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eToro Review 2020 – READ This Before You Sign Up

Learn everything about eToro and how it works.
thadues
Author: thadues
Last Updated: May 14, 2020
 4.5/5

Learning how to trade securities can be a daunting task but eToro is here to simplify the process. The platform’s main selling point is that it allows you to copy expert traders during the learning phase and make a profit in the process. eToro Review - READ...

In addition to copy trading, the platform also offers Stocks, Forex Trading, and CFDs.

In this guide, we demystify – eToro a company that has captured the hearts of many in the trading space. We aim to paint a complete picture of the online trading platform to help you make an informed decision.

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    Trade with eToro - 0% Commission

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    • Trade Stocks, Forex, Crypto and more
    • 0% Commission on Trades
    • Copy Trades of Pro Investors
    • Easy to Use Trading Platform
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    Disclaimer eToro: 75% of investors lose money when trading CFDs.

    What is eToro?

    eToro Review - eToro Trading app

    Before we get to the heart of this guide, let’s demystify this trading beast that has sent huge ripples across the trading space around the world.

    eToro is an online broker for stocks, forex, CFDs, cryptocurrencies, and ETFs around the globe. The company was launched in 2007 in Israel. At the time, it was RetailFX, but after three years, the board saw the need to rebrand. So in 2010, RetailFX underwent a massive update to birth eToro, which currently is the leading online securities trading platform in the world.

    The company has its base in Europe and several other offices spread-out across the globe in such countries as the U.K., Cyprus, the U.S., and Australia.

    Initially, eToro was solely a forex trader. But with time, CFDs were added to the list of services. Today, it’s not only a forex trading platform but an expansive online site that deals in commodities and stocks too.

    In addition to adding stocks and commodities to its list of services, eToro has also undergone a massive technological transformation that saw it incorporate some of the most advanced online trading tools into the platform.

    What are the Pros and Cons of eToro?

    Pros:

    • It has a wide range of CFD products
    • It has a large client base that new traders can imitate
    • It has a comprehensive list of cryptocurrencies to choose from
    • You can add a trading copy into the platform
    • It doesn’t charge a commission

    Cons:

    • Traders in the U.S. can only trade in cryptocurrencies
    • Doesnt offer a lowt of education and research materials

    How to Get Started on eToro

    eToro Review - Create eToro trader account

    To start trading with eToro, the first step is opening an account. Luckily, opening an account on the platform is easy – it’s more like opening a social media account. All you need to is:

    • Enter your name, email, and physical address.
    • You’ll receive a confirmation email sent to your email. Click on the link to activate your account
    • After confirming the email address, deposit the initial minimum deposit  of$50 required
    • Verification – following the above steps will see you open an account and start trading. However, you cannot withdraw profits from your account before you verify it. This verification process includes providing eToro with a copy of your identification document. This could be your national I.D., passport, or driver’s license. In addition to this, you should provide proof of address using a recent bank statement or utility bill.
    • After submitting the above information, the eToro team will review it and evaluate your account as a whole. They can either approve it or ask for additional information.
    Note: the process of opening an account and verifying it is the same regardless of your location. However, some platform details vary slightly depending on your location.

    Europe

    As a U.K. or E.U. trader, you will have access to eToro’s services and products, including the lowest fees and trading tools.

    Australia and Asia

    As an Australian and Asian trader, eToro will grant you access to most (but not all) assets and instruments on the platform. Some of the missing assets include currency pairs and stocks. Moreover, if you are from these continents, you should expect to pay higher trading fees and spreads in comparison to E.U. traders.

    For Asian Traders, note that eToro isn’t available in Japan.

    North America

    For the longest time, eToro was not available in Northern America because of some strict rules and regulations in the area about CFD trading and where and how forex brokers could offer their services and products.

    But given the recent popularity increase of cryptocurrencies, eToro and other brokers continue to gain markets in parts of North America and the U.S. In 2019, eToro worked heaven and earth to penetrate the U.S. market, and they succeeded. The platform went live in the U.S. in collaboration with Alec Baldwin and is now available in the following states;

    • Massachusetts
    • Pennsylvania
    • Utah
    • Wisconsin
    • Indiana
    • Missouri
    • Maryland
    • Michigan
    • Colorado
    • New Jersey

    • South Carolina
    • Washington
    • Virgina
    • Arizona
    • Ohio
    • Georgia
    • Iowa
    • Mississippi
    • Alaska
    • New Mexico

    • North Dakota
    • South Dakota
    • Arkansas
    • Maine
    • Oklahoma
    • Rhode Island
    • Kentucky
    • Montana
    • Wyoming

    • Oregon
    • Vermont
    • Alabama
    • Kansas
    • Connecticut
    • Washington DC
    • Florida
    • Texas
    • Idaho 
    • California

    Note: at the moment, eToro isn’t available to Canadian Traders.

    Africa

    eToro is available in many parts of Africa. The largest market is South Africa, where they have an FSCA license.

    eToro demo-Account

    eToro Review - eToro demo trading account

    Though opening a standard trading account is the goal for most traders, you will want to start by practicing on a demo account.

    The demo account is a replica of the regular site, and it presents you with a perfect ground for how to trade before trading in the live market environment. Note that it replicates the real market with the only significant difference here being the fact that the demo account runs on virtual currency.

    Now, a demo account is useful for two reasons:

    • It offers traders an opportunity to better understand eToro platform and familiarize with the trading tools as you prepare to start trading the live markets
    • The demo account helps to develop strategies and is ideal for perfecting your skills before you begin trading

    If you are new to the whole trading world, eToro advises you to start by educating yourself on how to trade securities in their demo trading environment.

    Assets and Markets on eToro

    So once you open an eToro account, what can you trade? Below is a quick overview.

    Forex

    As we’ve mentioned several times, eToro started as a forex broker. To date, currency pairs are still a big part of their asset selection. You can trade significant currency pairs or minor and exotic currencies. And like most forex broker platforms, eToro offers leverage on the currency pairs to help you maximize your profits.

    ETFs and Stocks

    eToro added stocks to its markets at an early stage. This gave it an edge over other platforms and helped its popularity to grow exponentially. You can trade different leading stocks across the globe, including the U.S. and Europe.

    Moreover, eToro supports indices, commodities, and a list of ETFs (Exchange-Traded Funds). Bear in mind that the above assets are like CFDs, and one can only speculate on the asset in question without actually buying it. What’s more, CFDs are also available with some margin and leverage, which could help to increase exposure, the potential profit, and risk.

    Cryptocurrencies

    These are eToro’s primary market, and they have been for several years. Currently, they have an extensive list of cryptocurrencies. For instance, you can opt to trade with most of the popular cryptocurrencies like CFDs in the regular platform.

    To sweeten the deal, eToro makes it possible to trade with cryptocurrency pairs, which they call Crypto Crosses. Alternatively, you can trade with them like currency pairs together with fiat currencies.

    There’s also the option of trading with cryptocurrencies like security. In this case, you can buy and store the cryptocurrency in the eToro wallet.

    If you are into cryptocurrency exchange, you will love the eToroX launched by the platform. We have reviewed this in a section below.

    Tools and platforms

    eToro Review - eToro User dashboard | eToro trading page

    On the eToro platform, you have access to a community and tracing statistics to help you succeed. The portfolio you create is on display to the network. As such, you’ll need to get over any dislike of getting attention if you want to explore the social trading service eToro offers fully.

    Below are several features to look out for on the platform.

    OpenBook

    The original eToro trading platform was WebTrader initially and was one with OpenBook to come up with a one-stop-shop for its traders and clients. eToro OpenBook is not just a trading platform but a social app as well. And like any other app, you can view the profiles of other traders, check the market prices, and use several eToro tools, including CopyPortfolios and CopyTrader.

    CopyTrader

    If you are a newbie and know nothing about trading, it can be scary to spend real cash and enetring into your first few trades. And you would probably feel more confident with your trades and and secure about your deposited capital if you knew that the moves and decisions you make have the support and backing of an expert trader. If there was a way to copy what trading experts do in the trading markets to increase your odds of making a profit, it would be great, right?

    Well, you are in luck. That’s precisely what CopyTrader is for. The tool allows you to pick trading experts in the industry and imitate them. Using this tool, you can copy not one but up to 100 expert traders. However, this tool is only available on the regular trading account only.

    Luckily, setting up CopyTrader on your account is not difficult – it’s just a few clicks away. Simply choose the traders to copy, choose the amount in your local currency, and take a back seat as the eToro system copies expert trades, and improves your chances of turning a profit.

    CopyPortfolios

    No, you can take the copy tool to a new level if you have an idea of what you are doing using CopyPortfolios. How?

    You see, CopyPortfolio is a combination of two strategies; market portfolios and the top trader portfolios. With the top Trader Portfolio, you can copy traders who use your specific strategy.

    In the event you want to trade commodities, use the Top Trader Portfolio. It links to your trading account with successful oil, silver, or gold traders. On the other hand, Market Portfolios don’t include traders. Instead, they are all about CFDs. They bundle CFDs under an umbrella of a single strategy. To start on this, you need to deposit about $5,000.

    Social News Feed

    eToro makes things even better; it has a social feed. It functions like Twitter, but it’s better for traders looking to learn the ropes fast and experts looking to share trading tips. Every trader gets a specialized news feed tailored to what they are into. Moreover, they can make updates on the platform and discuss strategies and tag one another in conversations to make it easier to follow.

    Traders also get alerts when the market goes volatile or when the trader you copied adds a new trade or makes a new post.

    eToro Fees

    Just when you thought things could not get any better, then you learn that eToro is a low-commission broker. This means that you don’t have to pay eToro anything when closing and opening positions on the platform. This is a huge plus since many regular stockbrokers, cryptocurrency exchanges, and some forex brokers impose huge and multiple trade costs.

    So does this mean that the platform doesn’t charge no trading costs? Well, of course not! There are some fees you pay. But even then, they are not as expensive. Below is a detailed explanation of what you should expect.

    Trading fees

    The trading fees on the platform apply to close and open positions in addition to using the platform. For instance, for stocks, ETFs, and forex, eToro charges you a markup they call a ‘spread.’ The spread is the difference between the closing and opening prices.

    If you compare this spread to what other brokers have, especially in Europe, you’ll appreciate eToro. However, it’s important to note that most markets and assets have higher spreads in comparison to European traders.

    Also, if you keep positions open outside the trading hours, you will be charged overnight fees. This is true, especially for stocks that are kept after their exchange time is over.

    What do experts think about these fees? Well, all factors considered, eToro fees are nothing outside what is standard in the industry. And actually, the prices are the bare minimum. They help to give eToro an edge over its competitors.

    Non-trading fees

    These are charges that apply to eToro features that are not directly related to actual trading. As pointed out earlier in the guide, eToro has a high minimum of $50 for new entrants. But though this is not actual fees, it’s higher than what most brokers in the industry require.

    Also, eToro charges a $25 withdrawal fee (other brokers don’t have this fee). For inactive users, there is a $10 fee per month.

    Web, Desktop and Mobile Platforms on eToro

    Regardless of the device, you have with you, or the type of platform you prefer to trade on, you’ll find eToro has something ideal for you.

    The main trading platform is web-based. An in-house software team designed it. The platform is referred to as a Copy Trading platform since the majority of its features are copy trading even though you can open and close the positions alone as well.

    The copy trading features allow you to study what other expert traders are doing and to copy all their moves without having an understanding of how trading works. Because of this, you don’t need to analyze the market to get value. You can also use the Copy-trading feature on funds and portfolios. For funds, there are several underlying securities known as Copy Funds.

    eToro is mobile friendly and has minimal limitations on both iOS and Android. The web platform is excellent, and so is the eToro mobile app. You can trade in any instrument you please.

    Unfortunately, eToro doesn’t have a downloadable platform. Instead, everything is on the web platform.

    eToro Research Offers

    CFDs are complex trading instruments. eToro understands that there is a steep learning curve for beginner traders. Because of this, they have an education center complete with actionable information, whether you are a newbie or a veteran. The two courses offered include:

    Trader Course

    The trader course provides information on some basic forex terms, some basic trading strategies, and some types of strategies. It’s is also complete with a glossary of financial concepts.

    Investor Course

    This is more of a global trading course. But aside from trading, it also covers capital management and several different ways of analyzing financial products, including advanced tech analysis.

    But if you do not have the time to go through the courses, you can go through a comprehensive list of instructional videos or sign up for one of their live trading webinars. But if you are old-fashioned, the eToro blog is a great resource that covers all industry news as they develop.

    Is eToro Customer Support Good?

    eToro does not make it difficult to get in touch with its customer support. You can reach out for quick solutions through an automated ticketing system.

    Unfortunately, it doesn’t have a phone or email address. But if you want to make corporate inquiries, you can reach them on their official addresses in London, Sydney, and Hoboken. The Australian office has a phone number and an email address.

    Is eToro Safe?

    For a platform where you enter your financial details, it needs to be secure and transparent. The last thing you want is for your account to be hacked, and all your hard work doesn’t go up in flames. The good thing with eToro is that it is registered with CySEC (Cyprus Securities and Exchange Commission). It is also registered with the British Financial Conduct Authority.

    Moreover, the Australian Securities and Investment Commission ASIC) and FinCEN in the U.S. recognize eToro as a legit and licensed broker. Trader funds are stored safely in high-end European banks.

    What about your data? Well, eToro protects user data using state of the art line encryption as well as firewall technology. EToro employees can only retrieve any specific information about users and traders with proper clearance. When you are depositing and withdrawing money, you can rest easy knowing that your transactions are protected using secure socket layer technology (SSL).

    Conclusion

    eToro is a leading broker in the world with one of the best trading networks in the industry. It leads the pack because it does many things right. For one, it does have exorbitant trading fees, and second, it allows users to copy what other trading experts in the industry are doing.

    Moreover, it has a wide selection of services, markets, and tools to take advantage of these include CFDs, stocks, commodities, and trade forex.

    Disclaimer: Transacting in virtual currencies is subject to various risks, such as price volatility, and is therefore not suitable for everyone. Your capital is at risk. eToro offers only Crypto (real crypto no CFD) so only buy with no leverage, later on this year eToro will also offer real stocks for trading. 75% of investors lose money when trading CFDs.

    Glossary of Trading Platform Terms

    Depiction of percentage growth rate of funds depicting Fed Rate percentage changes | Learnbonds
    Platform Fee

    The trading platform fee refers to the amount a trader pays to use the platform and access its integrated platform features and tools. It can be a one –time fee paid for the acquisition of the trading platform, a subscription fee paid monthly or annually. Others will charge on a per-trade basis with a specific fee per trade.

    chart and graph depiction of market performance illustrating capital gains | Learnbonds
    Cost per trade

    Cost per trade is also referred to as the base trade fee and refers to the fee that a broker or trading platform charges you every time you place a trade. Some brokers offer volume discounts and charge a lower cost per trade for voluminous trades.

    A illustration of justice scale showing authosity a Custodian holds to custodial Account | Learnbonds
    Margin

    Margin is the money needed in your account to maintain a trade with leverage.

    Illustration of an interlink depicting P2P lending | Learnbonds
    Social trading

    Social trading is a form of trading that allows for the interaction and exchange of trade ideas, signals and trade settings between the different classes of traders.

    Equity Release image with a house atop stacks of coins
    Copy Trading

    Copy trading, also known as mirror trading is a form of online trading that lets traders copy trade settings from one another. In most cases, it is the newbies and part-time traders that copy the positions of pro traders. The copiers -in most cases - are then required to surrender a share of the profits made from copied trades – averaging 20% - with the pro traders.

    A pink bond not with green dollar sign
    Financial instruments

    A Financial instrument ideally refers to the proof of ownership of financial commodities of monetary contracts between two parties. In the money markets, financial instruments refer to such elements as shares, stocks, bonds, Forex and crypto CFDs and other contractual obligations between different parties.

    Depiction of ETF performance |ETFs Learnbonds
    Index

    An index is an indicator that tracks and measures the performance of a security such as a stock or bond.

    Dollar sack and potted plant depicting how assets grow in a Fund | Learnbonds
    Commodities

    Commodities refer to raw materials used in the production and manufacturing of other products or agricultural products. Some of the most popular commodities traded on the exchange markets include energy and gases like oil, agricultural products like corn and coffee, and precious metals like gold and silver.

    Depiction of grrowing stacks of coins illustrating fixed income rates | Learnbonds
    Exchange-Traded Funds (ETFs)

    An ETF is a fund that can be traded on an exchange. The fund is a basket containing multiple securities such as stocks, bonds or even commodities. ETFs allow you to trade the basket without having to buy each security individually.

    Depiction of an uptrending index fund | Learnbonds
    Contract for difference (CFD)

    CFDs are a form of contractual trading that involves speculating on the performance of a particular trade in the market. CFD’s will basically allow you to speculate on the future value of securities such as stocks, currencies and commodities without owning the underlying securities.

    Dollar sack and potted plant depicting how assets grow in a Fund | Learnbonds
    Minimum investment

    The minimum investment simply refers to the lowest amount of capital injection you can deposit into a brokerage or a trading platform. Different brokers demand varied minimum investment amounts from their clients either when registering or opening trade positions.

    Depiction of coins and growth curve illustrating mutual funds | Learnbonds
    Daily trading limit

    A daily trading limit is the lowest and highest amount that a security is allowed to fluctuate, in one trading session, at the exchange where it’s traded. Once a limit is reached, trading for that particular security is suspended until the next trading session. Daily trading limits are imposed by exchanges to protect investors from extreme price volatilities.

    Depictio of man thinking of money and risks illustrating a Registered Investment Advisor | Learnbonds
    Day traders

    A day trader is a term used to describe a trader who is constantly opening trades and closing them within a day. It is a common term used to refer to forex traders who open trade and only hold onto it for a few minutes or hours before disposing and having to leave no open trades at the time the trading day closes.

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    FAQs

    In which countries is eToro accepted?

    Not all services by eToro are acceptable in all countries. Because of CFD Regulation, some countries, including Belgium in Europe, the U.S. Brazil, and Hong Kong, don't have eToro CD services.

    How do I deposit money?

    How does eToro make money?

    eToro makes its money by charging clients for the services. It has a transparent spread on the Ask quote.

    Where is eToro based?

    eToro has offices in Sydney, Australia, London, UK, New Jersey, USA, and Limassol Cyprus.

    What is the maximum leverage in eToro?

    The maximum leverage for traders in eToro is 1:30

    Does eToro make use of MetaTrader?

    Instead of MetaTrader, eToro makes use of its proprietary platform.

    How do you withdraw funds?

    Withdrawing funds is through deposit methods. However, it takes a day to process payment, and you pay a minimum of $25 per withdrawal transaction.

    Are the profits from eToro taxable?

    No, they are not. However, you should be aware of HMRC's position on this.

    What are the trading hours?

    The eToro website is available 24/7. However, some assets are only available for trading when the specific market is open. This means that stocks on the LSE are available only during U.K. trading hours. You can continue trading outside these hours, but it will attract a fee.

    How do you find traders to copy?

    It is a simple process but one that needs some bit of research and time to find the perfect trader for your needs. From the Copy Trader screen, you'll be presented with several filters to help you narrow your search. These filters include location, market, timeframe, and profit.

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    All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
    thadues

    Thadeus Geodfrey has been a contract writer for Lernbonds since 2019. As a fulltime investment writer, Thadeus oversees much of the personal-finance and investment-planning content published daily on this site. With a background as an iGaming expert and independent financial consultant, Thadeus’s articles are based on years of experience from all angles of the financial world.

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