eToro Review – the largest social trading network

In this comprehensive eToro Review we would cover all the information you need to know completely about it. eToro is a social trading platform which was founded in 2007. The head office is located in Cyprus. It also has offices in Israel and the UK. eToro claims to have around five million users, active in 140 countries. This makes eToro one of the leading social trading platforms worldwide.

In social trading traders follow the strategies of other traders and can copy them. Beside crypto currencies eToro offers foreign exchange, indices, commodities and stocks ETFs and as underlying instruments.

Advantages of eToro

  • Large community - around five million users
  • Copy positions with just one click
  • Direct communication with other traders via news feeds
  • Trade shares commission-free
  • Trading crypto currencies

How does eToro work?

Registering with eToro is easy and free of charge. All you need is first and last name, a username, email address, phone number and a password. If you have a Facebook or Google account, you can also log in via this account.

Now you can search for other traders you want to follow. There is also a free demo account available, with which you can test social trading under real conditions – but without using real money! If you prefer to invest directly in e.g. crypto currencies or stocks without following another trader, this is also possible.

The first time you trade with real money, a minimum deposit of 200 Euros is required. At the latest, however, as soon as you want to withdraw money from your account, further data is required to verify your identity. For example, a copy of your identity card is required (front and back, coloured) and confirmation of your telephone number.

62% of private investor accounts lose money when trading CFDs with this provider

How does social trading work with eToro?

What is Copy Trading?

In copy trading, you copy the open positions of another trader. The whole thing works with a single click. Top investors are displayed. You can see the past development of the positions, the risk level and statistics. Direct communication via news feeds is also possible.

If the trader you copy makes a profit, you make a profit too. The same goes for losses, of course. If you no longer want to copy a trader, you can end the process at any time. CFDs on crypto currencies as well as on foreign exchange, indices, commodities, shares and ETFs and can be traded.

Trading with leverage is also possible. Leverage is max. 1:30 for currencies and max. 1:10 for commodities and sub-indices.

What are CopyPortfolios?

CopyPortfolios is another service that eToro offers that you can use as a trader. At eToro you have the possibility to invest in three types of CopyPortfolios:

  • The Top Trader CopyPortfolios are made up of the positions of the traders.
  • The Market CopyPortfolios invest in equity CFDs, commodities or ETFs.
  • The Partner CopyPortfolios are developed in cooperation with TipRanks, the robo consultant WeSave and the investment company Meitav Dash.
eToro Review

What are the opportunities and risks?

Social trading at eToro offers you some opportunities, but it also has risks.

One of the opportunities: If you have little or no experience with securities trading you can use eToro to get familiar with the subject. Watching other traders helps to understand trading.

The community also offers plenty of room for exchange and questions. Traders can communicate directly with each other via news feeds. This makes it even easier to understand what the other trader is doing and why.

Copying the open positions of other traders is also extremely uncomplicated. If the copied trader makes a profit, you make it yourself.

However, this applies vice versa as well. And this brings us to the risks. Whether the trader you are copying really knows what he is doing is not guaranteed. If he loses, you lose as well. As with other forms of securities trading, profits are therefore by no means guaranteed. The money in your account can also be completely lost.

And you should also be aware of this: a position that has made a profit in the past will not necessarily make a profit in the future. Price developments cannot be predicted – even by experienced traders.

62% of private investor accounts lose money when trading CFDs with this provider

How does investing in markets like crypto currencies and stocks work with eToro

CFDs are always used in social trading. For example, one does not invest directly in a share, but in a share CFD. In addition to social trading eToro also offers the possibility to invest directly in crypto currencies, but also in securities such as stocks and ETFs. Leverage is not offered in these cases. The markets that can be traded directly include

  • Crypto currencies
  • Shares
  • ETFs

How does trading cryptocurrencies work with eToro?

eToro Review

Cryptocurrencies can be traded at eToro via a CryptoPortfolio. On the other hand direct investments in cryptocurrencies are also possible. Even trading cryptocurrencies requires only a few clicks. They can be found in the personal area under “Markets” and then “Crypto”. The selection is constantly updated. Among others, these cryptocurrencies can be traded:

62% of retail investor accounts lose money when trading CFDs with this provider

What are the costs with eToro?

There are no costs for registering with eToro.

There are also no fees when opening a position. When a position is closed there is a fee which is included in the spread. When trading ETFs for example, the spread is a uniform 0.09 percent per page.

For crypto-currencies in which investments are made directly (i.e. without leverage), the principle also applies: no fees when buying, when selling the fee is included in the spread. For crypto-CFDs (i.e. leveraged products), there are also fees when buying in the form of spreads. In addition, eToro charges a crypto transfer fee when paying out crypto currencies. Thus, the minimum payout amount at Ethereum is 0.3 Ethereum and a fee of 0.006 units is charged.

No fee is charged when depositing funds. On the other hand, there is a $10 fee when withdrawing. The minimum payout amount is 50 Euros.

In addition, when depositing in euros, a conversion fee is charged for converting the credit balance into US dollars. When you withdraw, the same fee is charged again for the conversion of US dollars into euros.

Those who have not registered for more than 12 months also pay an inactivity fee of 10 US dollars per month. However, this fee is only due if there are funds in the account.

The minimum deposit at the beginning is 200 Euro.

What about regulation and other safeguards?

eToro has its headquarters in Cyprus. It is regulated by the Cyprus Securities & Exchange Commission (CySEC).

Deposits are subject to Cyprus’ statutory deposit insurance. This is 20,000 Euro.

As additional protection eToro also offers a copy stop loss function. This allows you to set the maximum amount of loss you want to accept. Once the threshold is reached, the position is closed automatically. So you don’t have to watch a position all the time.

So eToro fulfills the basic requirements for a reputable provider, but doesn’t go beyond that either.

eToro Review Conclusion

eToro is one of the leading social trading platforms worldwide. This means that one requirement is already fulfilled which is important for social trading: a large and lively community. The offer is exciting for beginners who have little experience with securities trading and would like to exchange ideas with others. However, they must not forget that even (supposed) experts cannot predict the development of prices.

Even advanced traders and people who like to speculate in an uncomplicated way are right at eToro. What’s a bit annoying is that apart from the fees in the widened spread there are also fees on payout and even conversion fees. The deposit protection could also be higher.

But eToro is not only aimed at social traders. It can also invest directly in over 1,000 stocks, ETFs and even crypto currencies like Bitcoin and Ethereum. There is no commission for stock trading, which makes it attractive despite the small number of stocks.

62% of private investor accounts lose money when trading CFDs with this provider

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