eToro Review 2021

Rating: 4,5/5

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What Is eToro?

Originally founded as RetailFX in 2006, eToro is a social trading platform for online trades in stocks, currencies, indices and commodities.

eToro is a fast-growing brokerage firm with over 5 million traders in 140 countries. Unlike the vast majority of brokers, eToro aims to enthuse its clients about the trading process, while educating and preparing them for the challenging and stressful atmosphere of currency trading.


Nervousness and anxiety are familiar to the novice forex trader as the vast majority of new traders have as yet little knowledge, understanding, and experience of the dynamics of this gigantic market.


All the different kinds of analysis, news flow, charts and indicators can be very confusing and daunting for beginners. eToro aims to solve all these problems, with a user-friendly platform and an innovative attitude to trading.

eToro Review Summary

Criteria

Value

Site

Social Media

Date of foundation

2006

Head Office

KIBC Kanika International Business Center 7th Floor, 4 Profiti Ilia Street Germasogeia, Limassol, Cyprus 4046

Types of support

Email: [email protected]
Online contact form
Help Centre

Languages

English, Spanish, Italian, German, Polish, Russian, Chinese

Feature

Total Rating

Ease of Use

5 ⭐⭐⭐⭐⭐

User Interface

5 ⭐⭐⭐⭐⭐

Fees

4,5 ⭐⭐⭐⭐

Security

4,5 ⭐⭐⭐⭐

Support

4,5 ⭐⭐⭐⭐

Payment Options

4,5 ⭐⭐⭐⭐

Registration on eToro

Registration on eToro

To open an eToro account, go to the registration page. Here you can create a new account, or sign in through your Facebook, Apple or Google account. Only those aged 18 or over can work with eToro.

Registration page

To start trading, you must provide your details and verify your account. At the end of the registration, the broker will ask you to upload scans or photos of your supporting documents.

In the application form you will be required to:

  • provide your residential or registration address;
  • fill in the forms of experience of trading and investing on financial markets;
  • indicate education in finance;
  • pass an assessment of your trading knowledge;
  • choose the instruments you wish to invest in;
  • list your trading goals;
  • note your financial situation.

After registering, a client has access to an eToro demo account. There is no need to fill in a profile or go through identity verification. The demo account allows you to trade with virtual money with a starting balance of 100,000 GBP. You can switch between virtual and real account through your personal account.

What sets eToro apart from other platforms?

One of the main differences between eToro and other platforms is the sheer number of investment and trading options available.

With multiple ways to invest and trade, users can use the same platform for their cryptocurrency trading needs as they do for traditional assets.

The social elements of eToro also make it unique. An example is CopyPortfolios, which is a long-term themed investment in the form of a managed portfolio that brings together assets and top traders with a predefined strategy. The ability to copy the investments of successful traders is also innovative, as is the Popular Investor programme.

What trading tools does eToro offer?

This platform aims to educate traders as well as provide them with an investment platform.

Once registered, eToro users receive a 'virtual money account' worth XNUMX $100,000 so that they can work on strategies and skills before investing any real money.

It also provides many other tools to help with real trading, such as an economic calendar. Simply enter the date and time zone you want to look at and the assets you are trading. The calendar will show you how events can affect your assets.

It also provides regular market analysis, which includes detailed information as well as quick overviews, so you can use as much or as little information as you like.

Each asset traded on the platform has its own page where you can view detailed information, news, charts and research.

What is a CFD?

A CFD, or contract for difference, is a type of derivative trading. With CFDs, investors can speculate on whether the fast-growing global financial markets will rise or fall. This can be done using cryptocurrencies as well as indices, stocks, fiat currencies, treasury securities and commodities.

When trading CFDs, it is important to note that you will not buy or sell the underlying asset, in this case cryptocurrency. Instead, you sell or buy a certain amount of units for that instrument based on your prediction as to whether the price will rise or fall.

When the instrument moves in your favour, you receive a number of CFD units that you have already sold or bought. CFDs require caution as losses can exceed deposits.

What is a CFD?

At eToro, CFD trading and cryptocurrency go hand in hand. eToro first entered the cryptocurrency world by offering bitcoin trading via CFD in 2013, making it one of the first players in the cryptocurrency investment world.

CFD trading continues to play a key role on eToro, as many cryptocurrency trades are still CFDs rather than real assets.

What are CopyPortfolios?

What are CopyPortfolios?

CopyPortfolios were added to the eToro platform last year. This feature is available for cryptocurrency trading as well as traditional fiat trades. This creates a single tradable asset that consists of carefully selected assets or traders according to a pre-defined strategy.

The eToro investment committee compiles CopyPortfolios and balances them periodically. Investors can choose from multiple copies of cryptocurrency portfolios.

What is CopyTrading?

What is CopyTrading?

The CopyTrader tool allows you to select trading experts in the industry and emulate them. Using this tool, you can copy up to 100 expert traders, not just one. However, this tool is only available on a regular trading account.

Fortunately, setting up CopyTrader for your account is easy with just a few clicks. Simply select traders to copy, select an amount in your local currency and step back as the eToro system copies expert trades and increases your chances of making a profit.

eToro trading accounts

At eToro, we like to keep things simple, so traders - especially beginners - don't have to make a lot of decisions when registering an account. So: Standard trading account and demo account. To open a standard trading account you are required to deposit only $50 into your account.

eToro Practice Account

By choosing the eToro demo account, traders will be given an initial deposit of £100,000 in virtual currency upon registration. Thus, the platform allows traders to test their trading strategies without any financial risk. It is also an excellent opportunity for potential eToro traders to test out the broker's services and trading platform features, before transferring real funds.

eToro Islamic or Swap-free Trading Accounts

Upon request, traders can open a no-swap or Islamic trading account in the event that the trader wishes to trade in the financial markets and adhere to Shariah principles.

How do I deposit and withdraw money with eToro?

There are several ways to deposit money into your eToro account, so you can choose the one that best suits your needs, keeping in mind that different methods have different minimum deposits.

You can make a deposit using bank transfers, bank transfers, Visa, MasterCard, NETELLER, PayPal, Webmoney UK, Skrill and others.

To withdraw, you must fill out a form and then usually receive your money via PayPal, bank transfer, or your credit or debit card. To withdraw you will need a copy of your signature, a colour copy of your passport and proof of address.

How to buy cryptocurrency with a credit card

eToro customers can also buy cryptocurrencies directly from their eToro wallet using a credit card. The investment platform has a partnership with well-known third-party payment provider Simplex, which allows eToro to integrate Visa and MasterCard payments.

Here's how to buy cryptocurrency with a credit card:

  • Open your eToro Wallet
  • Click on the 'BUY CRYPTO' section of the wallet and select the coin you want and the amount you want to buy
  • Enter your payment details into the Simplex billing form

Upon successful completion of the process, the coins you purchased will be transferred to your eToro wallet.

It is important to note that Simplex may immediately approve or deny your request and request additional documentation or proof of identity. This can be official government documentation or a selfie photo. This service is also subject to the following fees and restrictions.

How to trade on eToro

How to trade on eToro

The eToro platform is a great guide to social trading for beginners and experts alike. Any user can see the direction in which most traders are trading. All market activity, namely what is current and where most traders are heading, is displayed on the interface.

eToro offers a wide range of assets to trade: cryptocurrencies, stock indices, stocks, indices and commodities. The eToro client simply chooses an asset to trade, paying attention to its liquidity, signs a contract and waits for the result. You can make several trades at the same time.

So, let's proceed directly to the trading process. Like any Forex broker, eToro does not buy or sell digital assets, but allows you to trade CFDs - contracts for difference.

How does it work?

Having selected a trading pair, such as BTC/USD, the trader buys the asset if he believes its price will rise. If his prediction is correct and the trade closes at a higher price, the difference between the selling price and the buying price will be his profit. The profit in the transaction will depend on the lot, i.e. the volume traded and the commission.

Selling an asset is done in a similar manner: by selling the asset at a higher price and closing the transaction at a lower price, the trader makes a profit. At the same time, when making a short sale, he is not the owner of the asset.

This approach to trading has at least two advantages:

  • First, a trader can sell a cryptocurrency at a time when its value is falling, even without actually having it in their wallet (similar to buying).
  • Secondly, such forex brokers are of no interest to hackers: they have no internal wallets, as all clients' money is kept in the bank.

Types of orders

Trading on eToro is carried out using market, limit and stop orders.

A pending order (or a limit order) is an order placed to execute a position after the specified price threshold is reached.

The order is filled if the current market rate for an instrument reaches a specified threshold. It can be executed within this value, depending on market conditions and volatility.

A limit order remains open until it is executed or until the trader decides to close it. To open a limit order, select the instrument and open the Trade Options window.

If the market you want to invest in is open at this point, the default option is Open trade and not the Order.

If you want to open a pending order and select the rate at which it will execute, you need to click on Trade → Order.

If the market you want to invest in is closed at that point in time (e.g. over the weekend or after hours), then the default option is to open a market order. A market order implies the execution of the trade at the first rate available after the market opens.

The broker also offers stop-loss and trailing stop-loss trading.

A stop loss is an adjustable order to close a trade when the market rate shifts by a set amount relative to the position. It helps the trader minimise losses if the market moves in the opposite direction to what he expects.

A stop loss can be set to a specific value (rate) or as a sum of money.

The moment the market rate reaches the set value and the trader loses the predetermined amount, the stop-loss is triggered and the position is automatically closed.

When opening a new position on eToro, you can also set a trailing stop loss when editing the stop loss.

A trailing stop loss allows you to place a stop loss order that sets a fixed number of pips added to or subtracted from the market price depending on whether the position is a Sell or Buy position. As long as the market moves in the trader's favorable direction, the stop-loss moves with it, keeping an invariable distance in pips relative to the current market rate.

You can set the trailing stop-loss either at trade opening or at any subsequent time. To do this, click on Stop Loss → TSL checkbox in the Open trade window.

Leverage and margin trading

Like most forex brokers, eToro offers its clients leveraged margin trading facilities.

Leverage refers to the use of capital borrowed from a broker when opening a position (collateral).

Leverage is applied in multiples of the capital invested by the trader (e.g. 2x, 5x or more) and the broker lends that amount to the trader at a fixed rate. Leverage can be applied to both long (buy) and short (sell) positions.

How do I open a leveraged trade on eToro?

  • Once you have selected the asset you wish to trade, press Trade, a new window will open with trade parameters;
  • At the top of the screen, select the tab: Sell (short deal) or Buy (long deal);
  • Specify the amount we wish to invest in the trade and set the leverage ratio (it will vary depending on the specific asset). If trading without leverage, we select 1x leverage;
  • Set stop loss and take profit parameters, as required to reduce risk;
  • Click Place Order and the trade is opened. It will execute as soon as the market opens.

Leveraged transactions are handled in the system as CFD contracts.

The eToro platform offers up to 1:400 leverage. Leverage can be applied when trading stocks, currencies, ETFs, commodities and indices, as well as (under certain conditions) cryptocurrencies.

Each financial instrument offered by the company has its own leverage size:

  • 30:1 for major currency pairs
  • 20:1 for cross rates (such as EUR/NZD), gold and major indices
  • 10:1 for Commodities
  • 5:1 for CFD's on Stocks
  • 2:1 for CFD's on Crypto-currencies

Commissions on eToro

eToro does not charge any deposit fees or other exchange fees other than spreads. As with Forex, the service earns its commissions on the spread.

Spreads can range from 1.5% for Bitcoin (BTC) to 3% on Litecoin (LTC) and 5% on less popular (and liquid) cryptocurrencies such as NEO.

For commodity trades, spreads range from two pips for copper to 45 pips for gold trades.

Transactions in equities and ETFs have a minimum spread of 0.09% for both buy and sell. Such trades left overnight (as well as leveraged or short CFDs) imply an additional daily charge of 6.4% + LIBOR for one month for buy orders and 2.9% + LIBOR for one month for sell orders.

eToro deducts a fixed withdrawal fee. The fee varies depending on the amount of the transfer: £5 for a transfer up to £200, £10 up to £500, £25 over £500. In addition the company will charge a fee for transferring CFD positions overnight/weekend.

An inactivity fee of £5 is charged if there are no trades within 12 months.

eToro mobile app

eToro mobile app

For full functionality, the broker has a mobile app which is supported by iOS and Android operating systems. It combines digital, social and trading capabilities. The mobile app gives users access to a range of tools to track the performance of their portfolio, invest in stocks, indices, commodities, currencies and ETFs.

Regulation of eToro

eToro is overseen by regulators in two different countries: the UK and Cyprus.

  • In the UK, eToro operates under the name eToro (UK) Ltd and is registered with the Financial Conduct Authority (FCA) under FCA registration number 583263. Since both regulators (CySEC and FCA) follow the Markets in Financial Instruments Directive (MiFID), it is clear that eToro broker is MiFID compliant and eligible to operate in the Eurozone.
  • In Cyprus, eToro is supervised by the Cyprus Securities and Exchange Commission (CySEC). eToro is licensed as a Cyprus Investment Firm (CIF) under number 109/10. eToro complies with all of the regulator's very stringent requirements, which include, for example, capitalisation requirements and holding client funds in segregated accounts.

eToro Support

eToro's support desk is available 24 hours a day, 7 days a week. Traders who require assistance can reach the support team by email, fax, or alternatively, they can call the hotline at any of the available numbers. The eToro website is translated into many languages, a fact which traders who do not speak English will surely appreciate.

Advantages and disadvantages of eToro

Advantages

Disadvantages

  • The simplicity of the platform
  • Low leverage trading parameters
  • Easy to use minimum deposit
  • Affiliate Program
  • Demo account
  • Broker reliability
  • Traders in the US can only trade in cryptocurrencies.
  • Taxes have to be calculated and paid by yourself
  • Offers little educational and research material
  • 24-hour customer support on weekdays only
  • Not enough information on the website

Conclusion

Although eToro focuses not only on cryptocurrency trading, it is a useful platform for those who invest in or trade cryptocurrencies.

The additional features of eToro are what give it an edge, such as CopyPortfolios and various charts. The platform is also very intuitive, which will appeal to everyone.

While eToro won't be ideal if you want to trade less popular cryptocurrencies, it's a great option for those who are only interested in the major ones or who want to use the same platform for both fiat and cryptocurrency transactions.

Jack Evans


I became a crypto asset owner in 2014, when the industry was in its infancy. Before that, I was working in the classic US and European stock markets. Since then, I have gained extensive experience in both cryptocurrency investing and day trading. I am happy to share with readers my experience with crypto exchanges, DeFi and NFT instruments.
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