Home » eToro
Pros
  • Social/copy trading platform
  • Commission-free stock and ETF trading
  • Wide variety of cryptocurrencies available
Cons
  • Pricier forex trading
  • No real-time customer support
  • USD is the only base currency

eToro is a fintech startup and social trading broker that was founded in 2007. Their focus on social and copy trading earned them over 10 million customers around the world. eToro is considered to be a safe broker as it is regulated by two top tier authorities: the Financial Conduct Authority (FCA) and the Australian Securities and Investment Commission (ASIC).

 

Disclaimer: CFDs are complex financial instruments and come with a high risk of losing money quickly due to leverage. 80.5% of retail investor accounts lose money when trading CFDs with this provider. Therefore, it is recommended that you have a good understanding of how CFDs work before investing your money.

Country of regulation UK, Cyprus, Australia
⚠️ Inactivity fee Yes
🧾 Withdrawal fee $5
💰 Minimum deposit $200
🕖 Account opening time 1 day
💳 Deposit Methods Debit/Credit Card, Wire Transfer, E-Wallet
💱 Base currencies USD
🎮 Demo account Yes
🛍️ Products available Forex, Stocks, CFD, Crypto

Opening an account

The account opening process is quick and completely digital. UK based customers can have their eToro account live in just one day. The first step for new traders is filling in their personal details, such as full name, email address, and phone number. After the account is registered, clients must submit proof of identity by taking a photo of their passport/ID card, and proof of residency by uploading a bank statement or utility bill.

etoro registration form

This platform offers three types of accounts:

  • Demo account;
  • Retail account;
  • Professional account (only experienced traders can apply);

eToro Deposit and Withdrawal

Clients can deposit and withdraw money by using credit/debit cards, bank wire transfers, and e-wallets. Even though eToro doesn’t charge any deposit fees, there is a withdrawal fee of USD 5. Traders withdrawing via bank transfers could be charged an additional payment processing fee. This forex broker has a minimum withdrawal amount of USD 30.

Disclaimer: Trader’s should bear in mind that they can only deposit and withdraw money from sources that are in their name.

Traders from the UK can deposit or withdraw funds by using one of the following options: bank transfer, credit/debit card, PayPal, Skrill, Neteller, China UnionPay, and Klarna/Sofort Banking. The eToro minimum deposit is USD 200, and USD 500 for bank transfers. UK customers should be aware that credit/debit card and e-wallet payments are processed instantly, while a bank transfer can take a few working days to complete.

eToro has one base currency – the US dollar. Therefore, it is recommended for clients to make transfers directly from a USD account. Based on the converted currency, the platform will charge a conversion fee starting from 50 pips.

Example: The cost of converting £10 000 in USD is £50.

Traders should take into consideration that the company will charge them a conversion fee for all non-USD denominated trades.

Trading Platform

After testing the eToro trading platform, we have concluded that it is one of the best web traders for beginners, featuring an intuitive design and great colour scheme. Additionally, the high accuracy internal search function allows users to easily find any instrument, by typing its name.

etoro trading platform

etoro trading platform how to buy

Traders from the UK can swiftly open and monitor transactions, analyse charts and create watchlists. This online broker offers around 70 technical indicators that clients can use in combination with the various chart types available. These tools can help customers make better investment decisions.

On the other hand, eToro does not provide integration with third-party trading software such as MetaTrader 4 (MT4) which offers more customizability and technical analysis possibilities. This lack of compatibility with advanced trading tools might keep away highly skilled traders who need more complex market instruments. On this platform, clients can only trade manually. For security reasons, eToro does not allow automatic trading.

Traders can easily find the portfolio reports in the platform by clicking ‘Portfolio’->’History’ (round clock button). However, the fee report is harder to find and it does not add up the trading fees. Clients can find it by clicking on the gear wheel on the top right corner, and selecting ‘Account Statement’.

etoro making a trade

With just a few clicks, eToro clients can select any trading instruments, use technical analysis to make informed decisions, and complete transactions. The platform offers access to the following order types:

  • Limit
  • Take Profit
  • Stop Loss
  • Trailing Stop Loss
  • Market

Social/Copy trading

The feature that makes eToro unique is the company’s focus on social trading. They are the first platform that made this type of investing popular. Social trading is especially successful among less-experienced traders or people that do not have enough time for analysing the markets.

Basically, with copy trading, one can mimic the investments made by another member on the platform. Before choosing who to follow. eToro helps its clients choose the best option by offering them access to information such as:

  • Monthly/annual performance;
  • Trade history;
  • Performance of investment compared with market charts.

In addition, the risk level of each trader can be easily found in his/her profile overview. This rating allows beginners to get a better understanding of the risks associated with social trading.

etoro social trading

The minimum amount that can be invested in copy trading is USD 200, while the maximum amount is USD 2.000.000. It is worth mentioning that clients willing to exit a social trade have to close the entire position, not just part of it.

Copy Portfolio

A copy portfolio has a similar structure to an investment fund. For example, one can invest in a technology shares portfolio, that includes companies such as Facebook, Amazon, Alphabet and Microsoft. A copy portfolio can also be the result of a mix between various other eToro traders’ portfolios. In many cases, this type of investment is made by using an AI advisor, which is set up by the highly skilled eToro team.

As with social trading, when withdrawing from a copy portfolio the entire position must be closed, not just part of the investment.

etoro copy trading

Investment Products Portfolio

eToro has an industry-leading number of cryptocurrencies, a strong portfolio of over 2000 CFDs, and around 50 currency pairs. This forex broker is not taking a commission for stock or ETF trades. Instead, the platform takes its cut from the spread (the difference between the Bid/Ask price), and from the overnight fee it charges for leverage transactions.

Trading discounts in the form of spread rebates are available for eligible clients among other benefits, such as a dedicated account manager, private signals and exclusive assets.

Eligible clients will receive additional benefits, such as:

  • Dedicated account manager;
  • Spread rebates
  • Private signals
  • Access to exclusive assets

Clients cannot change the existing leverage limits unless they have a professional account. Those that qualify for this account type will receive a significant increase of the margin levels. Professional traders can reach limits up to over 10x higher than the standard ones, maxing from 30:1 to 400:1.

eToro stands out from its competitors, by offering traders from the UK access to 17 markets: Euronext Amsterdam, NYSE, Nasdaq, Euronext Brussels, Euronext Lisbon, Frankfurt, London, Euronext Paris, Madrid, Milan, Zurich, Oslo, Nasdaq Stockholm, Nasdaq Copenhagen, Nasdaq Helsinki, Hong Kong, Saudi Arabia.

However, there are more renowned brokers, such as Saxo Bank, that have more markets available. It is worth mentioning that customers will only have access to the most popular companies traded on the provided stock exchanges. eToro constantly updates their number of listed companies, adding more variety for the traders.

eToro customers should know that when they trade without leverage, they will buy the actual asset, not the CFD. The strength of this forex broker is that it features the largest selection of cryptocurrencies on the market.

eToro Fees and Commissions

Compared to other players on the market, eToro provides competitive spreads for their financial products.

etoro fees

Trading Fees

Trading fees are costs that are related to the trading activity. They take the shape of spreads, finance rates, commissions, or conversion fees. eToro has commission-free trading for stocks and ETFs, while forex fees are slightly higher than competitors.

As there are no commissions for the previously mentioned products, the broker compensation is made from the spread between the Bid/Ask price, which is tight, and the overnight fee for leverage transactions.

Spreads for all the financial instruments can easily be accessed by traders, directly from their account. All they have to do is:

  1. Log into their account;
  2. Click on the ‘Help’ button on the left side of the page;
  3. Click on the ‘Our Fees’ button on the top left;
  4. Choose the financial product of interest and view the fees for each: Stocks & ETF, Crypto, CFDs, and Other Fees

Traders holding an overnight position for a certain time will incur an overnight funding fee customers can see it evidenced just under the ‘Open Trade’ button on the eToro trading platform.

In line with the regulatory framework, the eToro maximum leverage is set to 30:1. Margin limits can vary from one instrument to another. For example, the leverage can be as low as 0 – will be limited to a maximum of 50% per trade.

This broker offers traders the possibility to hold cryptocurrencies in their native wallet, eToroX, while other platforms only allow clients to purchase crypto CFDs.

Cryptocurrencies are exchanged to fiat via a third-party provider called Simplex, which charges a 4% fee on top of the 1% charged by eToroX. Exchanging from a cryptocurrency to another has a 0.1% fee. Additionally, traders should know that the minimum transaction with cryptos starts at USD 125 and can go as high as USD 10.000.

Non-Trading Fees

Non-trading fees are costs that are not related directly to the trading activity, such as withdrawal and inactivity fees. eToro has average non-trading fees, with USD 5 for withdrawal, and USD 10/month after one year of inactivity. Though, the inactivity fee can be avoided by just logging in to your account once in a while.

Licensing and Security

eToro is a safe broker, as it is regulated and compliant with top-tier financial regulators around the world:

  • UK Financial Conduct Authority (FCA)
  • Cyprus Securities and Exchange Commission (CySEC)
  • Australian Securities and Investment Commission (ASIC)
  • European Securities and Markets Authority (ESMA)

Due to the strong regulatory framework, investors are protected against the insolvency of the brokerage firm. Customers from the UK can be compensated with up to GBP 85.000 by the Financial Services Compensation Scheme (FSCS). EU clients can expect to receive a maximum of EUR 20.000 from the Cypriot Investors Compensation Fund.

Moreover, retail traders from the European Union benefit from a negative balance protection scheme for forex spot and CFD trading.

Professional clients receive negative balance protection from eToro as a free incentive in certain circumstances. Non-EU traders should keep in mind that they won’t receive any negative balance protection. In addition, there is no investor protection for cryptocurrency trading.

Even though it was founded in 2007 and successfully navigated through the financial crisis of 2008-09, this brokerage firm is still considered to be a fintech start-up. The company is privately owned by large venture capital investors from Germany, Israel and China. Since it is still a private company, it does not have the obligation to release annual reports or publish its financial statements.

Research Tools

eToro offers great research tools for newcomers in the financial and trading area. The platform offers basic financial indicators, such as P/E, dividend yield, beta, and EPS. In addition, clients have access to high-quality charts, with over 70 technical indicators available. A particularly useful feature is that charts save automatically, so users won’t have to create them again when needed.

Beginner traders will find the recommendations option offered for the most well-known assets extremely useful. This can help them make a better investment decision by seeing analyst consensus (sell/hold/buy) on that financial instrument. However, this option is only available for top tier stocks, such as Apple or Facebook.

etoro chart view

Educational Resources

Educational resources offered by eToro are in line with other top-tier forex trading platforms, such as Plus500. The demo account is one of the best ways to practice before starting to trade with real money. In addition, there are basic educational videos, webinars, and an intro guide on how to use the platform available for newcomers. All of the previously mentioned learning materials can be found in eToro’s Trading Academy section.

Customer Support

As most trading companies nowadays, eToro customer support uses live chat and a web-based ticketing system for solving client issues. The support team is fast, skilled and can efficiently help with any requests, no matter the circumstances. It is good to know that customer service is not available during the weekend, and the live chat function is tricky to access. In addition, the strong traders’ community and the comprehensive list of FAQs enhance the problem-solving capabilities of the support team.

Our Recommendation

eToro is a great choice for beginner traders and people that do not have enough time for analysing financial instruments. This forex broker has the best social and copy trading systems available on the market. However, it lacks advanced market analysis software integration with third-party tools such as MetaTrader 4. The platform only has one base currency, which could be a disadvantage for highly skilled traders or people that want to invest in non-USD denominated assets.

Disclaimer: eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note 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 this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Cryptocurrencies are a highly volatile unregulated investment product. No EU investor protection. 

Past performance does not guarantee future results. Trading history presented is less than 5 years and may not suffice as basis for investment decision.

The information above is not investment advice.

eToro Details

Licences:
Currencies:
4.0 rating
Forex Trading Hub
Trading CFDs on leverage involves significant risk of loss to your capital. © Copyright 2020 Forex Trading Hub