eToro is one of the biggest names currently in the FinTech space. In fact, it’s hard to believe that this giant was founded just recently in 2007. In just one decade, the Israeli-based company has grown to rival some of the age-old brokerage firms. But even then, the company is no stranger to controversies. Let’s take a closer look at the highs and lows of this savvy broker.
eToro Review – About The Company
Established slightly over a decade ago, eToro has grown in leaps and bounds to widen its footprint in Asia, Europe, Africa, and Australia – and generally across the world. If this is your first time hearing about them, you might be wondering whether they are a legitimate brand or not. And well, in our view, the company is trustworthy – that’s keeping in mind the fact that they’re regulated by the FCA in the UK and the Australian Securities and Investment Commission.
However, the company isn’t publicly traded and, therefore, they don’t disclose their annual reports. What’s more? Unlike some firms, this one doesn’t have a bank parent.
Yet another thing that makes this firm different from others is that they primarily focus on CFDs. One benefit of trading CFDs, as opposed to any other market instrument, is that they provide you with the cushion against sharp price fluctuations. And, therefore, CFDs are a perfect go-to asset for anyone who may still want to make profits even as the markets fall.
That said, CFDs have their fair share of risks. For instance, they are susceptible to unexpected changes in market conditions and government policies. Things can change really fast on the market – and even the slightest of all market movements can have a serious effect on one’s returns.
Features That Make eToro A Worthwhile Broker
Even though the company isn’t perfect (we’re yet to come across any “perfect” broker so far), it provides quite a few features that are worth looking forward to. These include (but not limited to) the following:
*Easy Sign Up
The signup process for eToro is one of the easiest we’ve come across so far. Indeed, their platform is highly user-friendly and that’s in addition to being intuitive. In fact, you can simply create a new account with them by simply importing your Google+ or Facebook details.
To help you familiarize with the trading process is a free demo system. You can choose to use this until you’re comfortable trading in the live markets.
Talking about the live markets, the minimum amount of cash you can use to open an account is $2000. Want to open a larger account? Well, you would need to provide more details of yourself including proof of identity and residence.
For proof of identity, you simply need to upload your identity card. On the other hand, for proof of residence, a simple utility bill from one of your service provides would suffice.
Another thing worth noting when signing up with them is that they primarily use USD base accounts. And, therefore, you won’t be able to use any other base currency to trade on this platform.
To understand the payment process, one needs to look at the two dimensions of making payments. The first dimension is that of making a cash deposit. And in this area, eToro excels with its wide range of payment options.
You can deposit your funds either through your credit card, bank wire transfer, and electronic wallets like Skrill and PayPal.
And once you start trading, you’ll probably find yourself needing to withdraw some money. The company doesn’t disappoint on this front either. It enables you to withdraw using any of the four methods i.e. bank wire transfer, credit card, and electronic wallets.
However, we noticed that withdrawals done via electronic wallets were processed much faster than those requested for under different payment methods. Also, the company charges a punitive $25 to process withdrawals. This, in our view, is quite expensive.
The eToro Online Platform – How It Fares
We’d give a 5-star rating to the team behind this company’s web development. Indeed, this platform is not only modern but also easy on the eye and incredibly easy to navigate through. The system is also available in different languages:
So, no matter the language you speak, you can always adjust the system to the language you’re most comfortable with.
On top of that, the overall color scheme of this platform is quite appealing. You also get a clean design combined with great functionality.
For your own security, the company has introduced a 2-step signup process. On top of that, you also get a handy search engine which is also predictive.
On the flipside, though, all the panels are fixed and can’t be customized. The only feature that’s customizable is the watchlist.
*Alerts & Notifications
The only way to keep your fingers on the market pulse if by using a system that sends you prompt alerts and notifications. And eToro does just that. But how exactly does their alerts system work?
Well, it’s rather straightforward. You simply need to create your watchlist and include your favorite assets within it. And once those assets meet the criteria you’ll have specified, a trigger will be activated and a notification sent to you.
And what’s more? The system is built in such a way that it can alert you on the patterns of any asset that you’ve traded. This system works by studying your unique style of trading and studies your preferences to issue you with relevant notifications.
The good thing with having such a system in place is that it eliminates the need for sitting on a computer screen the whole day. And this way, you can go about your other business while still keeping up with the market trends.
In terms of value, this can be a real time-saver. Plus you can even integrate some of the platform’s social alerts so you can get push notifications on-the-go.
*A Look at Their Portfolio & Fee Reports
Apart from keeping up with the latest happenings on the markets, it also makes sense to want to keep up with one’s portfolio performance. Fortunately, eToro provides you with some easy to access portfolio. Best of all, you can even have your assets listed on a pie chart or lined up.
However, the company’s fee reports are a bit difficult to find. You have to follow the portfolio>history>top right circle>account statement so you can download a PDF document containing your unique details. Also, the fees aren’t consolidated but rather lined up per fee deduction.
Although the company is primarily a CFD broker, they also have a market presence in the forex and crypto markets. In fact, the company was one of the biggest beneficiaries of the crypto craze of 2017 and 2018 owing to an influx of investments.
Over time, eToro has been working hard to develop new product features. For instance, they have funky features like CopyFunds and CopyPeople both which are a great option for social traders.
And if you’re looking to make some huge returns from your investments, the company provides you with easy-to-access leverage options. However, it’s worth remembering at all times that leverage is a double-edged sword. In one way, it can help you make some huge bucks without risking much. On the flipside, though, it can easily wipe out all of your cash if the markets swing against your predictions.
This is an extremely important feature that provides you with the opportunity to copy and paste another professional trader’s style. This can be a highly important tool especially for beginner traders who would like to be mentored.
However, you’d need to be careful when choosing any trader to follow. And you can easily do that by reading their portfolio and public information e.g. their monthly and yearly breakdown. On top of that, the company provides you with a risk metric which helps you have an easy time picking a mentor.
The best part is that you can copy trades simultaneously from up to 100 pro traders. The only problem with CopyTrades is that it prevents you from closing a part of your trading position, you’d have to wait for the trade to close at the full amount.
CopyFunds are just that – investment funds. But a closer look at them reveals that they are also CFD portfolios. Under CopyFunds you can choose to either invest in a trader’s portfolio or a theme.
When you choose to invest in themes, you simply elect to invest either in cryptocurrencies or big bank portfolios. And indeed, some of the big banks you’ll find up for grabs over here include the HSBC, Bank of America, Citi, to mention but a few.
And for the cryptocurrency enthusiasts, there’s a CopyFund for that as well. Here you get 14 coin types ranging from:
- Bitcoin Cash
- Etherum Classic
However, for now, the crypto market under eToro is non-leveraged. This might limit just how much potential you can reap from these diverse markets.
Stocks & ETF
This isn’t one of those features that you’d expected to find being offered by most CFD and forex brokers. But eToro does it. In fact, under their portfolio, you’ll find 13 stock market options. These include the NYSE, London, New York Tech, Frankfurt, Paris, Milan, Madrid, Oslo, Zurich, Copenhagen, Stockholm, Hong Kong, and Helsinki.
Their charting tool is good but not great. It provides you with the freedom to experiment with over 70 indicators. What’s more? The charts are saved automatically which means you don’t need to set up your favorite indicators every time you log in to trade. On top of that, you get 14 drawing tools along with built-in zoom in and out functionality on price data.
We’re, however, of the opinion that the drawing tools can be made much more accessible by having them on the upper toolbar of the window. Otherwise, they are a bit difficult to find under the current setup because you have to dig them out from the technical indicators list.
But that issue aside, the charts are quite well-made. You can either choose to watch the markets in line charts or the candlestick charts. What’s more? You get access to different time frames which range from 1-minute to monthly.
The icing on the cake is that you can open multiple charts on your workspace to reveal different time frames even on a single asset. Also, you can compare the performance of different asset combinations.
No matter the style of trading you settle for, it’s important that you keep learning. The trading world is constantly evolving and the tricks that worked yesterday may not always be the best to settle for today. That’s why in all our reviews, we always make sure to talk about the kind of educational materials provided by the service in review.
And in this case, we can confirm that eToro provides a wide variety of training videos, eCourses, and webinars. The material is quite good, especially for beginners. However, it doesn’t dive too deep into the specifics meaning they expect you to do the digging.
A bunch of the courses provided here seem entirely designed to help the user get a quicker acclimation to the platform. And that’s not a good thing in our view. The company needs to focus on investing more in training especially for folks looking for hands-on information on how to become investors.
Unleashing the Power of Social Trading
We can’t get enough of the fact that eToro provides you with one of the most effective systems to tap into the power of crowdsourcing. And with the platform having a presence in more than 140 countries, you can rest assured that their social trading platform is one of the finest available on the markets currently.
And as the company describes it, this is a strategy that makes it possible for anybody to become a leader and a follower. According to the company’s data, since its launch, this service has seen close to 78% of its CopyTrades close in profit (between 2010 and 2017).
- Low trading fees
- Clear and straightforward fee structure
- Their social trading platform is quite superior
- It’s very easy to open an account with them
- Generally awesome trading experience
- They don’t have a minimum account balance
- System outages were reported during the cryptocurrency booms
- They charge a punitive withdrawal fee
- They surcharge an inactivity fee
The depth and flexibility of the tools provided by eToro make it one of the few brokers who seem focused on prioritizing quality over quantity. However, the system has had its fair share of issues in the recent past. But even then, we’re glad to see that the company keeps improving.
Generally, they’re an exciting brokerage firm and provide you with a superb opportunity to build your confidence.
Blake is a self-made online day trader with a knack for adventure. On his free time, he loves reading and learning new thing as well as improving his jiu-jitsu skills. He currently resides in New York City. Learn More >>