If you are a trader looking for one of the best platforms to carry out your trading, eToro is great for copy social trading and cryptocurrency trading, it is highly recommended for beginner and advanced traders. It is excellent for zero-dollar commissions for US stock trading.
A lot of factors make eToro one of the best trading platforms, and we will review them in this article. This etoro review will help you decided whether the platform is safe and legit for you to trade on. Let’s get into it.
Who Are They?
eToro is a multi-asset brokerage company, known for their copy and social trading. It was founded in 2006 by Ronen Assia, Yoni Assia and David Ring. They offer CFDs, cryptocurrencies, stocks, and ETFs. eToro operates in more than 140 countries and has millions of registered users.
Company headquarters are in Israel, Tel Aviv-Yafo. The company has registered offices in Cyprus, United Kingdom, the United States, and Australia. Since 2018, the company’s value grew from $800 million to $2.5 billion in 2020. eToro is a safe broker, regulated by top-tier authorities.
Below are some features of the platform.
| eToro | |
|---|---|
| Demo account: | Yes |
| Minimum deposit: | $50 – $200 |
| Copy Trading: | Yes |
| Minimum Trade: | $50 – $1000 (less with leverage) |
| Mobile App: | iOS, Android |
| Desktop: | N/A |
| Web Platform: | Proprietary |
| Countries not available: | Canada, Japan, Cuba, Iran, North Korea, Sudan, Syria and Venezuela (full list) |
| Deposit Methods: | Bank Transfer, Maestro, Visa, MasterCard, Diners Club, PayPal, Skrill, Neteller |
| Withdrawals: | 3 – 8 days |
| Islamic Account: | Yes |
| Regulated by: | FCA, CySec, FinCen, ASIC |
| Our Score: | 4.9/5 |
eToro trading platform main appeal is social copy trading. This allows users who don’t want to trade, to copy trades of successful investors. They allow for this sort of engagement between peers by providing a messaging feature, a social media feed, and other similar add-ons that we will explain in further detail. Fully automated trading systems are not permitted at eToro.
The eToro trading platform has facilitated more than 300 million trades. The company is expanding its operations, focusing on entering the Asian markets to provide brokerage services to China and Hong Kong.
Is eToro good for beginners?
eToro is a great choice for beginners. Its trading platform is easy to learn and not overly complex. eToro does an excellent job at balancing useful tools and features in a web platform and mobile trading app that is user-friendly. While being good for beginners doesn’t mean it is easy to make money, it’s easier to use eToro than some of the more sophisticated trading platforms out there.
One challenge beginners may face on eToro is conducting sufficient analysis when deciding which investors to copy, and looking at more than just the absolute returns that a given trader has achieved. For example, you might consider the risk score, the average number of trades placed per week, and average profit, loss, and holding time for a given investor that you are considering copying.
Pros and Cons of eToro
Pros
- U.S. customers have access to Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and XRP.
- The website and mobile app are nearly identical, attractively laid-out, and easy to navigate.
- Traders can see what others on the platform are doing and follow the recommendations of certain members who allow you to copy their trades.
Cons
- There aren’t explicit commissions charged, but trades are executed with specific spreads that vary from coin to coin. Some of these spreads are fairly wide.
- The minimum purchase for any cryptocurrency is $25, which makes it difficult for smaller accounts to spread their balances over more than a small number of coins.
- Though you can follow the transactions of some leading traders, you’ll need to have a higher balance to copy their trades. Most require a minimum of $200 for each copied trade.
Fees
eToro trading costs are on the low-end of the industry. They don’t charge fees for US-listed stocks. CFD fees are low and they are built into the spread.
For stock indexes, the S&P 500 CFD fee is 0.75 while the Europe 50 CFD fee is 3.
Cryptocurrencies have a spread from 0,75% to 5%. You get ownership of the asset, unless trading under ASIC (Australian Securities & Exchange Commission).
Currency pairs are expensive to trade, as the cost of trading EUR USD is 3 pips while many other brokers charge between 0.6 and 1 pip per trade. Traders looking for forex brokers are better off elsewhere. Higher spreads are not great for active or high-volume traders.
Deposit fee
There is no deposit fee with eToro. Most brokers don’t charge a fee for depositing money.
Withdrawal fee
eToro has a $5 withdrawal fee for bank transfers. This is in line with industry standard.
Inactivity Fee
eToro charges $10 per month in inactivity fees. if the user fails to log into the account for 12 months. For overnight rollover fees it depends based on current market conditions.
Account types
There are two types available – traders have a retail or a professional account.
Retail
Retail Traders get access to all the assets and copy or manual trading. Leverage is restricted, but coverage by the investor’s compensation fund and negative balance protection is available.
Professional Clients
For a professional traders have to pass a test to determine their qualification. ESMA investor protection like the Investor Compensation Fund and recourse to the Financial Ombudsman Service is not available. As a professional client you get access to leverage.
Demo
A demo account is available with a balance of $100,000. Traders start virtual trading with virtual funds to get to know the platform. The account comes with real-time prices so it is a great way to practice.
Popular Investor Program
For successful traders they have a program called the popular investor. The Popular Investor Program is great for traders that allow others to copy their strategies and has four levels.
Verification Process
Before you deposit money you will have to go through an ID verification process. It will require proof of identity and proof of residency. The process takes less than a day to be completed when they recieve all the required documents. You’ll have to take a quick survey intended to assess your trading knowledge and experience.
Bottom Line
eToro offers newcomers to cryptocurrency trading an attractive platform that is remarkably easy to use—until you need help. Research offerings are light; you’ll have to do some digging and spawn a lot of new browser tabs, to access the education available.
It’s a very different experience for U.S.-based customers compared to those outside the U.S., who can trade additional asset classes and stocks from 15 countries. The ability to transfer crypto holdings to an external wallet is relatively rare and may appeal to investors who want to use their Bitcoin holdings for uses other than trading.
