eToro Review 2020

 

eToro is a leading fintech startup, popularly known as an Israeli social trading broker. Established in 2007, eToro is a multi-asset platform that offers CFDs, stocks, and crypto-assets. It is regulated/authorized by multiple regulatory bodies across the world like Cyprus Securities and Exchange Commission (CySEC), Financial Conduct Authority (FCA) in the United Kingdom, Australian Securities and Investments Commission (ASIC) and FinCEN.

Background

  • Established and located in Cyprus, eToro focusses on social and copy trading which has brought in rapid development for the company. Currently, eToro has over 295,000,000 customers around the world.
  • eToro is privately owned, promoted partly by investments, like the VC of Commerzbank, Commerz Ventures Gmbh, and there are also the US, Chinese and Israeli investors among the owners. eToro is lead by the well-known founder and CEO of eToro, Yoni Assia.
  • eToro does not publish any financial statements to the public; hence it is difficult to investigate its financials.

Features

  • Customers can execute copy trading with ease.
  • Copy-trading permits retail account holders to imitate the trades and trading techniques of the best customers, automatically and continuously. Although other brokers have a similar capacity, none have incorporated it with social media communication just as eToro has.
  • The eToro platform is well-customized for those who know the fundamentals of forex and digital currency trading.
  • Customers can utilize a chat and ticket system to fix trading issues, make inquiries on accounts, and solve different problems. Adequate help on the FAQ database is there for the traders.
  • Opening an account on eToro requires 200 dollars (50 dollars for Australia and the U.S).

 

MetaTrader 4 not Supported

The absence of advanced technology may be a more serious issue for more advanced merchants. eToro does not allow clients to attach third-party algorithms or software, like MetaTrader 4 Expert Advisors, into the information feed since they offer no VPS hosting or API interface. Equipped with wide spreads, a small product list and the absence of customization could send highly skilled customers to other brokers.

Account types

eToro offers a simple account type, just one live account. New users can try the platform via a demo account by using virtual cash.

Login

eToro has an optional two-step login framework which makes onboarding a very easy and quick process.

Deposit and Withdrawal

eToro offers multiple options to deposit funds which include, credit cards. Nevertheless, there is a withdrawal charge.

Web Trading Platform

eToro’s web trading platform is simple, user-friendly and adorned with the latest designs. It is accessible in English, Spanish, German, Italian, Russian, French, Greek, Polish, Arabic and Chinese.

 

Security

eToro’s security features comprise of phone-based two-level verification and standard SSL encryption. Disclosure on fees is easy to read and extensive, which increases transparency.

Desktop Experience

  • The social trading platform, Openbook of eToro is web-based and easy to use. Novices, as well as more experienced traders, can work in it without much effort, even though the platform has only one version.

 

  • Charting is full-featured with over 60 indicators and several drawing tools. The charting platform does not have the back-test functionality, even though the platform has performance information from CopyPortfolios and CopyTraders.
  • The news feed opens into a social forum with customer posts, yet it is not very informative and updated. Moreover, watchlists can be altered and saved while the order entry needs risk management capacity. The broker offers no MetaTrader or third-party options.

Mobile Experience

  • The Mobile platform has similar functionality as the web trading platform. It executes mobile explicit intuitive functions like good touch interactions or push notifications.
  • Further, eToro mobile versions for android and iOS permit simple syncing between platforms with efficient menus. The indicator menu has been limited to five basic kinds, while the order entry is similar to the web version.
  • Watchlist incorporates no customer positioning information, in contrast to the web version, denoting a weird omission in eToro’s business focus. Clients can set custom price alerts while receiving push notifications about market affairs and account problems.

 

Special Features

eToro is not much focused on its strengths like social and copy trading, in-platform social assessment information, automated client and portfolio copy trading. They give negative balance protection to high profile customers as an incentive, since it is not required under ESMA rules. Further, the absence of a volume discount program shields the platform from being less expensive. However, the organization offers an eToro Club program that offers some discounts and additional services as per the account size.

eToro Wallet

  • eToro has introduced its blockchain wallet for both iOS and Android, which will presently be accessible in 31 U.S. states. The platform presents different diverse cryptocurrencies in the U.S. and other countries.
  • The eToro Wallet uses a different mobile application where clients can deposit and withdraw real cryptocurrencies that are owned by eToroX, which acts as the caretaker of their private keys and broker.
  • eToro allows its U.S. customers to access cryptocurrencies only. Those outside the U.S. can trade in CFDs, forex, stocks, and digital currencies.

Investment Products

This broker’s product catalog is small, with 47 currency pairs, and 19 commodity/index CFDs. It also covers over 1,500 shares and 77 cryptocurrency CFDs. All instruments can be exchanged on the long or short side, yet clients are advised to read through the fine print before investing.

Commissions and Fees

  • eToro offers a competitive spread per side for the shares, and now also allows commission-free stock trading. However, weekday overnight holding cost is 24 cents for every 1,000 dollars of leveraged long exposure. This expense significantly triples by the weekend and no overnight fee is charged for non-leverage long exposure.
  • Minimum withdrawal amount is $50.
  • eToro allows traders to open a free stock investing account with 0% commission — no markup, no ticket fee, no management fee.
  • eToro levies inactivity fees of $10 per month after 12 months of no trading activity.
  • eToro offers a VIP club membership with five levels running from gold to diamond for traders who keep up balances between 5k – 250k dollars. Based on the level, benefits differ from a dedicated account manager to discounted deposits and withdrawal fees, access to private signals, and other exclusive assets which are among other VIP account benefits.
  • Besides, eToro’s Popular Investor program has four levels, ranging from cadet to elite where the traders are eligible to get different advantages starting from spread refunds to a monthly payment and a management fee for individuals who arrive at elite status.

 

Fees for Cryptocurrency trading

The expense for trading crypto to fiat at eToroX is 5 percent which is based on eToroX charge of 1 percent in addition to a 4 percent Simplex charge. When changing over from crypto to crypto is just 0.1 percent with a minimum trade size of 20 dollars and a limit of 10,000 dollars per transaction. Regarding crypto trading costs, spreads at eToro go from 0.75 percent on Bitcoin (BTC) to as much as 4.5percent on crypto-assets like Miota (IOTA).

 

Additional Charges

This broker charges 25 dollars in addition to bank or credit card charges for withdrawals, which is one of the highest charges among European brokers. Furthermore, no withdrawals of less than 50 dollars are allowed. Long (BUY), non-leveraged crypto, stock and ETF positions are not executed as CFDs and do not charge any fees. eToro does charge overnight/weekend fees for CFD positions, such as leveraged positions and short (SELL) orders.

 

Cryptocurrency tools

Additionally, eToro offers trading over various cryptocurrency CFD sets, clients can discover crypto trading ideas and copy other individual crypto traders, and also can copy groups of trades. For investors hoping to trade crypto assets, eToroX offers the eToro Mobile wallet application that acts as overseer utilizing a multi-signature which almost matches the brand’s forex mobile application.

 

Manual Trading

eToro offers its traders to trade manually. Completely automated trading frameworks are not allowed, which implies the trader who copy the trade from another trader, can be certain that they are setting each trading manually. This is important to know the other social trading platforms generally grant both discretionary (manual) trades and automated methodologies, while eToro’s system comprises exclusively of manual trading.

 

Non-trading fees

eToro’s non-trading charges are high. Suffice to say, inactivity charge exists with this broker. Besides, there are no deposit, account and custody fees. eToro withdrawal charges and currency conversion charges are very costly. eToro charges a conversion charge when the trader withdraws or deposits cash from his account in currency apart from USD.

Copy Trades

CopyTrades is the most important social trading feature. Moreover, an eToro risk metric is likewise given. There are huge amounts of statistics, like trades every week, normal holding time, performance on charts, news feed comments and profile description. eToro allows its users to connect with millions of investors on its platform.

eToro allows users to copy the best traders on its trading network, quickly and simply. Creating and managing a Copy Trading portfolio in eToro is a simple and transparent process.

 

eToro outlines a few important points to consider before copying:

  • The minimum amount to invest in a trader is $200.
  • The maximum amount of traders you can copy simultaneously is 100.
  • The maximum amount you can invest in one trader is $2,000,000.
  • The minimum amount for a copied trade is $1; trades below this amount will not be opened.
  • If you close a copied trade manually, the funds from this position will be credited back to your copy balance (the amount allocated to copy that person that is not invested in open positions).

CopyPortfolios

One inventive instrument product offered by eToro is CopyPortfolios. CopyPortfolios help investors to minimize long-term risk, trigger growth opportunities, and create a wide array of investments.

eToro allows traders to invest in two kinds of Copyportfolios: Top Trader Portfolio and Market Portfolios.

Once a trader invests in a CopyPortfolio, his capital is managed by the experts at eToro who help the trader earn maximum benefits.

 

Drawbacks of eToro

  • eToro process of withdrawal of funds is done through similar methods utilized for making the initial deposits like e-wallets, wire transfers, and credit cards. Moreover, they take a day to process and charged $25.
  • eToro does not utilize the MetaTrader trading platform. Rather, eToro uses a proprietary platform.
  • eToro’s trading platform freezes now and again. Additionally, educational tools are restricted.
  • Moreover, there is no live chat or phone support; only a web-based ticketing framework. Client queries are answered through the mail. This becomes a big hurdle when clients need help immediately.
  • eToro levies inactivity fees of $10 per month after 12 months of no trading activity. eToro’s annual financing rates are high compared with different brokers.
  • When traders need instant help to sort out a trade, the eToro platform does not provide any solution. This is an important reason for driving client complaints.
  • eToro does not offer guaranteed stop-loss or extra coverage through private insurers, while an insufficient order request section interface does not have risk management features apart from stops and trailing stops.
  • Because of the MiFID guidelines, eToro does not provide its customers with any sort of incentives or bonuses.

Wrap up

More experienced traders and professionals looking to allocate funds to alternative copy based procedures are bound to comprehend the dangers and make a cautious move when required. The client support process of eToro needs to be improved. Additionally, it has a tight product range which incorporates stocks and CFDs. Also, non-trading expenses are high. To summarize, we can use eToro for social trading and stock trading. Retail and professional clients looking for a more extensive scope of brokerage services, good client support, and the competitive process can explore other alternatives.

eToro

8.8

PAYMENT OPTIONS

9.0/10

USER EXPERIENCE

8.9/10

REPUTATION

7.0/10

SUPPORT

9.3/10

SECURITY

9.7/10

Pros

  • Customers can execute copy trading with ease.
  • Adequate help on the FAQ database is there for the traders.
  • Opening an account on eToro requires 200 dollars
  • Customers can utilize a chat and ticket system to fix trading issues

Cons

  • eToro does not utilize the MetaTrader trading platform.
  • eToro’s trading platform freezes now and again
  • eToro does not provide its customers with any sort of incentives or bonuses.
  • eToro’s annual financing rates are high compared with different brokers.