eToro originally began as a general trading platform for common financial assets. As the years went on, the service started accepting and working with cryptocurrency and other trading instruments that are emerging at lightning speed. Also, they were among the first platforms to add CopyTrading and CopyPortfolios.
Now that eToro has accumulated a user base of over 6 million traders, it’s time to verify whether you can trust it with your own money. Read on to learn everything you need to know about this service.
Quick History of eToro
The history of eToro is filled with notable events. To help you understand how it developed into such a big platform, we’ve compiled a table of significant developments.
|2007||First launch of the platform, created by three entrepreneurs for easy online trading. The goal was to minimize the dependency on banks and other conventional financial institutions when working with assets.|
|2011||Launch of OpenBook, the first social trading platform of its kind.|
|2012||Addition of currencies and commodities to the list of available financial assets.|
|2013||Android and Apple mobile app and an added feature of trading Bitcoin via CFDs.|
|2016||Addition of the CopyPortfolio feature, which bundles together a select combination of financial assets.|
|2017||Support of multiple cryptocurrencies, including Ethereum, Litecoin, and XRP.|
|2019||Launch of eToroX, a full crypto to crypto exchange.|
What does one of the largest brokers in the world have to offer in terms of trading conditions? We’ve grouped information into several categories, so let’s go over them one by one.
There are two basic types of eToro accounts: a demo account and a single live account. If you’re interested in more advanced and detailed tiers, we will also discuss them below.
The difference in basic accounts is as follows:
- Demo account – As a first-time user, you will receive 100,000 AUD of virtual funds to practice. This is an extremely safe option to use until you get fully comfortable with using this service. There are no commissions and a minimum spread of 1 pip.
- Live account – This one is the standard type of account that professional and amateur traders use. Here are you employ all your trading strategies and potentially gain a profit. The minimum deposit is 200 AUD, but you can trade with as little as 50 AUD and still get good results. But remember that there are no guarantees.
There is also a thing called eToro club and tiers. It is associated with higher levels of equity and a more detailed tier system. There are minimum amounts that will get you access to these tiers: Silver (5,000 AUD), Gold (10,000 AUD), Platinum (25,000 AUD), Platinum+ (50,000 USD), and Diamond (250,000 AUD).
The higher you go in the tiers, the more advantages you will receive in return. For example, you can take advantage of gift items (like sports tickets, a debit card, or a subscription to the Financial Times).
But most importantly, you will get access to features that will improve your trading experience – market analysis, the Trading Signals platform, unlimited withdrawals, and personal analytical sessions.
To open a regular account, you’ll need:
- Proof of identity (passport or driver’s license are the preferred options);
- Proof of residence (bank statements or similar documentation to stating your residence);
- Tax identification number (this rule might vary depending on the country in which you reside).
The dashboards within the trading platform show an overview of all current trades. You can browse different sections to discover all the functionality available. The layout is pretty simple, but unfortunately, it lacks customization capabilities.
The platform has both browser-based and mobile options, which is a plus. This means that users can keep track of their trades even when they’re not behind their computers. The interface is presented in multiple languages, such as English, Chinese, French, German, Spanish, Polish, Russian, Greek, and Arabic.
As we’ve mentioned, the team implemented social trading, which is a process by which traders can analyze the most profitable trades and copy other traders’ actions in the hope of achieving the same results.
The benefit of using eToro is that it’s not limited to only one or two markets. To give traders an opportunity to diversify their portfolios and minimize the risks, the platform offers the following markets to try your skills at:
- Stock market CFDs – These assets can be a great way to hedge short-term volatility, for example, by offsetting your losses with a short CFD share trade. Plus, you can enjoy larger leverage features.
- Indices – This option helps you gain exposure to global or regional markets without analyzing the performance of individual companies.
- Forex – This market is considered very liquid and is also very efficient. Also, unlike with stock markets, Forex gives you the opportunity to generate potential profits 24 hours a day, 5 days a week. At eToro, there are 47 available currency pairs to choose from.
- Commodities – If you’re looking for an effective means of diversification in your investment portfolio, you can trade with commodities, such as silver, gold, copper, palladium, platinum, natural gas, and oil.
- Cryptocurrencies – If you know what you’re doing, comparatively small trades can have a huge impact on your profits. eToro allows you to trade with 17 major cryptocurrencies through CFDs.
Cryptocurrencies are one of the largest attractions that drive users to eToro. The team is working on expanding its range, but there aren’t many smaller cryptocurrencies at this point.
Spreads and Leverage
The spreads on the AUD/USD currency pair are kept at 1 pip, which is decent. However, in terms of spreads on other pairs, the spread is 3 pips or wider. If you compare it to other leading platforms, this is not the best result. Leverage at the platform reaches up to 400:1.
Deposits & Withdrawal Methods
There multiple payment methods for user deposit and withdrawal. Bear in mind that depending on a country and local regulations, not all of these methods will be available. In total, there are more than 10 acceptable ways to top up your account, such as:
- Credit/debit cards
- Wire transfers
- PayPal (only available for countries where PayPal is accepted)
- E-payment systems (Giropay, Neteller, Skrill, WebMoney, Yandex, Local Online Banking)
Each payment method falls under the state regulation of the country in question. There are also some variations in terms of fiat currencies, depending on which method you choose. The list of currencies includes USD, EUR, GBP, and AUD.
As for withdrawals, there are significantly fewer options. Nevertheless, it shouldn’t be a huge issue as it supports major payment methods, such as:
- Credit cards
- Bank transfer
At this point, eToro doesn’t support cryptocurrencies as a method for deposits and withdrawal. This option was supposed to be added after the introduction of the eToroX service, which is no different from regular crypto exchanges. However, the feature isn’t available yet.
Just like all exchanges, eToro profits by charging its clients fees for different actions. Luckily for beginner traders, there are no fees during the registration process. Instead, there is a commission based on the spread. We should point out that spreads will condense and widen as market conditions and liquidity change.
Because of this uncertainty, the spreads below are the minimum values, and there are no guarantees that they will stay the same. The daily break spreads are as follows:
- 1.5% for Bitcoin
- 5% for Bitcoin Cash
- 3% for Dash
- 2% for Ethereum
- 5% for Ethereum Classic
- 3% for Litecoin
- 5% for Neo
- 5% for Stellar
- 3% for Ripple
Unlike with stocks and other traditional assets, there are no fees for keeping your cryptocurrency trades open overnight or throughout the weekend. The reason is that it’s trading 24 hours a day.
However, there are fees for holding Ethereum or Bitcoin positions if you short them and apply leverage. These fees also change, so you’ll have to check with the platform for relevant information.
Research and Analysis Tools
Research data is available in 21 languages, which is the same for both desktop and mobile versions. Technical analysis tools are applied well and offer sufficient insight for better trading. However, there is no comprehensive, fundamental data.
Fundamental analysis looks at data that is expected to affect the price or perceived value, such as cash flow, return on assets, P/E, EPS, dividend yield, and beta. However, this feature is only available for stocks and no other class assets.
eToro’s charting tool is considered one of the most comprehensive ones on the market. Traders can use any of the 70 technical indicators currently available. It also allows you to automatically save charting settings, which means you can save a lot of time.
The downside is that the data is only the data for the past 6 months is available, which could definitely use some improvement.
Another exclusive feature for stock trading is recommendations from analyst reports. The data can be gathered from analyst consensus (buy/hold/sell), average price target, hedge fund sentiment, and insider trading sentiment. Bear in mind that this in-depth analysis doesn’t cover all stock supported on the platform.
The mobile experience is at a good level. The look and feel of the platform remain the same after switching from desktop to mobile. There are also valuable features, such as synched watchlists and dashboards, that ensure unity across both versions.
Out of 70 indicators available on the web-based platform, there are only five indicators presented on mobile. Users have also pointed out that the lack of drawing tools in the app feels limiting.
For cryptocurrency trading, eToro has a separate application to act as a wallet. Here users can deposit and withdraw funds processed by eToroX. The app also acts as a way of upholding customers’ security, keeping private keys, and minimizing the risk of their theft or loss.
If you have questions about the service or face issues with making trades, there are several things you can do. First of all, you can head over to the FAQ section and educational materials. If you don’t know what you need, you can use:
- Live chat – The chat is available 24/7. But sometimes you have to wait a while for the answer since operators can’t always handle the load of questions.
- Trading academy – For traders who are just learning the basics of this industry, you can learn a lot here about a range of topics, such as Forex and CFDs trading. Resources include webinars, an e-course, trading tips, and a dedicated education center.
- Phone service – We don’t recommend using this method as you might be charged ridiculous fees. But the option is still there is you want to use it.
Is eToro Trustworthy?
eToro is licensed and regulated by financial regulatory bodies in the US, Europe, and Australia. The Australian licensing comes from the Australian Securities Investment Commission (ASIC), which enforces and regulates company and financial services laws for all legal companies. The platform’s trading name is eToro AUS Capital Pty Ltd.
A lot of users have good things to say about eToro, such as the ability to share the most recent trading news and strategies with other users.
That said, the actual feedback from customers is not all positive. Some review websites showcase the most common concerns and complaints about withdrawal fees, spreads, and customer service.
What we conclude from these reviews is that eToro is a reliable platform to trade with, and it’s definitely not a scam. But there have been controversies regarding cash flow and reserve issues, along with some recurring complaints.
Fortunately for users’ funds, eToro has recommended security policies that any online platform should adopt:
- Two-factor authentication (via phone and the Google account)
- Private password
In terms of protecting the platform from leaks and exploits, the website uses SSL encryption to protect all customer data. It’s one of the most common ways to prevent the theft of credit card and digital wallet information. Plus, there are measures to prevent unauthorized fund withdrawals.
Some people also have reservations about cryptocurrency wallets or holding digital funds in general. To address these concerns, the team assures that users don’t actually own the coins that they trade with. Instead, they employ a technique that allows you to speculate on their value.
The cold storage is reserved for a separate entity, which is eToro X. This subsidiary company employs FIPS 140 hardware that keeps users’ private keys safe.
eToro Pros and Cons
Now is the time to take a look at our final list of comparisons. Just like any platform, eToro has strong and weak aspects, and our job is to highlight all of them.
|Social/copy-trading platform Well-designed and intuitive interfaceLots of new features and assets being addedWide range of marketsRobust charting Secured with 2FA and SSL encryptionGood for beginners||No regulative protection over cryptocurrenciesSupport department can be slow during high activityLittle customization Wide spreadsNo streaming news or market updates|
The primary focus of eToro now is cryptocurrency trading, although it might be useful for anyone interested in trading in general. For example, it’s great for trading regular stocks and Forex as well as for investing in pre-built portfolios. The feature that eToro pioneered is CopyPortfolios, which remains one of the platform’s strongest aspects.
An important point to mention is that eToro isn’t suitable for trading smaller cryptocurrencies. So, if you only intend to trade major ones, this platform should be useful.
As for the question of whether you can trust this company, the answer is yes – but to a reasonable extent. Cryptocurrencies aren’t backed up by any kind of government or central bank. Plus, there are inherent risks associated with any kind of trading. Always stick to the proper risk management techniques and trade reasonably.