Wednesday, June 16, 2021

eToro Broker Review

Currency Pairs50
Max Leverage30:1 (400:1 for Professional Traders)
RegulatorsASIC, FCA, cySEC
Trading PlatformseToro
Trade On Point Trust Rating43/50

Est: 2007, Melbourne, Australia.

Range of Services*** ½
Mobile Trading**** ½
Spreads and Commissions*** ½
Technical Tools and Analysis****
Overall****

Background

eToro was originally founded under the name RetailFX in 2007, in Tel Aviv, Israel.  They are an Israeli based STP broker and are regulated by tier one regulators (ASIC) – Australian Securities and Investment Commission and the United Kingdom’s (FCA) – Financial Conduct Authority. Headquartered in Tel Aviv, Israel, and they also maintain subsidiary offices in various other major centres including London, Shanghai, New Jersey, and Limassol.  eToro was originally a financial trading technology developer and has focussed heavily on social copy trading since its inception.

Platform and Tools

eToro does not offer trading on any third-party platforms.  eToro clients trade on the broker’s own trading platform which is centred around social and copy trading.  eToro offers their own range of financial instruments for technical analysis with its new ProCharts feature, however the number of intruments is more limited than the more common third-party platforms such as cTrader, Metatrader, or NinjaTrader.  The interface itself is not overly detailed, simply and effective at what it tries to achieve.  New traders are likely to respond well to the ease of use and the ability to compare, follow, or copy other traders as a way to start developing their own trading knowledge.  With over 13 million registered accounts, there are plenty of traders in the eToro trading network to learn from.

Spreads and Commission

eToro offer a retail and a professional account.  All new eToro clients start on a the retail account which is a commission free account.  Spreads on eToro’s CFD products a comparatively high with other ECN Forex brokers.  GBPJPY, for example, has an average spread with other CFD brokers of approximately 2.8 pips whereas the spread on eToro starts from 3 pips.  Professional account can be applied for by clients who are regularly trading and hold over $500,000 USD equity.  The main difference between a retail and a professional account is the allowable leverage.  Retail accounts max out at 30:1 leverage, while professional accounts offer leverage up to 400:1.

Trading Markets

eToro offer trading on 50 currency pairs including combinations of the USD, EUR, AUD, JPY, GBP, CAD, CHF, and CNY.  Access to Exotic currencies such as PLN, HUF, NZD, SEK, HKD, and ZAR is available in select pairs (primarily paired with USD, EUR, or GBP). A large number of Stocks, ETFs, Indices, Commodities and Crypto Currency markets are also offered.

Standard customers can take advantage of leverage up to 30:1, while traders who have been accepted by eToro as professionals can leverage up to 400:1.  Leverage should always be treated with caution.  Leverage not only increases your ability to generate fast income, it can also result in quick losses.

Mobile Trading

The eToro mobile app is available on both Apple and Android devices in 21 languages.  The trading platform in the app is very similar to the Webtrader platform and offers the same functionality.  The app allows for notification levels to be set by the user and utilises mobile specific functions such as swipes for eae of use.  Social and copy trading is also fully supported by the app.

Support Services / Languages

eToro support multiple payment options including PayPal, Skrill, Klarna / Sofort Banking,  Credit Card, Debit Card, Neteller, Union Pay and Bank transfer.  Swap-Free no-interest trading accounts are offered by Pepperstone for persons who cannot pay or receive swaps.  eToro only offers USD as a base currency.

eToro offers a Trading School for new traders which includes webinars, podcasts, and for those in London, a face to face classroom course.  eToro also offer some resources for the more experienced trader such as daily markets guides, news and analysis articles, and a daily market review. 

Customer service agents are available to eToro clients, however on to eToro club members Silver tier members and above.  To become a Silver tier member clients must have at least $5,000 USD equity in their account. Customer service live chats are available 24/5 in 7 languages, however there is no phone support available.

Level of Trust

47/50

Regulated 10/10 – eToro is regulated in Australia by ASIC, in the UK by FCA, and in Cyprus by CySEC.

Secure 9/10 – eToro’s clients’ funds are kept in tier 1 banks, and all information between the client and server is SSL encrypted. 

Access to funds 7/10 – Withdrawals are transferred by bank wire transfer, credit/debit card and electronic wallet.  Withdrawals can take 2-3 days to reach your account.  Funds withdrawals from eToro outside the US incur a $5 withdrawal fee.  Due to base currency only being available in USD the clients own financial institutions may also charge a exchange fee.

Recognition 10/10 – 2019 “Best Global Forex ECN Broker” Global Forex Awards, 2020 “Best Trading Performance Tools” Professional Trader Awards.

Support 7/10 – eToro offer live chat, and e-mail support to their clients in 21 languages.  Unfortunately clients cannot contact customer support on weekends.

eToro Risk Warning

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.  67% or retail investors lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Conclusion

eToro is primarily a social trading platform and has designed its services around this particular niche.  eToro charges no commissions to trade however the higher average spreads make it less attractive than several other CFD brokers that offer no commission accounts.  If you are a new trader wanting to join a community for help, advice and support, eToro is uniquely designed for you.  Alternatively if you don’t trust yourself and want to chose others to make your trading decisions for you, the copy trading features on eToro are market leading and easy to use.

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Trevor Woodmanhttp://www.metatraderindicators.com
MetatraderIndicators.com was developed by Forex traders for traders. We wasted hours, probably years, looking for indicators, software and Forex broker reviews. Metatraderindicators.com is a hub for technical traders. It represents years of work, knowledge and experience. Enjoy and stay true to your passion.
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