eToro Review

etoro

Pros

  • Free stock and ETF trading
  • Seamless account opening
  • Social trading

Cons

  • $5 withdrawal fee
  • Only USD as base currency
  • Customer support should be improved

Table of Contents

Why choose eToro

eToro is a great option for newcomers due to its easy-to-use application and competitive fees. I’ve discovered that it’s particularly well-suited for investing in stocks and ETFs. What distinguishes eToro is its outstanding copy-trading functionality, surpassing similar services offered by other brokers. Nevertheless, for those engaged in short-term trading, it might not be the most suitable choice due to less competitive CFD fees.

eToro pros

  • eToro, established in 2007, operates under regulation in three Tier-1 jurisdictions and one Tier-4 jurisdiction, earning a Trust Score rating of Highly Trusted.
  • Renowned for its social copy trading and cryptocurrency trading capabilities, eToro stood out as our top choice in both categories for our 2024 Annual Awards.
  • Its user-friendly web platform and mobile app make it exceptionally easy to use, catering to both casual and beginner investors.
  • As a multi-asset broker, eToro boasts an extensive range of markets with over 3,000 symbols available, continually expanding its offerings.
  • Clients in the EU, U.K., and Australia benefit from indemnity insurance of up to EUR 1 million per client.
  • With the recent SEC approval, eToro now offers spot Bitcoin ETFs, enhancing its cryptocurrency investment options.
  • Club members and popular investors reaching higher tier status enjoy VIP-style perks.
  • Furthermore, eToro has augmented its research content, presenting the Digest & Invest series, Market Bites podcast, and a variety of weekly videos and articles to enrich the investing experience.

eToro Cons

  • Trading forex and CFDs at eToro is slightly pricier than most of its competitors, despite recently cutting spreads and introducing zero-dollar commissions for U.S. stock trading.
  • Automated (algorithmic) trading strategies are not supported at eToro.
  • Mandatory stop-loss and take-profit may hinder certain trading strategies.
  • Trading Central research and tools are only available to certain eToro Club members who have reached higher Club tiers.

Is eToro safe?

eToro holds a high level of trustworthiness, reflected in its impressive Trust Score of 90 out of 99. It’s worth noting that eToro is not publicly traded and does not function as a bank. Authorized by three Tier-1 regulators, including the Australian Securities & Investment Commission (ASIC), Financial Conduct Authority (FCA), and regulated in the European Union through the MiFID passporting system, eToro demonstrates its commitment to compliance and regulatory standards. To delve deeper into the Trust Score or to explore the regulatory jurisdictions of various eToro entities, you can access further information on their website.

Offering of investments in eToro

eToro provides a wide range of 3,479 tradeable symbols, offering diverse investment opportunities for its clients. Below is a summary table showcasing the various investment products accessible through eToro.

Usability: Functioning as a multi-asset broker, eToro prioritizes user experience by offering seamless navigation for traders. For instance, traders can conveniently choose between trading CFDs and accessing the underlying assets directly from the trade-ticket window—an intuitive feature that enhances usability.

Cryptocurrency: eToro facilitates cryptocurrency trading through CFDs as well as trading the underlying assets, such as purchasing Bitcoin. Moreover, eToro now includes the recently-approved spot Bitcoin ETFs among its offerings. Recognized as the top broker for Crypto Trading in our 2024 Annual Awards, eToro boasts an extensive selection of crypto assets—both CFDs and underlying assets.

Please note: Retail traders from any broker’s U.K. entity and residents of the U.K. or the Netherlands do not have access to Crypto CFDs. Additionally, cryptocurrency trading at eToro is unavailable in Russia.

Commissions and fees in Etoro

eToro operates as a market-maker broker and typically displays a variable spread of 1 pip on the EUR/USD pair, slightly above the industry average. While retail traders may not opt for eToro due to its spreads, they are attracted to its social copy trading platform capabilities.

VIP accounts: eToro provides a VIP club known as eToro Club, comprising five membership tiers from Silver to Diamond. These tiers cater to traders maintaining balances ranging from $5,000 to $250,000, offering various benefits depending on the membership level. VIP perks encompass access to Trading Central, discounted withdrawal and deposit fees, and a dedicated account manager, among other VIP-style privileges.

Popular Investor program: eToro’s Popular Investor program, designed for traders who allow others to copy their strategy, consists of four levels—Cadet to Elite—offering different perks. To qualify for the Cadet tier, traders must maintain an account equity of over $1,000, attract $500 in customer assets following their strategy, and maintain a risk score below 7 for at least two months. Perks for Popular Investors include spread rebates, monthly payments, and a management fee for those reaching elite status.

Cryptocurrency trading: eToro’s pricing for trading physical cryptocurrency aligns closely with the industry average. Users incur a fixed fee of 1% for each buy and sell position, in addition to the spread, when opening and closing positions. While the cost of trading bitcoin has increased compared to its previous rate of 0.75%, eToro has introduced a flat rate commission of 1% for nearly 200 crypto assets, leveling the playing field, especially for trading emerging cryptocurrencies. Moreover, crypto-to-crypto conversions on eToro incur a fee of only 0.1% alongside prevailing spreads.

Exchange-Traded Securities: In addition to CFD share trading, eToro offers zero-dollar commission for U.S. stock trading (excluding U.S. investors) and supports fractional shares. For more details, refer to our review of eToro on UK.StockBrokers.com.

Mobile trading apps

eToro provides a seamless mobile experience, offering high ease of use with nearly identical features across both its web platform and mobile app, catering to clients who use multiple devices.

App Overview: eToro offers two mobile apps—the eToro app and eToro Money for crypto and money transfers—available on Google Play for Android and the Apple App Store for iOS devices.

Ease of Use: Testing on Android revealed that the eToro mobile app mirrors the web version’s appearance and functionality, including useful features like dark and light mode themes and synced watchlists, ensuring a consistent platform experience across devices.

Charting: While the mobile app’s charts are responsive and closely resemble those on the web platform, they offer only five indicators compared to 67 on the web. Drawing tools are absent from the app but would be a valuable addition to its otherwise well-designed and integrated interface.

Cryptocurrency Wallet: eToro’s cryptocurrency wallet, known as eToro Money, is a separate mobile app allowing users to deposit and withdraw money and cryptocurrencies. The eToro Money Wallet closely resembles the eToro mobile app and supports social trading.

Note: While eToro offers crypto trading services on its platform, eToroX, the brand’s crypto exchange, is no longer accessible to retail clients.

Other trading platforms

eToro distinguishes itself through its innovative integration of self-directed trading and copy trading, creating a cohesive trading experience that resonates with users. This unique approach has proven to be highly effective, as evidenced by our recognition of eToro in our Best FX Brokers for Copy Trading category.

Platforms Overview: The eToro web platform prioritizes ease of use and simplicity, making basic operations seamless and intuitive for traders. Users have access to essential functions such as creating watchlists and easily adding instruments by searching available markets. These user-friendly design features contributed to eToro’s top ranking in the Ease of Use and Beginners categories for our 2024 Annual Awards.

Charting: eToro’s charting capabilities shine when utilizing its ProCharts setting, offering a comprehensive range of 66 indicators, 13 drawing tools, and the ability to save and choose from predefined layouts.

Trading Tools: eToro’s CopyPortfolios feature is another innovative tool, allowing traders to group into single funds for copy trading. This feature caters to both passive investors and self-directed traders, offering a versatile option for portfolio diversification.

Cryptocurrency Tools: With support for 108 cryptocurrency pairs, eToro users can explore crypto-trading ideas and copy other traders or groups. For investors looking to withdraw underlying crypto assets, the eToro Mobile wallet app serves as a custodian, employing a multi-signature scheme for security.

Copy Trading Structure: Unlike platforms that support fully automated trading systems, eToro prohibits algorithmic trading, ensuring that trades are executed manually by copied traders. This transparency provides users with confidence in the trading strategies they choose to follow, distinguishing eToro from other social trading platforms.

Market research

eToro’s research offerings remain competitive and have seen consistent improvement over time. The introduction of weekly video updates featuring market analysis, coupled with research articles from in-house analysts, has notably enhanced eToro’s research suite, positioning it in closer competition with top brokers in terms of market research.

Research Overview: eToro provides various research tools, including an economic calendar, earnings reports calendar, news headlines, daily market analysis series, and podcasts. However, some of these features are not directly integrated into the eToro platform. While Trading Central is accessible, it’s reserved for select eToro club members who have achieved specific tier status. Additionally, research reports for stocks are available to funded account holders.

Market News and Analysis: eToro excels in incorporating fundamental analysis into its platform for shares trading and daily blog articles. However, the absence of technical analysis puts eToro slightly behind leading brokers like IG and Saxo Bank. Enhancing technical analysis features would strengthen eToro’s Analyst Weekly series. Notably, eToro has made significant strides in this area with the introduction of eToro Plus, Digest & Invest, Trader Talks, and its Weekly Crypto Roundup series.

Sentiment Data: eToro calculates sentiment data using trades from top traders, rather than aggregating data from all users. This approach sets it apart from typical sentiment tools provided by brokers and aligns with how platforms like CMC Markets display sentiment data.

Wall Newsfeed: eToro’s wall newsfeed presents collective commentary similar to a Twitter-style feed for each instrument. While this public feed offers insight into the sentiments of other eToro users, the quality of content may vary. While unique, content generated by in-house staff or third-party professionals is generally perceived to be of higher quality.

eToro Digest and Invest Podcast: Additionally, eToro offers a digest and invest podcast, further enriching its research offerings.

 
 

Education

While eToro’s Learning Academy and blog offer a respectable assortment of videos, articles, and weekly webinars, their quality and quantity fall short of industry leaders such as AvaTrade, Saxo Bank, or IG. Nevertheless, eToro has made notable strides in this domain, bolstered by the introduction of new courses and content on the eToro Academy, culminating in eToro receiving recognition for Best in Class Education in our 2024 Annual Awards.

The eToro Learning Center comprises an online trading academy featuring numerous videos and articles meticulously categorized according to topic and proficiency level.

In addition, eToro supplements its platform with informative details tailored for beginners alongside each symbol, offering insights into trading instruments like the EUR/USD currency pair and essential considerations before venturing into investments.

Despite these advancements, there remains room for enhancement. While eToro’s YouTube channel hosts a commendable array of videos, including archived webinars and market analyses, distinguishing between research, promotional, and educational content can prove challenging. To address this, organizing educational material via playlists and clearly delineating platform tutorials from financial market education could enhance the overall balance of eToro’s video content in this realm.

Final thoughts

eToro caters well to retail traders seeking to harness the collective wisdom of the crowd through copy trading, as well as to seasoned active traders keen on incentivizing their trading ideas by sharing them with peers.

Novice traders who prefer a supportive environment may appreciate the user-friendly platform as an added advantage. However, I would not recommend eToro for active or high-volume traders due to higher spreads and limited maximum trade sizes, unless they aim to have their strategies copied by other investors. Notably, eToro does not support algorithmic trading.

eToro stands out as an outstanding option for social copy trading and cryptocurrency trading, securing the top spot in both categories in our 2024 Annual Awards. Moreover, eToro clinched the 2024 Industry Award for the best Trader Community, reaffirming its position as a leader in fostering a collaborative trading environment.

Is eToro trustworthy?

With a global trust of over 30 million traders, eToro is licensed to oversee client funds and offer brokerage services across multiple nations. Established in 2007, eToro operates under regulations in two tier-1 jurisdictions and one tier-2 jurisdiction, positioning it as a secure broker for forex and CFD trading.

Trust in financial services hinges on several factors, including regulatory compliance, operational longevity, sufficient financial resources to guarantee stability, and a history of exceptional customer support. Across these aspects, eToro has demonstrated its ability to instill confidence and earn the trust of its clients.

Is eToro really free?

eToro’s copy-trading service expenses are integrated into its spreads. Thus, although eToro might appear commission-free, trading costs, such as bid/ask spreads, are still applicable.

Online brokers generate revenue through commissions, spreads, or a blend of both, often receiving rebates and similar incentives. Apart from spreads, clients typically don’t incur any additional charges, except for carry costs if they opt to maintain positions overnight.

Can you make money with eToro?

Yes, it’s possible to earn money with eToro, although like any brokerage platform, success is not guaranteed. eToro’s appeal lies in its social copy trading features, enabling users to choose from a wide array of traders and replicate their trades in real time. However, it’s essential to acknowledge the potential for losses inherent in trading forex, stocks, and CFDs, including on eToro.

To profit on eToro, whether through manual trading or copy trading, it’s crucial to make sound trading decisions and employ effective risk management strategies. This involves minimizing losses relative to profits over time.

Even with copy trading on eToro, users need to conduct sufficient analysis to evaluate potential traders to copy from the platform’s database. Additionally, decisions must be made regarding allocation of funds to each strategy provider, setting maximum draw-down limits, and choosing whether to copy existing trades or only new ones.

Is eToro good for beginners?

Indeed, eToro is an excellent option for beginners. Its trading platform is designed to be intuitive and straightforward, making it easy for newcomers to learn the ropes without feeling overwhelmed. eToro strikes a good balance by offering a range of useful tools and features on both its web platform and mobile app, ensuring accessibility for users across different devices.

While eToro’s beginner-friendly nature doesn’t guarantee instant success, it does simplify the trading process compared to more complex platforms. However, beginners may encounter challenges, such as the need to conduct thorough analysis when selecting investors to copy. It’s important to consider factors beyond just the returns achieved by a trader, such as their risk score, trading frequency, and average performance metrics like profit, loss, and holding time. Taking these factors into account can help beginners make more informed decisions when copying investors on eToro.

What type of broker is eToro?

eToro has the flexibility to function as either a market-maker or an agency broker, depending on various factors including the specific eToro entity holding your account. Market-maker brokers typically serve as the counterparty to your trades, while agency brokers route your orders to other market-makers in exchange for various benefits such as rebates, profit-sharing arrangements, and potentially wider spreads and commissions.

For instance, both eToro U.K. and eToro Europe have the capacity to operate as market-makers, but they also have the capability to hedge their clients’ trades and function as matched-principal brokers (agency brokers) if necessary, as part of their internal risk management processes. The key consideration is that brokers must adhere to regulations governing best execution practices, and eToro is obligated to comply with such regulations wherever mandated by law.

About eToro

eToro, an early innovator in social copy trading, was established in Israel back in 2007 with a focus on developing financial trading technology. Since its inception, the company has experienced significant growth, evolving from its initial product launch to now serving more than 32 million registered users worldwide. eToro has distinguished itself as one of the largest social networks in the financial sphere, catering to clients across over 140 countries. With $7.5 billion in assets under administration, eToro has become a prominent player in the online trading industry.

One notable aspect of eToro’s development is its commitment to innovation. The platform continually evolves to offer cutting-edge features and services to its user base. For example, eToro has integrated ESG (Environmental, Social, and Governance) scores for over 2,700 tradable stocks, reflecting its dedication to socially responsible investing practices. Additionally, the broker has forged a partnership with Twitter, enabling the use of $Cashtags, a feature that enhances the accessibility and functionality of the platform.

To learn more about eToro, you can visit their webpage. 

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