Category : Investing
If you are looking to trade forex or searching how to trade forex online, you’ve probably heard about eToro. The company was launched in Tel Aviv in 2006 and is often described as a social trading investment network. The company was founded by two brothers Yoni Assia and Ronen Assia along with David Ring under the name RetailFX. Their goal was to build a financial trading platform that catered for everyone.
This goal has been achieved since the eToro platform makes it easy for traders to interact and learn from each other. Successful traders are rewarded while inexperienced traders have the opportunity to learn from their more experienced peers.
eToro is one of the few brokers that have continued to innovate and improve upon its products attracting traders from all over the world. It’s also one of the largest online trading platforms offering their services to over 5 million traders from over
170 different countries.
The company has been recognized for their innovative products and awarded several prizes. The latest awards came in 2013 when they were recognized as the platform offering game changing technologies across Europe during the FinTech 50 awards. In the same year, eToro was recognized as the Best Trading Platform in the Star Awards.
EToro headquarters and offices
EToro has two main offices operating in Europe.
Their Cyprus office is located at on the 7th floor of the Kanika International Business Center. The building is located at 4 Profiti Ilia Street, Germasogeia in Limassol Cyprus. Traders can reach their Cyprus office through (+357) 25 030 234.
Their UK office is located on the 42nd floor of the One Canada Square Canary Warf E14 5AB in London. UK traders can contact the UK customer service team through +44 02031500308.
EToro also has a broker office to cater for Australia and New Zealand traders. It’s located in the Level 10, 2 Bligh Street in Sydney. You can call their office through +61 1800 778 583.
Besides these three offices, eToro is also present in Israel and the USA.
EToro regulation and compensation scheme offered
This broker is fully regulated by several financial authorities. This allows them to offer their services to investors from different countries across the globe.
In Europe, eToro is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC). Their license number is 109/10.
In the UK, the company is regulated by the Financial Conduct Authority (FCA). Their reference number is 583263.
EToro Europe (Cyprus subsidiary) and eToro UK complies with the Markets in Financial Instruments Directive (MiFID). This is a European law which requires brokers and other financial services institutions to offer protection to their clients. This means eToro is obligated to safeguard client assets, offer the best execution and order handling services and compensate investors.
EToro Europe is a member of the Investor Compensation Fund which makes its client eligible for compensation not exceeding 20000 Euros. EToro UK on the other hand is a member of the Financial Services Compensation Scheme (FSCS). This makes eToro clients eligible for compensation not exceeding 50000 Pounds per person. However, traders dealing with cryptocurrencies aren’t eligible for compensation.
In addition, in order to ensure clients fund safety, eToro keeps all client funds in separate tier 1 bank accounts.
In the USA, eToro is regulated by the Commodity Futures Trading Commission (CFTC) and is a member of the National Futures Association under ID number 0382918. Despite being regulated in the USA, eToro doesn’t currently offer their services to US citizens yet.
What makes eToro unique among online brokers?
With more new brokers entering the market, the one that attracts the most traders needs to offer more than just a trading platform. They need to offer trader friendly tools, features and other resources to increase chances of their client’s profitability. EToro has continued to invest in new and unique features which make them stand out. They include the following.
Learn from successful traders
On most platforms new traders are left to trade based on their knowledge and the little information they find online. This requires time and a lot of financial resources. This is probably the leading reason why majority of traders incur losses.
EToro allows you to dedicate little time learning by yourself by allowing you to benefit from successful traders knowledge. You can simply copy another trader’s strategy and moves to make a profit. This has been enabled through 3 different social trading features.
1. The CopyTrader
allows you to attach your funds to a successful investor’s portfolio. By syncing your account with another trader’s portfolio, every trade they make on their account is
mirrored on yours. As the trader transacts and makes profit, so will you. This feature also makes it easy to identify successful traders by viewing their track record.
2. The CopyFunds
is a financial instrument which you can trade on. It groups a handful of top eToro traders together into a unified fund. The fund is highly optimized allowing you to constantly profit from trading it.
3. The popular investor program
Is designed to allow successful traders earn additional income for sharing their
tips and strategies. Traders who join this program and gain a following of other traders are rewarded each month based on their success ratio. Successful traders earn a 2% management fee as well as a 100% spread rebate.
If you want to keep track of a specific trader, all that you need to do is click on the follow button that appears when you’re viewing their profile. Top traders are also easily found via the Ranking Screen that appears on most pages of the platform. You can also strike a discussion by commenting on a particular trade.
Trader friendly learning resources
The eToro trading academy is a large online learning resource that offers high quality learning materials for traders of varying experience. The academy hosts a unique financial trading eCourse that will help you get started trading within a short amount of time. The eCourse is designed such that even amateur traders can get started easily.
The academy also hosts tons of trading videos which will teach you more about the platform as well as the different strategies successful traders use. You can also sign up for the regularly held live webinars which offer you exclusive trading information.
Other learning resources you’ll find on the eToro platform include a regularly updated blog and a very detailed FAQ section.
Diverse range of instruments to choose from
Every trader will agree that trading several assets will help to minimize risk on their investment. However, everyone has their own preferences as far as tradable instruments go. Etoro offers a wide range of instruments to choose from. These are drawn from 6 different asset classes which you’ll learn more about later in this regulated broker review. The tradable instruments available through eToro are also
regularly updated which makes it easier for traders to build and diversify their portfolio.
Easily accessible trader friendly platform
Most brokers heavily rely on third party trading platforms such as the MT4. This dependence can easily affect the broker’s accessibility. EToro on the other hand has heavily invested in their unique platform popularly known as the eToro OpenBook. This platform is designed with social interaction in mind. Besides trading, the platform enables you find and copy fellow traders. It also makes it easy to join and engage in conversations with fellow traders.
The platform comes in a simple and attractive design. The user-friendly user interface has intuitively placed buttons and controls which makes it easy to learn within a short amount of time. The user interface also only shows the tools you’ll need in order to enter and exit trades. This lack of a cluttered interface makes it easy to identify potentially profitable trades and enter position regardless of whether you’re using a mobile device or a computer. Accessibility is further enhanced by the platforms support for over 15 international languages.
If you prefer to trade while on the move, eToro also offers an iOS and Android app. The eToro Mobile Trader includes dozens of features that you could expect to find on the browser version only.
Another thing that makes the platform unique is the ability to directly search other traders and assets through the provided search bar. There’s also an advanced search feature which allows you to narrow down your search to a specific financial instrument with just a few clicks.
The eToro platform is also quite fast and responsive. You won’t have to worry about missing out on a trade simply because the platform momentarily became non-responsive.
Earn additional income by referring friends
As a social trading platform, eToro encourages traders to interact with each other. Other than copying successful traders and profiting from their knowledge, you can also earn $20 for each friend you refer to the platform. The process is quite simple. All you need to do is log into your trading account enter your friends Email account and invite them. Once they accept the invitation and sign up, your account will be
credited with $20. In addition, your friends will also be rewarded with $20 upon signing up.
Traders can now own cryptocurrencies
Cryptocurrencies are the hottest asset to own today. Many of the popular cryptocurrencies have seen their value grow over the past year. Currently, eToro offers Bitcoin, Etherum, Ripple, Dash, Etherum Classic and Litecoin to traders. While most other brokers will only offer cryptocurrency CFDs, traders who have invested in a cryptocurrency position since September 3, 2017, now own the underlying asset. This gives you the chance to profit on the current rising crypto price movements.
Easily accessible customer support
Traders in need of support and answers can contact the company’s customer service team via email or chat. Their support team is available 24 hours Monday through to Friday. The company seems to have invested a lot on online support since there’s no phone number provided on their main site. However, the fast response provided by their support team makes up for this.
EToro virtual account for practice
If you want to learn how to use the platform without necessarily opening a real account, eToro provides a virtual account that’s credited with $100,000. It looks and works the same way as a real trading account. This will ensure that you’re completely comfortable trading on the eToro platform when you open a real trading account.
Assets traded on eToro
EToro offers 6 different asset classes. These include stocks, ETFs (59), cryptocurrencies (7), currency pairs (47), indices (12) and commodities (6). If you wish to trade stocks, eToro enables you to search for them based on the industry or the exchange on which they’re traded. This makes it easy to find your preferred stock through several clicks.
Depositing and withdrawing funds from your eToro account
To start trading you’ll need to fund your account. This broker accepts various payment methods that include bank wire transfer, credit and debit card, Neteller, Skrill, WebMoney and Yandex.
However, the payment method you’ll use to fund your account will largely be
determined by your country of residence. For example, Yandex payments are
limited to Russian citizens only. The amount of time it will take for your deposit to reflect on your account will range from a few seconds to 5 business days.
The minimum amount you can deposit in your account for the first time is $50. Depending on the payment method, you can deposit as much as $50000 after the initial deposit.
Withdrawals are made to the account you used to fund your account. However, priority is given to credit card and PayPal over other methods like bank transfer. The minimum you can withdraw is $50 and you can w your entire account balance minus the margin. Once your withdrawal request is approved, it will take between 1 and 5 working days for the amount to reflect in your account. Every withdrawal will attract a small fee. This is calculated at the time of placing your withdrawal request.
EToro Pros and Cons
- Social trading features allow you to interact, follow and copy other traders
- Simple, easily accessible trading platform allows you to trade from anywhere
- CySEC and FCA forex regulated broker means your funds are secure and insured so you’ll be compensated if eToro is liquidated
- Wide selection of tradable instruments makes it easy to build and diversify your portfolio
- Successful traders are rewarded popular investor program allowing them to make more money each month
- New traders can easily start profiting by copying top traders and utilizing the different learning resources available on the platform
- EToro charges spreads, margins and fees which can greatly minimize your earnings
- Even after launching eToro USA, the company is yet to offer its services to clients residing in the US
EToro is one of the few forex regulated brokers that have managed to strive and attract millions of traders. The company has continued to grow and innovate focusing on trader needs. It has managed to distinguish itself as a social platform where traders meet and profit together. The social aspect adds variety and is a change from the old school standard brokers. In addition to that, the platform and the community makes eToro very beginner friendly. With regard to gaining traders trust, eToro is one of the few brokers that are regulated by two of the big European regulators as well as the CFTC. Overall, if you’re a new or experienced trader interested in copy and /or social trading where it’s easy to earn profits, eToro is probably the best option for you.