eToro has always been a beginner’s consideration due to its copy trading feature. Many people start their crypto trading experience from the platform, but is it really that good? If you are considering using the platform, you might be wondering if it’s truly worth your while. What sets eToro apart from other trading platforms, and is it the right option for your specific needs?
To help you make an informed decision, we have covered a detailed eToro review in this article, including its features, fees, community reputation, and pros & cons. Moreover, we have also shared some other alternative trading platforms too.
So, without further ado, Let’s get started!
eToro Overview
eToro is an Israel-based trading platform for various exchanges like crypto, stocks, forex, Contract for Difference (CFD), and Exchange-Traded Funds (ETF) assets. It was founded in 2007 and now has become a platform with more than 2.7 million active users. You can download its application from Play Store and App Store for better usability.
eToro platform mostly encourages copy trading between beginners and veteran users. Consider it as a social media for investors and traders, where they can make trades as well as engage with the finance community without leaving the app. So, if you are stuck or confused about something, you can ask the community and get various ideas in no time.
eToro Regulations & Security
eToro is a trusted platform that operates in different countries according to their regional and provincial jurisdictions. The Financial Conduct Authority (FCA) and Cyprus Securities Exchange Commission (CySEC) regulate and license eToro’s operations in the UK and Europe, respectively. They protect the customers under the EU’s Markets in Financial Instruments Directive (MiFID).
The US Securities & Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) regulate it in the USA. While in Australia, it is regulated by the Australian Securities and Investments Commission (ASIC).
As far as user security is concerned, the platform offers two-factor authentication for maximum protection. Moreover, many top security providers support and provide industrial standard web solutions to prevent cyber attacks. eToro also utilizes both warm and cold storage wallets to create multi-layer protection for your crypto assets and monitor malicious activities via advanced tools.
Also, different firms provide insurance to the platform. For instance, the Securities Investor Protection Corporation (SIPC) protects securities up to $500,000, and APEX provides insurance up to $37.5 million ($900,000 per person in cash).
Availability
eToro is available in more than 140 countries, including many European countries, Australia, Central Asia, and South American countries. Although eToro operates in the USA, it doesn’t support crypto services in some states, that are:
- American Samoa
- Guam
- Hawaii
- Minnesota
- Nevada
- Puerto Rico
It was also not available in New York, but due to its recent licensing with the New York State Department of Financial Services (NYDFS), you can trade crypto there. The NYDFS approved the eToro NY LLC application under BitLicense on Feb 21, 2023.
eToro Features
Spot & Futures Trading
eToro offers you spot trading, where you can buy or sell assets in real-time at their current market rates. With such a trading method, you can profit from short-term price hikes, which are most suitable for active traders.
eToro makes the process easier by charging minimal fees on continuous trades. They don’t charge any commission, and the easy account access from their mobile applications makes the platform a great solution.
Efficient future trading also makes eToro an excellent option, where traders can get greater investment rewards. This method allows users to exchange commodities or financial instruments at a predetermined price and date in the future. eToro assists traders in speculating on the direction of prices for commodities, stocks, indices, currencies, and other assets in the financial markets.
Copy Trading
eToro is particularly famous for its copy trading feature. It’s an investment strategy that allows investors to copy the trades of experienced, successful traders to start making profits. The technique is increasingly popular among newer and less experienced investors, which helps them replicate successful traders and benefit from their understanding of financial markets.
eToro enhances the copy trading technique by allowing users to view other people’s portfolios through its CopyTrader. Just like social media, you can engage with others’ portfolios by observing, commenting, and copying their strategies to implement them on yours.
CopyTrader tracks what these traders do and automatically applies their strategies to your account, exposing you to various markets without prior knowledge or experience.
Other Supported Trading Styles
Besides the above three strategies, eToro offers other trading options suitable for different investors and traders. For example, you can try day trading, buying and selling the same stock, cryptocurrency, or any exchange within the same day.
It also offers CFD trading, where traders can speculate on the price movements of various financial instruments. It includes fiat and cryptocurrencies, stocks, indices, and commodities without owning the underlying asset. Overall, you get more than 2000 stocks, 250+ EFTs, and 30+ popular crypto coins.
But that’s not all! You can try options trading, cash management, risk management, and fractional share investing for different profitable strategies. Moreover, eToro also has Smart Portfolios, portfolios that eToro’s experts and partners create and manage, with greater profits.
Low Trading Fees
Apart from different trading options, eToro is also a favorite for beginners because of its low trading fees. In stock exchanges, the platform hasn’t charged any additional fees in any country since May 2020. Also, eToro doesn’t charge any commission on US stock trades in Australia.
On the other hand, the platform charges a minimal fee while trading CFDs and Forex, which depends on the traded stock or asset. It also doesn’t charge any fees on Options and ETFs. Furthermore, there is no withdrawal fee, but there is a $30 withdrawal minimum. The platform also charges a $75 transfer fee when transferring accounts elsewhere.
In the case of crypto trades, eToro charges 1% of the transaction fees. It also supports staking but keeps a fractional percentage of rewards as commission. In contrast, if you are inactive for over a year, it will deduct $10/month (which will stop once you log in again).
However, their low trading fees aren’t enough to make a profit. So, they make money through the maker-taker fee model. In this model, the makers add liquidity by purchasing orders at a low cost, while the takers remove liquidity by selling orders at a high price. Usually, the makers are charged 0.16% of the limit order, while takers pay 0.26% of the market order.
In-Depth Charts
Another feature that makes eToro brilliant for newcomers is its in-depth charting system, ProChart. The software provides stats, trends, and detailed information about the exchanges in line, pie, bar, and candle charts. It uses multiple sources to gather real-time information to present instant market changes.
The feature also offers useful tools for analyzing market trends, tracking data points, and more. Users can customize their technical indicators to further refine their analysis, like filtering searched trends according to time and price variations. However, it doesn’t support a significant metric, volume analysis, which is mostly required by traders to understand the potential of a moving trend.
Customer Support
eToro offers a help center with FAQ articles addressing a wide range of potential inquiries. But apart from this, the platform’s customer care support is limited. You can only contact the team from the ticket system accessible through the website. To submit a ticket for your complaint or query, click on the Customer Service page, and describe your issue in detail. You will get an answer within a few hours to a couple of days, based on the issue’s complexity.
The platform also supports live chat, email, and phone call options, but it is only available to Club members at the silver level and above. You can enter the Club by having $5,000+ in equity in your account.
eToro Pros & Cons
Pros
- Supports many trading options & symbols
- Can copy expert strategies
- Free stock and ETF trading
- Large community support
- Easy to use
- Low transaction fees
Cons
- It is not available in many countries, and some US states
- CFDs and Forex trading fees are comparatively higher
- Limited customer support
- Lack of advanced trading features, tools, and research
Is eToro Safe?
Yes, eToro is safe to use as it has been in the market for over a long time and is trusted by many reputable platforms. Two of its regulators are tier-1 platforms, which are considered the top security level. These include the Financial Conduct Authority (FCA) and the Australian Securities & Investment Commission (ASIC).
On the other hand, in case of a breach, these companies also provide investors protection. UK citizens can get up to £85,000 compensation from FSCS, while European users can get up to €20,000 protection from CySEC. However, the ASIC doesn’t provide a determined pre-set insurance to Australians. Outside these three regions, Lloyd’s provides securities to eToro private insurance customers of a maximum of $/£/€ 1 million for cash or CFDs.
eToro Alternatives
Although eToro is a great trading platform, you may also want to check out some other options for a better test and comparison. So, below is a short overview of the top four eToro alternatives, each with its own perks.
Binance
Binance is one of the famous crypto trading platforms that started operating in 2017. It is a leading crypto exchange that offers trades for numerous digital assets, like crypto coins, tokens, NFTs, DiFi, and other web 3.0 commodities. The platform provides users with secure transactions with low fees, fast deposits and withdrawals, and high liquidity for their trades.
Compared to eToro, Binance offers a wider selection of crypto tokens and coins for traders to diversify their portfolios. Moreover, it has even lower fees than eToro due to its native (BNB) coin. Lastly, Binance also offers margin trading, advanced charting tools for quicker decisions, and other helpful perks for experienced traders.
Coinbase
Coinbase was established in 2012 and was one of the few digital currency trading platforms at that time. Currently, it is among the best trading platforms (particularly for Bitcoin and Altcoins).
Coinbase is a great alternative to eToro because of its advanced security measures and the value it provides to veteran traders. The platform features various insightful market analysis tools, financial reporting options, essential charts, and valuable stats with real-time updating. And it supports more crypto coins than eToro.
MEXC
MEXC is a new entry in the crypto trading platforms promising security and trade efficiency. The platform has many innovative perks, like high liquidity, low transaction fees, and integrated risk management. MEXC utilizes sophisticated algorithms to increase transactions for traders and enhance encryption for security.
In contrast with eToro, MEXC has a simpler and more user-friendly interface, helping people easily understand and navigate (especially for beginners). Also, since MEXC doesn’t require Know Your Customer (KYC), you will experience less hassle in account creation than eToro. Moreover, the platform regularly organizes competitions with various exciting rewards.
Robinhood
Vladimir Tenev and Baiju Bhatt created Robinhood in 2013, which soon got traders’ attention and quickly became a popular platform. Today, more than 16 million people actively use Robinhood for different trading operations, like stocks, ETFs, crypto, etc.
It is better than eToro due to its commission-free investing and trading. Indeed, eToro offers commission-free trades, but they are liable for a few markets. In contrast, Robinhood doesn’t charge anything in many trades and exchanges. Moreover, eToro demands an initial deposit of $200 for account opening.
Conclusion
If you are new to trading and looking for a great platform to start, eToro will be a great pick. The platform is legit, as many tier-1 authorities are regulating it. eToro offers numerous trading options, with the most prominent one being copy trading. Its detailed charts will assist you in making profitable trades. On the other hand, their low fees make it affordable.
However, make sure your region falls under its operational territories. Also, remember you can only contact the support team via tickets (since the live chat is only available to Club members). Lastly, you can also try other platforms, like Binance, MEXC, Coinbase, and Robinhood.
FAQs
Is eToro Good for Beginners?
Yes, eToro is a great platform for beginners to start their investing and trading experience and learn about the market dynamics. The main reason is that it gives the newcomers a demo account with $100,000 virtual money to test the platform and understand trading complexities. It helps them to enter the main market more prepared and confidently.
Is eToro a Scam?
No, eToro has been operating since 2007 and is regulated by many high-level authorities, like ASIC, FCA, and CySEC. It indicates the platform is under strict observation and practices the best safety measures to protect and effectively organize its user’s data. Support of such organizations also provides a guarantee to the investors.
What are eToro Minimum Deposit Limits?
Overall, the minimum deposit limit is $50 ($10 in the US & UK), but the first deposit depends on your region. In some countries, it is $100 and $200 in others. However, in some European and Central Asian regions, people must deposit at least $1,000. But the highest is in Israel, $10,000. Otherwise, you can only deposit $500 minimum via bank transfers.
Can You Make Money on eToro?
Yes, it is possible, but you will require a high understanding to read the market dynamics and make timely decisions. If you can accurately analyze risks associated with different investments and develop strategies that can help you maximize returns, you can earn hefty from various trading options eToro offers.
