ETORO - Our Pick for Social Trading
eToro is a leading global social trading and investment network. Its mission is to revolutionise the way people invest and trade in the financial markets. The eToro platform enables investors to easily track, follow and mirror the trades and investments of other eToro users, replicating trading strategies with just a few clicks.
eToro also has a user-friendly online trading platform and mobile app suitable for casual investors, as well as beginners. The mobile application allows for easy trading on the move. Being a social trading platform, eToro enables users to view the portfolios of other investors and copy them automatically to their own account.
This allows you to have the benefit of comparing professionals in terms of forecasting performance. Users can also opt to learn from others by copying previous trades made by investors with similar accounts or profiles.
ETORO Review Contents
eToro Summary
In 2021, eToro is our top choice for social trading. The user-friendly platform can be a bonus for less-experienced traders who need assistance. eToro’s technologies comprise proprietary portfolio management tools that can help people of all experience levels with stock trading and options.
The platform allows anyone to invest in forex, commodities and equities by choosing automated investment strategies that represent the overall market as well as those specific to stocks, commodities or currencies.
eToro also allows users of its social investing features to follow other investors’ activities and learn from their decisions and strategies. Retail traders looking to crowdsource investment ideas using the power of copy trading, as well as expert traders looking to be compensated for exchanging their ideas with other traders, would love eToro.
However, eToro may not completely suit investors who favour high-volume trades due to the higher spreads and limited maximum trade sizes. It’s also worth noting that, despite lowering spreads and offering zero-dollar commissions for US stock trading, eToro is marginally more expensive than most of its rivals for trading forex and CFDs. In addition, eToro’s traditional research techniques and tools are limited in comparison to its competitors.
Why Choose eToro?
eToro is one of the most trustworthy and adaptable brokers available. eToro is used by millions of investors all over the world. Its platforms and tools have significantly improved over the years. eToro provides traders with an online trading platform that allows them to trade over 70 markets worldwide using the industry-leading social trading network. From spreads as low as zero, eToro gives you the opportunity to invest in markets you never considered before.
As a result, eToro is one of the best investment vehicles available in the financial market. eToro is also one of the most well-regulated brokers, with operating licenses in several regions. Its social trading features are helpful, but they can be restrictive at times. Overall, however, eToro is one of the most reliable ways to invest safely.
Thousands of Financial Assets
The eToro platform provides traders and investors with access to over 2,000 financial assets, such as cryptocurrencies, stocks, ETFs, indices, commodities, and currencies, all of which can be invested with or without leverage, offering unrestricted access to a range of investment options.
No Commission for Long or Non-leveraged Positions
On eToro, you pay no commission when you enter a long, non-leveraged position in stocks or ETFs. There are no hidden charges, commissions, or spreads, and you take control of the underlying asset. Other asset classes at eToro have attractive spreads, including spreads as low as 1 pip for common Forex pairs.
It is important to note that short or leveraged positions are not eligible for zero commission. Other costs can be incurred.
FREE Insurance**
Insurance up to 1 million Euros/GBP/AUD is available for free.
For the protection of its customers, eToro has acquired an insurance policy from Lloyd’s of London. The insurance covers damages suffered by eToro (UK) Ltd., Eligible Clients (of eToro (Europe) Ltd., and eToro AUS Capital Pty Ltd.) in the event of eToro’s insolvency, as well as cases of misconduct.
The insurance covers: up to 1 million Euros, British pounds, or Australian dollars (depending on the controlled entity), up to the gross cap purchased by eToro, and subject to an excess sum, cash, securities, and all CFD positions are protected by the insurance.
non-CFD (Crypto-asset trading), however, is not protected by this insurance.
Premium Social Trading
eToro is the world’s largest trading and investing group, with over 10 million members from over 140 countries. eToro is home to a diverse community of talented and seasoned investors, many of whom have outperformed market benchmarks.
The eToro News Feed works similarly to a social media forum, allowing traders and investors to connect, exchange ideas, insights, and trading strategies, as well as make new friends.
With eToro’s Top Trader CopyPortfolios, you can be a part of the conversation or trade in tandem with crowd sentiment by investing in a people-based portfolio.
Trading with Experts
eToro’s Investment Portfolios – CopyPortfolios – are collections of assets or individuals that have been grouped based on a common theme or strategy. eToro provides thematic CopyPortfolios that concentrate on cutting-edge markets. To tap into the knowledge of the crowd, some CopyPortfolios use advanced algorithms, AI, and machine learning.
The CopyTrader feature on eToro allows users to copy the trades of skilled, experienced, and knowledgeable investors. Each investor’s performance, including risk score, success/failure ratio, and other metrics, is transparently displayed. Some of the best eToro traders have consistently outperformed benchmark stats.
The Trader Charts, which were added to the eToro platform in 2016, are a valuable addition. These allow you to imagine the traders’ previous output and run simulations. On the chart, you can equate the trader’s output to that of other traders or other financial instruments.
After you’ve decided which traders to copy on eToro, you’ll need to determine how much to invest and how much you can afford to lose. You can reduce your risk by setting a “stop loss level,” which is the maximum loss you can incur before the system helps you stop copying this trader automatically. Although the eToro money and risk management features are basic – you can’t choose to only copy a particular asset class with a trader – they are simple and easy to understand for beginners.
Furthermore, eToro provides a free fully functional demo account for you to test out trade copying. This allows you to monitor “Popular Investors” and analyse and review their success in terms of gains using virtual money. This will provide you with a realistic picture of what to expect.
Excellent Protection for Your Funds and Personal Information
All funds that clients invest go straight into a segregated account. This ensures that your funds will be secure even if eToro goes bankrupt, which is extremely unlikely. eToro also adheres to the strictest security protocols to safeguard clients’ funds and personal information. Unless required by law, they do not share your details.
The CySec (Cyprus), FCA (UK), FinCen, and FINRA (United States), ASIC (Australia), and GFSC (Gibraltar), all have stringent rules that eToro adheres to.
With a FREE trial account, you can test the eToro platform’s simplicity and ease of use with up to $100,000. Enter and exit trades, build a portfolio, and practice your trading and investing skills in the virtual market.
History
eToro was founded in 2007 in Tel Aviv as RetailFX by brothers Yoni and Ronen Assia, along with David Ring, and is regulated in two tier-1 and one tier-2 jurisdictions, making it a secure (low-risk) broker for trading forex and CFDs.
They launched a Visual FX trading platform in September 2007. The first edition of eToro: the online trading platform uses graphic representations of different financial instruments to make trading quick and even enjoyable.
WebTrader, eToro’s cutting-edge, intuitive trading platform, was introduced in May 2009, allowing anybody, anywhere to exchange financial assets online. Professional trading tools were included in WebTrader for both inexperienced and experienced traders.
In 2010, the company introduced the eToro OpenBook social investment platform, which includes the CopyTrading feature, which allows investors to automatically access, follow, and copy the network’s top traders. Later that year, the company unveiled the first Android app for mobile access.
The business raised $31.5 million in 4-rounds of funding between 2007 and 2013. It gathered $27 million from Chinese and Russian investors in December 2014. It collaborated with CoinDash in December 2017 to create blockchain-based social trading. It raised another $100 million in a private investment round in 2018. Investment companies have poured more than $162 million into the business in total.
With an initial offering of 110 stock items, the company launched the opportunity to invest in stocks and CFDs in 2013. The FCA regulatory authority approved it to sell its services in the UK under the subsidiary eToro UK in the same year. Cryptocurrencies were added to the firm’s investment instruments in January 2014.
eToro’s Commissions and Fees
On the EUR/USD, eToro is a market-maker broker with a variable spread of 1 pip, which is marginally higher than the industry average. When it comes to fees alone, retail traders choose eToro for its social copy-trading network capabilities over its spreads.
For traders with balances between $5,000 and $250,000.00, eToro offers a VIP club membership with five levels ranging from silver to diamond. A dedicated account manager, reduced withdrawal and deposit fees, private signals, and exclusive assets, among other VIP-style account benefits, are on offer depending on the amount held.
The Popular Investor package on eToro has four tiers, from cadet to elite, where you can earn various benefits. This package offers a variety of benefits, including spread rebates, recurring payments, and management fees for elite status traders. Traders that are willing to let other investors copy their strategies are known as popular investors.
Overall, eToro’s pricing for physical cryptocurrency trading is similar to the industry average, with 0.75 per cent for bitcoin transactions, while its fiat for cryptocurrency conversion fee is 5%. Converting from crypto to crypto, on the other hand, costs just 0.1 per cent in addition to the existing spreads.
In addition to CFD shares, eToro supports fractional shares and has a zero-dollar fee for US stock trading (which is not open to US investors).
How Safe is eToro?
With a Trust Score of 93 out of 99, eToro is considered low-risk. eToro isn’t a publicly-traded company, and it doesn’t run a bank. Two tier-1 regulators (high trust), one tier-2 regulator (average trust), and one tier-3 regulator (low trust) have approved eToro. The Financial Conduct Authority (FCA) and the Australian Securities and Exchange Commission (ASIC) are eToro’s tier-1 regulators.
Investment Offerings
There are a total of 2361 tradable symbols on eToro. In terms of usability, eToro, as a multi-asset provider, goes above and beyond to ensure that traders have a good experience. For instance, eToro gives you the option of trading CFDs or the underlying asset straight out of the trade-ticket window. It’s subtle, but it’s a really powerful option.
eToro’s Platforms and Tools
The key innovation of eToro is the integration of self-directed trading and copy trading into a single trading experience. It’s an amazing mix.
Easy Operation
The ease with which users can perform simple operations and complete tasks, such as building watchlists and adding instruments by searching available markets, as well as directly placing trades from each watchlist, is at the heart of the eToro trade platform experience. In 2021, eToro was named Best in Class in the Ease of Use category, including for Beginners, thanks to these design qualities.
eToro Copyportfolio
eToro launched Copyportfolio, their next-generation investment product, in November 2016. You can now invest in two types of portfolios: “Market Copyportfolios,” which package together with a variety of financial instruments based on a specific strategy or theme. Although some of them are just like traditional exchange-traded funds (i.e., investing in tech stocks), others, such as “PanicMode,” are more special in that they combine commodity (silver and gold) purchasing with selling indices.
The “Top Trader Copyportfolio” is made up of the top performers on eToro. This would cater to investors who don’t have the time to perform their own analysis. As an example, instead of creating your own portfolio, you simply choose a portfolio that includes the best-performing traders over the previous quarter.
Cryptocurrency tools
Across 94 supported cryptocurrency pairs, eToro users can find crypto trading ideas and copy other individual crypto traders, as well as copy groups of traders. The eToro Mobile wallet app is available for investors who want to keep the underlying crypto assets. This software, which uses a multi-signature scheme to serve as a custodian, is virtually identical to the brand’s forex mobile app.
Copy-trading structure
On eToro, all traders deal manually. eToro does not allow fully automated trading systems, such as those accepted by MetaTrader. As a result, you can be sure that when you copy another trader on eToro, they are manually placing each trade. This is important to know because many other social trading networks that aggregate trader output allow both discretionary (manual) and automated options, while eToro’s network only allows manual trading.
Research Capabilities
Overall, eToro’s research capabilities are good but not outstanding.
Research Tools on eToro
A regular economic calendar, a report calendar for earnings, news reports, daily market analysis collection, and podcasts are all available. Several of these functions, however, aren’t directly incorporated on eToro.
Fundamental Analysis on eToro
eToro’s platform for stock trading does a great job of integrating fundamental analysis. However, eToro is still trailing industry leaders such as IG and Saxo Bank in this area, as there are limited provisions from eToro’s in-house team in the market analysis section.
User Sentiment Data on eToro
Instead of displaying sentiment from all users, only the top traders at eToro’s trades are used to measure sentiment results (going way above the average other brokers provide with sentiment tools)It is similar to the way CMC Markets displays sentiment data.
Newsfeed on eToro
For each instrument, eToro uses a Twitter-esque wall feed displaying collective commentary. This public feed displays a stream of notifications from other eToro users to give you a sense of what other traders in the eToro network are talking about. The content is generated by eToro users, and the standard can vary. It is unique; however, content produced by in-house workers or third-party experts is, on average, of higher quality.
Education
eToro’s blog contains materials from other categories such as research and business announcements, as well as weekly webinars and a respectable variety of educational content. The one significant disadvantage is navigation; because education is not concentrated in one place, filtering and browsing to find what you want can be difficult. Consider FXCM, Saxo Bank, or IG as examples of educational leaders.
Educational articles on eToro
There are only five articles under a dedicated “Education” link from the main drop-down menu on its cryptocurrency blog, while the main eToro site has video tutorials and a “Trading School.”
Explicit Educational Content on eToro
eToro has gone beyond and beyond the usual explanatory text that appears next to each symbol on its website, alongside an instrument information portion. eToro, for example, offers supplementary details for beginners to learn about symbols like the EUR/USD, such as factors to consider before trading, rather than merely listing the contract requirements.
eToro’s Trading School
eToro’s Trading School includes a handful of very basic videos. On its YouTube channel, the broker has a range of videos, including 7 archived webinars and material about cryptocurrencies and stocks, as well as platform tutorials.
Mobile Trading on eToro
Overall, eToro has done a fantastic job with its mobile platform. eToro retains the look and feel of the web edition on the Android mobile app, including a dark and light theme. Syncing watchlists, for example, helps to maintain the platform experience across devices.
Charting on eToro
The charts, like the rest of the mobile app, are responsive and closely match the web platform, despite the fact that there are only five indicators as opposed to 67 on the web. Drawing tools were absent from the app and would be a welcome addition. Despite the lack of drawing resources, the charts in the mobile app are well-integrated and work well.
Cryptocurrency wallet
The eToro Wallet is a separate app for mobile devices that allows users to deposit and withdraw actual cryptocurrencies owned by eToroX, which serves as their private key custodian and broker. The eToro Wallet has a similar look and feel to the eToro mobile app, including social trading support.
Conclusion
eToro is more than just a social trade copying platform. They want to promote an environment in which traders can exchange ideas, learn from one another, trade and copy each other. You can keep track of the instruments and/or individuals you’re interested in by making WatchLists. Your personalised News Feed contains real-time market info, including comments and trade execution announcements from other people on topics that concern you. And trades can be easily performed from almost any computer.
In contrast to other social trading sites, eToro also provides the most diverse range of instruments for you to exchange. You can exchange stocks, major indices, ETFs, and cryptocurrencies in addition to the normal currencies and commodities. This has the advantage of potentially diversifying your portfolio.
It is up to you to determine how you want to use the eToro trading platform (whether you want to copy others, trade yourself, or do both). But the good news is that since their most recent platform update, eToro makes whichever choice you want to try pretty easy and quick.
