eToro is a broker that has a fresh approach to Forex trading than most of the other competing brokers in the industry. eToro has a flair for launching innovative products that are quick to catch on to the trader’s imagination. Way back in 2008, eToro launched one of the best platforms in the Forex trading industry that revolutionized the way trading works. The platform was a masterpiece that had a rich graphical interface and easy-to-understand trading terminal to enable amateur traders to learn the ropes of FX trading. Although the platform had several issues that led to immense criticism, the broker was lauded for its effort to create a feature-rich platform.
eToro is more commonly known today for its social trading platform, the CopyTrader, which essentially allows verified clients to copy trades from other successful eToro traders. Social trading is proving to be highly popular among retail as well as institutional investors, and eToro has one of the most advanced CopyTrading systems in the Forex markets. However, there are also a few downsides to choosing eToro, which will be discussed in this eToro review.
Official Website : eToro.com
eToro Regulation & The General Reliability Of The Broker
eToro is regulated by the CySEC and the FCA under its brand name, while the US branch of the broker is regulated by the CFTC under the trading name of Tradonomi LLC. The interesting part of the US eToro regulation is that the broker does not accept traders from the US, which is a very strange strategy. Upon deeper investigation, it is clear that the core services offered by eToro are in direct conflict with the CFTC and NFA rules regarding FX operations and carrying out Forex brokerage services in the US. Merely changing the leverage to 1:50 and preventing hedging capabilities are no longer considered as a valid change to do business in the US, and it seems that eToro is revamping its entire organization structure before they can start accepting US traders once again.
CySEC regulation guarantees eToro the ability to offer services in the EU under the MiFID derivative, and the FCA regulation guarantees unprecedented safety and security for client funds. Although the broker is regulated by some of the best regulators, it is still seen that there are a few instances of the broker manipulating prices and freezing the platform during volatile market conditions. Since eToro is a market maker, the broker has been suspected of taking opposite trades to their client’s positions, and there is indeed a direct conflict of interest between the broker and its clients. Nevertheless, FCA and CySEC regulation enables clients to approach the regulatory agency or the Financial Ombudsman regarding any issues and complaints that they might have related to the broker’s conduct.
EToro Offers A Trio Of Trading Platforms
eToro decided to make more than one platform available for clients, and offer a suite of online investment solutions that are flexible enough to suit most needs. It is claimed they are easy to use, and after experiencing them when writing this eToro Forex brokers review, we won’t be arguing. On offer are the following:
- eToro Openbook – This is the social trading platform for eToro, and can be used to follow and copy trades, as well as interact with other traders. Using this platform, it is easy to find other investors of interest, follow their trades and use the CopyTrader tool to automatically mimic their trading activity.
- eToro WebTrader – This is an all in one portfolio management platform, with lots of trading tools to help manage both manual and copy trading portfolios. The interface is smooth and easy to navigate, and includes charting software, and the option to view live rates, open positions and orders. WebTrader also allows users to edit stop loss and take profit orders, and manage their copy trading activity.
- eToro Mobile Trader – In today’s fast-paced world, it’s very much appreciated if there is a mobile option. With the eToro Mobile Trader app, it’s easy to participate in social trading using smartphones and mobile devices. The app is available for both Android and iOS, and is free to download. Wherever you might be, the eToro OpenBook app allows users to access live rates, open and close positions, edit stops, view charts and a whole lot more besides.
Standard Or Premium Accounts With EToro
Aside from the free demo account, there are two options for new trading clients. First, there is the standard account, with a minimum deposit requirement of only $50. eToro has a strict verification process, and new traders are advised to ensure this has been successfully completed, before embarking on their Forex trading journey. We came across a number of complaints online, from current clients regarding withdrawal of their funds. But also found that problems often occurred because the verification process hadn’t been completed. The terms and conditions on the site clearly state that this process has to be completed before withdrawing any funds. So it’s no surprise that these particular users couldn’t do what they wanted, and shouldn’t be held against the good name of eToro.
The eToro Premium Program is a relatively new addition for eToro, and requires a certain level of deposits and trading activity. To become a member of the eToro Premium Club, users must have a total new deposit of $20,000, within the previous 11 months. Having total equity of $20,000 at the end of a trading day will also entitle users to Premium Club membership. Premium status entitles traders to a special eToro Forex broker deposit bonus, direct access to eToros trading room, a personal account manager, unique promotional offers, free access to the Trading Central, weekly market analysis videos, a personal Payoneer credit card, and membership to the Neteller VIP program.
Let’s not forget to mention the free demo account, as this always a great way to get a good feel for the world of trading Forex, without risking any real money.
The Benefits Of EToro
- A popular social trading platform that connects users to thousands of other traders
- The OpenBook platform enables users to automate their trading by copying other positions
- Educational resources are exceptional
- One-click trading and customisable settings
- Great offers and promotions, as well as eToro Forex bonuses
The Downside Of EToro
eToro is not the cheapest of brokers to choose, and many reviews mention the fact that the trading spreads are higher than many others. The number of currency pairs available for trading is limited, when compared to the competition. There are also fewer high-powered tools than we’d have preferred, and the charts are pop-out windows which can make things a little cumbersome. Many trading platforms can be fully customized to individual user needs, but not so with eToro.
But even with these disadvantages, we’d certainly recommend you give eToro a try.
eToro Bonuses, Payments, Spreads, & Other Account Information
The minimum deposit for an eToro account is $50, and traders can open a position from $25. eToro has been consistently raising their initial deposit limits and the minimum lot sizes over the years, as they started from just $5 minimum deposit and $2.5 minimum trade size when they started in 2008. The highest eToro leverage is 1:400, and traders can choose their leverage while opening a position. This is one of the biggest advantages of eToro, as the traders can tweak their leverage and margin on a position-by-position basis. The drawback is that scalpers do stand to lose all of their money if they are not careful with using high leverage all the time.
eToro is not an ECN broker, and even for a market maker broker, eToro spreads start from 2 pips fixed. The higher spread is another disadvantage of the broker, as nowadays, market makers are offering standard spreads starting from 0.5 pips. The high leverage and spreads can be a hindrance to successful trading unless the trader realizes the pitfalls of high-margin investments.
eToro offers attractive bonuses, which helps traders to earn up to 20% initial deposit bonus for a maximum of $10,000 eToro bonus per trading month. The company also offers seasonal promotions and CopyTrade bonuses that are designed to keep traders interested and committed to maintaining their account with eToro.
eToro has a responsive customer service channel that includes a live chat feature, but the representatives are not always knowledgeable, and traders have reported inconsistencies in the way the support staff deals with clients. However, for most traders, the customer service department should sort out issues and help traders enjoy a pleasant and excellent trading environment.
eToro is one of the few brokers that are hard to ignore, but they do have some niggling problems that need to be addressed before they can satisfy a majority of their clients. Lower spreads, improved account transparency, better trading conditions, and an overhaul of the customer service department are a few issues that can help eToro address a majority of their client issues.