do the same with your live account too. If you over-trade with your demo account, it becomes a habit, and you will do the same with your live account too. If you…
Conversely, if you forget that you are “demo” trading, and you take your demo account as serious as your live account and real money, and you wait for the strong setups only, and you do not over-trade and you don’t take too much risk, and you set the stop loss and target properly, and you care about the losses as you care about losing with your real money, then the discipline you need to have to make money through Forex trading, will be built and matured in you, and you will be successful with your live account definitely.
2. Make sure to keep on demo trading and not to open a live account, as long as you have not been able to repeat your success with your demo account.
Does it make sense to open a live account and trade with the real money while you have not become able to make money with the demo account yet? If it doesn’t make sense, why are you trading with a live account then? You think live trading is different? It is not. When you lose with the demo account, you lose with the live account too. If you are not knowledgeable, experienced and disciplined enough to make profit with the demo account, you will not make profit with the live account too.
You will always have time to open a live account and start live trading. Don’t do it when you are not ready yet.
3. Your demo account size has to be the same as your live account size. I mean if you are supposed to open a $1000 live account in future, then practice with a $1000 demo account too, and do not open a $100,000 demo account for example. This helps you behave with your demo account exactly as your live account. This helps you take your demo account serious.
Keep in your mind that your demo account has to be treated exactly as your live account. Although you open a demo account for free, but it is not “free” in reality. You are spending your time on it. You are building your experience and discipline with it. So not only it is not free, but it is too expensive and valuable. It is the “foundation” of your business.