eToro was founded in 2008, and is based in Cyprus, Israel, UK, China and Russia.
In a nutshell
- Instrument Classes (CFDs): Forex, Commodities, Indicies, Stocks, ETFs, Bitcoin
- Max Leverage: 1×400
- Scalping: Allowed
- Spreads: From 2p
- Minimum deposit: $50
- Regulation: CySec (Europe), FCA (UK).
- Support options: Live Chat, email, phone (24/5)
- Payment options: Credit and Debit Cards, PayPal, Neteller, Union Pay, Skrill, GiroPay, WebMoney, Yandex, Qiwi, Wire Transfer
- Leverage: Flexible up to 1×400
- Scalping: Allowed
- Trailing Stops: Yes (only for manual trades)
- Spreads: Variable, min 2 pips
- Minimum Stop Loss/Take Profit: 0.5% of position size
- Rollover: Yes
eToro is not the cheapest of brokers and their spreads grow quite significant on rarer currency pairs, however trade execution is quite seamless and overall the experience of trading with this broker is overwhelmingly positive. The flexibility of a large range of leverages make it suitable for most types of traders, and even hardcore scalpers may be willing to overlook eToro’s spreads thanks to fast execution times and a very handy one-click-trading mode. Other benefits include relevant and on-the-button news alerts via the social newsfeed, and a no-commision purchase of non-leveraged stocks. If there is one caveat is that eToro has different leverage limitations on different instruments, even within the same asset class. So for example, while the max leverage on EUR/USD is currently 1×400, the max leverage on EUR/CHF is only 1×25. These different limitations seem almost random, so make sure to check the leverage limits on the instrument you want to trade in advance.
- Number of currency pairings: 42 (including a number of exotic pairings).
- Other instruments: Commodities, Indices, Stocks, ETFs, Bitcoi
The currency pair selection at eToro is rather standard, with the exception of a few slightly rarer additions such as the Turkish Lira and the Singapore dollar. However, unlike many FX brokers, eToro offers quite a wide selection of other instruments in other asset classes. Their commodities range goes beyond the standard gold, silver and oil to include gas as well as other precious metals such as palladium. The addition of ETFs to the instrument selection is also a nice touch and a rare find in the Forex industry. A particularly impressive advantage is eToro’s stock selection, consisting of over 800 stocks.
eToro is known for inventing the CopyTrading concept. You can follow other traders who are trading with eToro, and simply auto-copy their actions. You can choose whether to follow one specific trader, or a bundle of them, and you can choose how much of your budget will be allocated to copying. This 3,000 word review explains this topic in detail. Here is a live feed of the top traders:
- Contact Methods: Phone, Live Chat and Email.
- Telephone Numbers: Cyprus and UK numbers
- Support Available In: English, French, Spanish, Italian, German, Chinese, Arabic and Russian
eToro’s Customer Support seems to be overall friendly and professional, and it is also nice to have such a wide variety of language options. The most effective method of resolving any issues seems to be via Live Chat or by phone. The addition of a support option via the eToro social network on the “Customer Service Wall” seems a touch superfluous as it seems to be just a public version of the kind of support you can get via email. If you have a complex complaint, eToro has quite a lengthy complaint procedure put in place with a ticketing system, however on the whole they tend to be quite fair and err on the side of compensation.
- Regulated: By CySec (Europe), FCA (UK), ASIC (Australia, Asia Pacific)
- MiFID Regulated: Yes
- Can accept US traders: No
- Regulatory Record: Clear
eToro Europe LTD. is regulated by the CySec authority in Cyprus which means that the brokerage is MiFID regulated. This ensures a minimum standard of financial regulation as set out by the European Union. Any UK traders at eToro trade under eToro UK LTD, which is a subsidiary of eToro and is regulated by the UK’s FCA.
eToro is more than just a forex brokerage. It’s a social trading network, a stock trading platform and a proprietary trading software.
Read about additional aspects here:
Billing itself as the world’s largest social network, eToro was one of the first platforms to combine elements of social networking into its trading offering. Essentially, any eToro trader has a public profile, which automatically shares any opened trades with the rest of the network. The profile can be viewed by anyone on the network and includes performance and portfolio stats, as well as personal details that traders choose to display, such as a profile pic and a bio.
Find your target traders easily:
Like any social network, eToro’s main interface is essentially composed of feeds containing items from traders users put in their Watch List. Traders can post links and text, as well as comment, like or share each others posts. The feeds also contain trade items, i.e. when a trader you’re following opens or closes a trade you will see it in your feed. In addition to traders you can add markets to your watchlist and receive news about those particular markets in your feed.
The main feature that has made eToro a standout in the industry is the ability to copy any of the traders in the network. With the use of the People Discovery tool, you can search through the millions of investors who trade with eToro to find members who correspond to your specific criteria. You can then look through those traders’ public stats and portfolios to see the details of their performance over the time they’ve traded at eToro. A particularly useful indicator is the trader’s risk score, which is calculated based on exposure and drawdown statistic. It basically lets you know what kind of risk you are taking when copying a trader. However, copying at eToro is apparently not for those with a high risk appetite as you cannot copy a trader with a risk score of 7/10 or higher.
Once you’ve found a trader you wish to copy, all you have to do is allot a portion of your funds to copying this trader and your account will automatically emulate any position this trader opens.
Pay attention however as the minimum amount for copying is $100 and you will not be able to open a copy if the average projected copy position amount is less than $1. You will also have to set a Copy Stop Loss, which functions just like a regular Stop Loss order and can help you cut losses in case the trader you’ve copied has a bad run. It is a useful tool, on the other hand there is no “Copy Take Profit” or a trailing stop loss feature.
Despite that, you can always edit your copy manually by adding funds, removing funds, closing individual trades or simply closing the copy altogether.
New – CopyFunds
Those who get copied have an opportunity to earn monthly payouts based on the number of copiers they have. To do so they can join eToro’s “Popular Investor” program which rewards those traders who provide the backbone of the copy system so to speak. There are four tiers in the Popular Investor program. To progress from tier to tier users need to accumulate copiers and have a certain amount of overall funds allocated to copying them. The more copiers they manage to accumulate and retain the higher the payouts can go.
2. eToro Stock Trading Review
For an FX broker and a social trading platform, eToro has clearly made a conscious effort to expand its stock selection beyond any standard norms in the industry. Its selection currently counts over 800 stocks, and there are new stocks added to the mix continuously.
What eToro tends to do is add all the stocks that make up the main indices of the world’s major stock exchanges. Thus you will find all the stocks in the NYSE index (such as BAC, CHK, BMY), the NASDAQ (AAPL, GOOG, MSFT), the UK100 (BP.L, BARC.L, HSBA.L), the DAX (ADS.DE, ALV.DE, BAS.DE), the CAC (SOLB.PA, BNP.PA, AIR.PA), and more.
Stocks at eToro are traded as CFDs which means that you can open short positions on stocks and use leverage. The maximum leverage eToro offers on stock trades is 1×10. Because there are no sell quotes on stocks in the interbank market, eToro generates spreads as a fixed 0.1% of the stock’s value. Basically it is the same as paying a 0.1% commission up front, except that representing the commission as a spread may seem more natural to a currency trader and makes it easier to calculate your P/L.
Surprisingly, even though the stocks are traded as CFDs, i.e. a trader with an open stocks position doesn’t actually hold any shares, stocks at eToro pay out dividends. The dividends sum is based on the dividend declarations made by the companies in question and are paid straight into position holders accounts. And just like all other instruments at eToro, stocks are subject to rollover, however most of the rollover on stock positions is negative, meaning that you will get credited a fraction of your investment amount every time you hold a stock position overnight! Check the eToro fees page for the precise rollover details for each stock.
eToro offers a range of global stocks which are organised into a number of different categories, the offering from eToro focuses mainly on well known household or lifestyle brands which many people will already be familiar with. For instance a number of huge global brands such as Coca-Cola, Pepsi Google and Apple can be traded on the platform. Initially the range of stocks was rather limited but eToro have continued to add more Stock CFD’s to their social trading network and are likely to continue adding a range of different Stocks to the platform. While the range of Stocks is rather limited when compared to brokerages or platforms that specialise in CFD trading, the range of Stocks available will still present traders with plenty of trading opportunities.
How does Stock Trading at eToro Work?
If you ever traded Stocks before you might find eToro a bit different. eToro have decided to make super easy to trade stocks on the platform instead of purchasing set amount of Stock CFD’s, individuals instead decide how much they want to invest in a particular stock. This makes it possible to speculate on a particular stock with as little as $10. Once you have decided how much you want to invest into a particular simply click Buy and the deal will be done at the specified price. Traders do pay a 0.1% commission for each Stock position opened through the platform, which is pretty reasonable. At this current time it is only possible to long on Stocks, with it not being possible to go short. It has to be said the fact that traders can only go long is quite a big drawback, as this significantly limits opportunities for traders.
Stock Trading at eToro
eToro is the first major social trading network to offer a wide range of Stock CFD’s, this has set eToro apart from other social trading networks which are solely focused on Forex trading. Stock trading eToro has been massively popular with the network continuing to expand its offering. eToro have made it very easy to speculate on range of major stocks, with one of the only drawbacks of using the platform being the inability to short sell stocks. Those who want learn more about eToro should check out our full review- we’re only halfway through it!
3. eToro Platform Review
eToro operates two main trading platforms: the eToro web app and the eToro Mobile Trader.
eToro’s web platform is browser based, meaning there is no software download required, and contains the full extent of eToro’s trading capacity. The platform integrates both manual and social trading features in the same interface, and you can very easily switch between the two using the navigation menu. Another major plus is that both manually opened positions and ones copied from other traders appear in the same open trades screen so you can monitor all your positions in one place without having to switch between platforms, as is the case with some other social trading platforms.
The platform also includes charting software with an extensive range of drawing tools and technical studies.
It certainly doesn’t have all the bells and whistles of some of the more technical platforms out there, such as the MT4 for example, but in eToro’s case perhaps this is a good thing. The platform is clearly more geared to focus on the social aspect of trading and to make the trading experience easy and intuitive. However, traders used to trading with MT4 who are looking for the same kind of tool arsenal may be disappointed.
The eToro Mobile Trader, available for both Android and iOS, is a slightly redacted version of the main web based platform, but containing all of the main functionalities that enable you to trade and manage your portfolio on your mobile device. Like the main platform, the app also combines social and manual trading capacities, and is quite intuitive to use. The charting software has limited capabilities (only a handful of the most commonly used studies), but other than that the app is robust and very intuitive to use.
The mobile trading app is free to download from the iTunes or Google Play Store.
4. eToro Alternatives (Social Trading)
eToro is one of the world’s largest social trading networks boasting over 5m users and allows it’s member to trade Forex, Stocks, Commodities and other instruments socially. While the social trading network has many fans, not everyone is a big fan of the social trading network. For those who want to try their hand at social trading but don’t want to use eToro there are a number of other companies and brokerages which offer their own social trading products. In this article we look at some of the main competitors to the world’s largest social trading networks.
#1 Rated Alternative: ZuluTrade
ZuluTrade is probably eToro’s main competitor and has established itself as one of the biggest names in the world of social trading. ZuluTrade boasts a huge number of Signal Providers which users can opt to follow with the social trading network having made it very easy for traders to become signal providers. This can make it difficult to decide who to follow, with some complaining that ZuluTrade’s ranking algorithm fails to pick out the best traders meaning that traders have to manually determine who is worth following. Thankfully, registered users are able to download traders full trading history which allows users to perform a full analysis of a traders strategy, allowing them to see whether they are worth coping.
One of the biggest benefits of ZuluTrade over eToro, is that the service is brokerage independent which means users can choose from a wide range of different brokerage firms. This allows traders to hunt out the most competitive spreads and best execution. Though many ZuluTrade users ultimately opt for ZuluTrade’s integrated brokerage AAAFx as users often find that the Athens based brokerage offers them the best overall execution.
Those interested in ZuluTrade can try out a fully functioning demo account for a 30 day period.
You are welcomed to read our full analysis of Zulutrade VS eToro here.
While not as well known as some of the other social trading networks, MyDigiTrade may be a good option for those looking for an alternative to eToro. The platform is quite similar to ZuluTrade in the sense that traders can choose from a wide range of signal providers, with it also being possible for users to easily become a signal provider themselves. Again, MyDigiTrade uses an algorithm to rank the quality of the signal providers on the platform. It should be noted that this algorithm doesn’t always do a great job at recognising which traders are the best for users to follow. It is possible to overcome this by using custom filtering and carefully analysing the past performance of the signal providers on the platform, though traders should be aware that Forex trading is inherently risky.
It is possible to choose from a range of different brokerages to use with the MyDigiTrade service, with the company currently supporting a total of 16 different brokerages including well known regulated firms such as FXCM, XM.com and IronFX. This will appeal to those who are looking to take advantage of tighter spreads than are on offer through eToro.
Again those interested in this eToro alternative, can try out a free demo account.
Currensee is an upmarket alternative to eToro, with this copy/social trading product only be available to those with a significant sum of money to invest. Those who want to use this premium service are required to deposit a minimum of $10,000. Currensee differs from the other networks in one crucial respect, the network heavily vets who can provide signals to the users of the service. This means that there are only around 20-30 signal providers to choose from at any one time, but they have all had to go through Currensee’s tough vetting process.
One thing that puts many people off Currensee is the payment structure, clients are charged a flat 2% management on the funds under management and a 25% success fee on any profits made. Part of this success fee is paid to the signal providers for the provision of their services, but such a payment structure is likely to put off a significant number of traders. You can choose a number of different brokerages to trade with.
Those looking for an upmarket and highly vetted signal provision service may take some time to consider Currensee as an option. For the majority of retail traders the initial outlay will likely be too much especially since the company doesn’t offer demo accounts to potential customers.
The amount of hype surrounding social trading has led to a number of different networks and brokerages offering their own products. We can’t cover them all in full detail here, but here are some of the other products which are worth a mention:
- Ayondo: While not very well known this German based social trading network, offers a similar service to eToro in many ways. Ayondo allows traders to begin social trading with as little as $100, and uses Gekko Markets as it’s liquidity provider. Full Review Here.
- FxCopy: Is a social trading network run by Vantage FX and the other brokerages owned by the same group. Despite this network being owned by a brokerage traders using other brokerages can also take part with a number of regulated brokerages being supported. Full Review Here.
- ForexGlobes: Another independent network launched with the goal offering superior execution to those engaging in social traders. The network currently supports a number of brokerages and those interested can try out a free demo account. Full Review Here.
- Tradency: Tradency is not a social trading network in the traditional sense, rather a software which is offered by a number of brokerages. The platform allows traders to engage in copy trading, while also operating as a fully functional trading platform. Full Review Here.
- Tradeo: Tradeo was brokerage independent social trading network, but it was recently taken over by YouTrade Capital Markets Pty – the ASIC regulated branch of YouTrade FX. You can find our full review here.
Conclusion – Review Summary
Our comprehensive research about eToro yielded nothing but excellent feedback with every single aspect we have tested. Whether you want to use eToro as a forex/CFD brokerage using the eToro Webtrader or mobile trader, follow successful traders and copy them on the eToro
OpenBook (now just named etoro.com), or become a guru yourself on the Popular Investor Program, you should be rest assured you are getting to a top-notch, highly reliable firm.
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* All trading involves risk. Only risk capital you’re prepared to lose.
* Past performance does not guarantee future results.
*This post is not investment advice.