eToro Review: Regulations, Reputation, Pros, Cons
When looking for a trader that permits cryptocurrencies trading, you’re likely to come across eToro sooner than later. The reason being, eToro is a top online brokerage for Forex, CFDs, ETFs, stocks, and cryptocurrencies in the world. But is it legit?
Today, we present you with a comprehensive review of this brokerage company, including its background, goals, customer support, and more. We aim to help you perceive a clear picture of the trading platform and, as such, make an informed decision.
Let’s dive in.
eToro Review: Background
eToro was first launched in Israel in 2007 under the name RetailFx. The platform was the work of three entrepreneurs who sought to make trading more accessible for everyone while reducing traders’ dependency on traditional financial institutions.
eToro began as an online platform with an intuitive interface. The interface featured graphs to represent financial instruments.
The eToro Trading Timeline
In 2009, the broker’s platform launched the WebTrader – the eToro platform with a wide range of professional tools for the everyday user.
In 2010/2011, eToro went through a significant update, including the launch of its famous copy trading platform.
In 2012, the company added stocks to its assets, such as commodities and currencies.
Initially, the platform was intended to be a forex trader, but the company introduced the option to trade stocks CFDs (explained in a later section) in 2013. Simultaneously, eToro launched the mobile app for Apple and Android systems. In addition, they dipped into cryptocurrencies, enabling users to trade Bitcoin through CFDs (Contract For Difference).
In 2015, eToro updated the interface to provide a more intuitive experience.
In 2016, they added CopyPortfolio – managed portfolios that buddle top traders or assets within a marketing strategy.
In 2017, they added support for cryptocurrency trading, which began with popular cryptocurrencies, such as XRP, Litecoin, and Ethereum.
In 2019, the brokerage launched eToroX, a full crypto to crypto exchange.
What eToro Offers Today
Today, eToro is known for stocks, commodities, Forex, CFDs with this provider, and cryptocurrency trading. The platform is easy to use. Its provision for copy trading makes it ideal for users interested in being copied for risk-controlled reasons.
Thus far, eToro USA, LLC has facilitated millions of trades thanks to its global reach. The company has registered subsidiaries in the UK, Australia, Cyprus, and the United States. It’s also focusing on entering the Asian markets soon.
But while most eToro’s trading services are allowed in many countries, there’s a significant number of countries that are banned from using the platform. They include Albania, Cuba, Canada, Iran, Iraq, Japan, Jamaica, Nicaragua, Syria, Serbia, and Pakistan.
So the background of eToro USA, LLC is quite enticing, but is the service legitimate?
eToro Review: Regulations, Reviews, and Reputation
To operate legally, an online broker requires permissions and licenses for each jurisdiction it avails its services.
In its case, eToro has secured a license from the FCA (Financial Conduct Authority) for its United Kingdon based subsidiaries. It has also acquired approval from the CySEC (Cyprus Securities and Exchange Commission) to covers its Cyprus-based users. Added to that is a license from the ASIC (Australian Securities and Investment Commission) covering Australian-based traders.
In addition, eToro has an FSCA license to provide regulations for its South Africa-based users, as well as other licenses, such as FinCEN from several American states.
In short, eToro and eToro wallet is well regulated by top financial authorities, making it safe and trustable with funds, personal information, social trading, and stock trading.
Which Accounts Lose Money, Have a High Risk of Losing Money, and Which Retail Investor Accounts Lose Money?
eToro trading, trading forex, cryptocurrencies, and CFDs are complex instruments and come with a high risk of losing. (According to eToro, 67% of retail investor accounts lose money when trading CFDs with the platform.) Retail investor accounts lose money when trading CFDs with this provider at times because, at the end of the day, CFDs are complex instruments and come with a high risk of losing money.
Besides, the purchase of real/crypto assets, like Bitcoin Cash, Ethereum Classic, and other crypto assets is an unregulated service thus far. As such, before choosing any provider you should consider the necessary precautions to protect yourself and your money while trading CFDs and making sure you understand how CFDs work, stock trading, and using eToro.
Reviews and Reputation
Besides regulation, a good reason to use eToro is that it’s well endorsed by most users across the globe – and understandably so. For one, that people trading eToro can feel secure since it takes precautions to safeguard its clients’ account, funds, and personal data. Traditional funds remain safe and secure in banks of the top tier. While some instruments have a high risk of losing, your money is safe through the eToro mobile app.
eToro is a provider you should consider because it’s also easy to use and intuitive, making it suitable for both beginners and veteran traders. The platform provides users with numerous tools to help them make responsible decisions. The tools cover all experience levels while providing guidance and risk management features for the initial steps.
The bottom line is, eToro is a reputable trading platform and their mobile app is top-notch. Besides, its parent company is large and well established, which adds to the trust.
Note, there have been complaints about their customer support system as being slow and less helpful. Nonetheless, the broker prides itself on resolving issues as seamlessly as possible. That means it may take time for them to get to your complaint ticket, but once they do, they ensure your problem is resolved.
There has also been the issue of the platform tending to freeze often. It could be due to technical difficulties or server maintenance, but often, the freezing results from too many people using the platform at the same time.
With the legitimacy out of the question, let’s dive into the platform itself.
eToro Review: Trading Platforms
eToro is compatible with various devices, including Pcs, Macs, Androids, and iOS systems. The main trading platform is web-based software and is available in different languages: Arabic, Czech, Chinese, Dutch, Danish, French, Finnish, German, Malaysian, Italian, Norwegian, Portuguese, Polish, Russian, Romanian, Swedish, Spanish, Thai, and Vietnamese.
The web-based trading software is user-friendly, well-designed, and provides an option to do social trading.
eToro provides a built-in search function to ease the user’s exploratory journey. You can use the function to search for any products without any problems.
Making orders on through your trading account is fast and efficient. You can load your trading account with money via credit card or bank account. As such, you can make the following orders in a minute:
- Trailing Stop
Traders who want to make orders, launch the eToro Wallet and scroll to the Order Interface.
Making orders only takes a minute and is really easy. It’s appropriate for all investors whether your interested in investing in stocks, crypto trading, how to understand how CFDs work, or virtual trading platform. eToro is a multi-asset platform and because eToro is a multi-asset platform it becomes your one stop shop to buy and sell a variety of the different instruments.
The platform boasts a charting system that features numerous drawing tools and sixty-six (66) indicators. While the charting features lack a backtest function, eToro provides performance data from CopyTraders and CopyPortfolios.
Bear in mind that eToro has a phenomenal mobile app but does not offer a downloadable desktop platform yet; as such, all trading done on Macs and PCs are done through your eToro Wallet online.
eToro provides the mobile trading versions for iOS and Android systems to enable clients to sync seamlessly between devices. The menus are well organized; however, the customization is limited in charting features. There are only five types of charting features on the indicator menu.
Nonetheless, you can set custom price alerts as well as push alerts about market events and account issues.
eToro Review: Offers and Trading Tools
eToro strives to educate traders in addition to offering them a platform for investment.
Upon registration, eToro clients receive a demo account with $100,000 virtual money to work on their trading skills and strategies before investing real money.
The platform also offers multiple other tools to aid with actual trading. Such tools include:
eToro offers an economic calendar, where you can input the dates and timezone of choice and assets you trade. The economic calendar will then display how events in the set timezones are likely to impact your investments.
The platform provides market analyses that feature quick overviews and in-depth details about every tradable asset. As such, you can utilize as little or as much information as you want to inform your trading decisions.
The analyses are easily accessible, too, as every tradable asset is assigned its own webpage.
eToro boasts technical analysis tools that are supplemented by analysts’ recommendations. The tracker indicates the percentage of eToro users likely to buy or sell the asset. This can prevent you from losing money rapidly due to uneducated investments. Moreover, there are comments from analysts for popular assets.
Note, research is also accessible in a blog featuring numerous generic articles. However, this research is a tad disorganized, with the most detailed guides being crypto-based topics instead of Forex or market analysis. The mobile app does provide a research button, but the analyst research is only available for funded accounts.
The platform flaunts over 70 technical indicators and charts. This makes eToro appropriate for all investors.
Before you take the high-risk investment you can do your research and avoid losing money rapidly due to poorly researched positions. However, the charting tool indicates data up to 6 months, which can prove inadequate, especially when you take the high risk markets into account. They change rapidly due to leverage so it’s nice to have access to longer historical data.
Moreover, the data available consist of only the basic financial ratios. There are no historical records of price targets, income statements, balance sheets, or earnings estimates. This gives you some info on whether you should buy and sell but make sure to do further research before crypto trading, investing in stocks, before losing your money rapidly due to leverage unforeseen by inadequate research and preparation.
eToro News Link, direct users to a social forum that features posts from different users offers further indication of future results, and offers both investing tips and which accounts lose money by real users.
The said posts are real-time news/video streams from verified eToro users, providing more reliable feedback about the platform and indication of future results. The posts show users purchasing and selling in real-time, which provides fast sentiment analysis. Moreover, the user can customize and save their watch lists so you can consider whether you understand to buy and sell a certain instrument.
On the downside, the newsfeed is limited to comments and tweets from traders with the platform. It does not include major media outlets like Bloomberg or Reuters.
If you are still one to consider whether you understand what you’re doing, eToro’s educational materials consist of frequently asked questions (FAQs), video tutorials, and offers both investing tips and cautions, which most traders find useful. The education tools address eToro’s financial assets available, functionalities, trading fees, and related topics.
eToro features a link to the trading academy in the footer. There’s also a link for a Live Webinar at the bottom of the web interface.
It allows you to study and potentially copy the trades of more successful investors so you understand fully how to use eToro mobile.
As noted earlier, there’s a FAQ section and help databases that answer most of the common questions posed by traders. There’s also a YouTube library that provides tutorials containing how-to presentations.
Added to that is the platform’s social elements, such as CopyPortfolios. The ability to copy the trades and trading strategies of successful users in real-time is also innovative – and the same goes for the Popular Investor program.
CopyPortfolio is a product for traders’ portfolio management. See, there are numerous similarities between investments in a specific index and a mixture of assets being selected for the user.
Any investment made by a trader automatically copies other users or multiple markets with a similar predetermined investment strategy based on past performance of a fund or past performance of an individual asset.
The feature is available for traditional fiat trades and cryptocurrency trading. It features several cryptocurrency investments that deliver exposure to Bitcoin, Ethereum, and other cryptocurrencies.
As noted, it creates a single tradable asset that comprises skillfully selected traders or assets of predetermined strategy.
Copy trading is an innovative option that allows users to evaluate other traders’ track records and copy them – or mirror their trades.
Copy trading is available for both traditional fiat investments and cryptocurrency trading. With it, beginner and veteran traders can get exposure to the trading market without having to do much homework and research.
The copy trading feature is handy as trades can be copied at any scale. For instance, if you want to invest $10 000 but the trader you want to copy is investing $100,000, you can copy the trader at one-tenth of their original level.
eToro Review: Assets and Markets
With eToro, you can trade nearly any asset through one platform. The broker’s platform is a social trading network that combines user interactions and a modern trading system.
As noted in the background section, eToro was designed to disrupt the traditional banking system while beginning a digital financial era.
eToro enables traders to make investments in hundreds of securities and assets, including indices, currencies, stocks, commodities, and cryptocurrency. Each asset is traded following different investment strategies. As such, equity trading is unavailable.
While the platform’s assets portfolio is not the biggest, it is diverse enough to be deemed decent and satisfactory by most users.
eToro may not offer a large number of assets, but it’s a top-rated broker for cryptocurrency traders. It provides an extensive portfolio of cryptos, including:
- Bitcoin (BTC)
- Ethereum (ETH)
- Ripple (XRP)
- Bitcoin Cash (BCH)
- LiteCoin (LTC)
- Stellar Lumens
- Cardano (ADA)
- Ethereum Classic (ETC)
· Plus 85 more.
In fact, the eToro wallet app has over 120 supported cryptocurrencies. The secure digital wallet provides safe storing, buying, and receiving cryptocurrencies.
Disclaimer: trading cryptocurrencies is not currently regulated by any European Union and other regulatory frameworks.
eToro Review: Fees and Commissions
eToro features trading and non-trading fees.
Trading fees are costs incurred through trading. They include conversion fees, spreads, financing rates, and commissions.
Non-trading fees are costs incurred performing tasks with no direct relation to trading. They include withdrawal fees and inactivity fees.
Here’s a further breakdown of eToro fees for the most frequently traded financial instruments.
ETF fees and stock fees
eToro provides zero-commission stock and ETF trading for its EU users. And being a CDF broker, the platform enables users to trade with real stocks and ETFs when the leverage is set to one. For example:
5:1 for stock CFDs
20:1 for stock index CFDs
30:1 for Forex
Unfortunately, zero-commission trading is unavailable for users outside of the European Union.
ETF and stock fees are low – and the same goes for their spread. Spread equals the difference between the bid price and ask price. When the leverage position is set above one, the trading is with CFDs – which have a high risk of losing money. These accounts lose money due to the nature of the investment and poor research so make sure you understand how CFDs work before diving in.
Non-trading fees are often high as the user is charged $10 per month if they are inactive for 12 months. There is also a withdrawal fee of $5.
Cryptocurrency trading fee
It costs 5% (4% Simplex fee + 1% standard fee) to exchange fiat currency to cryptocurrency. While it costs 0.1% to convert cryptocurrency to cryptocurrency. This exchange requires a minimum of $20 and a maximum of $10,000 per transaction.
eToro offers a popular four-level investor program ranging from cadet to elite. Here, the trader may be eligible to receive trading perks, including monthly payments, spread rebates, and management fees. This approach differs from an active trader program that requires a volume threshold or deposit.
eToro provides a VIP club membership with five tiers ranging from gold to diamond. The diamond tier is for users with a constant balance of $5k to $250k.
The VIP account offers varying benefits depending on the tier. Such benefits include access to private signals and exclusive assets as well as a dedicated account manager.
eToro Review: Deposit and Withdrawal
eToro requires a minimum amount of initial deposit of $200 for an online banking transfer and $500 for a wire transfer. As a trader, you can only deposit up to $10,000 into your eToro account per day.
You can make deposits into the platform using the following options:
- Credit or Debit card
- Visa or Mastercard
- China Union Pay
The exchanges use Plaid, a third-party provider, to enable the client to open a new account with a direct connection to eToro. Note, a wire transfer requires some fees from the trader’s bank to be paid.
You can use the same option you used to deposit money into the eToro account to withdraw funds. The platform charges a $5 withdrawal fee. You can withdraw a minimum of $50. For more details on deposits and withdrawal fees, visit eToro’s fee page.
It is also worth noting that your account balance can decrease due to inactivity fees. For instance, if there have been no-trading activities for a year, you will be charged $10 each month. Fortunately, the eToro Club program provides traders with additional services and some discounts based on their account’s size.
Traders can connect with eToro via an online support forum. There, they can submit a ticket for various issues. eToro had availed a customer support line – however, most users claim that the calling option is no longer available.
There’s a separate customer service program through eToro partners.
As noted earlier, the customer reviews for eToro’s customer support are somewhat negative – primarily due to delayed responses.
Overall, submitting a complaint ticket is faster than reaching customer service directly. And you can rest assured that once your ticket is reached, they will do all they can to resolve your issues.
Just like any trading platform, eToro requires you to take several steps before you can begin trading. First, you will have to provide specific information. The account will then require verification with proof of government-issued identification, address, and a verified phone number.
Account verification can take up to two days. New users must prove their identity and residence by providing the following documents.
POI (proof of identity) document
Acceptable POI documents include passports, identification cards, and government-issued driver’s licenses.
POA (proof of address) document
The acceptable POA documents include:
- Bank statement
- Utility bills such as water, gas, or electricity
- Utility bill including gas, water, or electric
POIS (proof of identity and selfie) document
The photo must show you holding the POI document uploaded to the exchange.
Once the verification is done, you can now use the account to trade.
Users reports online banking as the easiest way to make deposits. Plaid, the third-party provider, enables clients to open a new account with a direct connection to eToro.
eToro Review: Pros
- Free stocks and ETFs trading for EU-based clients
- Good portfolio of popular cryptocurrencies
- Good social trading experience
- Offers additional investments products
- Intuitive user interface
- Accepts deposits and withdrawals using multiple payments options
- Easy to open a new account
eToro Review: Cons
- Withdrawals are slow and costly
- The forex fees are high
- Withdrawals are only available in fiat currency
- The base currency is only usable for one account
eToro Review: The Verdict
Overall, eToro is a user-first trading company that has raised enough venture capital to ensure the broker meets its traders’ growing needs. eToro is suitable for anyone investing in cryptocurrency or interested in trading.
Everything from the CopyTrader features to the open-market cryptocurrency exchange is intuitive. CopyPortfolios, as well as various graphs, give the platform a nice edge.
eToro is ideal for beginners, intermediates, and veterans due to its high intuitive nature and resourceful education materials.
eToro is not ideal for trading unpopular cryptocurrencies. However, it provides good options for users interested in using a single platform for fiat and major cryptocurrency trades.
eToro is a reliable platform for trading Forex & regular stocks as well as investing in pre-built portfolios or various industries. It enables users to buy and directly hold cryptos assets.
Withdrawals and deposits are processed accurately and reliably to ensure that all funds remain safe and secure.
The platform has been proven to be trustworthy for many years now. It’s not a wonder that many eToro reviews recommend trying out the broker.
However, you can send cryptos to eToro Wallet
In addition, seeing that eToro is geared towards social media and social trading, it’s likely that as more users enroll, the experienced traders will be open to having their strategies copied. That will, in turn, help them have a better social media reputation and, as a result, gain rewards from the Popular Investor program.
Please note, before choosing any trading mobile app make sure to do research regarding their EU regulatory framework and if they are supervised by any EU entity. The EU regulatory framework will show how they do business and if they are supervised by any EU authority in addition to US regulations.
Please note that investing as well as trading is something that comes with risks, make sure you can afford to take risks. Make sure any money you invest you can afford to take a hit on. If you’re planning on investing in stock as well as trading other instruments like options and crypto make sure you do your research before putting your money into them.