Updated Apr 08 2021
eToro's main benefits are allowing non-experienced investors to copy other traders and the ability to trade without leverage while holding real equity on a user friendly platform. On the negative side, their copy trading statistics are not clear enough, they charge a withdrawal fee of $5 and their order placement panel lacks enough features.
eToro is best suited for :
|User friendly platform||Lack of clearer and more advanced order placement controls|
|Allows Copy Trading||Statistics about traders are not clear enough and account balances are hidden|
|Allows choosing your leverage||Withdrawal fee of $5|
|Allows to purchase real underlying assets without leverage||Minimum deposit of $200|
Here's what we'll talk about during our full eToro 2021 Review:
eToro's headquarters are located in Israel. Many brokers started there and then moved on to expand their reach by acquiring offices in Cyprus and the U.K. It was founded in Tel Aviv by brothers Yoni Assia (current CEO) and Ronen Assia together with David Ring around 2007. They grew to become one of the world's leading social investment networks through clever marketing and developing an extremely user-friendly trading platform.
No, eToro is not a scam, they're regulated by several Financial Regulators, let's go over a few of their top licenses with a direct link to the license provider, that way you can be sure that you're looking at the right information:
When brokers are well regulated, it means they're not going to disappear with your funds or scam you in any strange way as this would cost them their license and consequently take them out of business, this is a great positive point.
Aside from licenses we also know from first hand that eToro's customer support agents don't mislead clients with financial investment advice, yet they call clients to maximise engagement by providing market updates. At TheTradingBible.com we believe that the least your broker calls you the better, no matter the reason they choose to do so, we're big fans of traders learning how to do everything themselves and not trusting anyone.
This is where it gets interesting, most of the Brokers in this category offer only CFDs, right? Well, eToro started offering investors the possibility to purchase the underlying assets (the real shares for example), so how does this work?
Despite the fact they're well above 2000+ available assets, they're missing one of our favourite classes: CFDs on options.
Copy Trading is the ability to copy another investor's trades. But the beauty behind is that your money always stays under your control and by making use of an automated system you allocate a specific amount of capital to copy one or several investor's accounts of your choice.
In essence, you're just copying someone else's trades assuming you believe that person is a good trader.
Social trading is more or less like a combination of Facebook (social media) and a trading platform, all together on steroids. The idea is that you can chat with other traders, discuss ideas and vote on some particular subjects. It's quite a nice experience as we humans are always looking for new ways to connect and share knowledge.
eToro took the whole world by surprise with their social trading and copy trading features, let's go over the whole process of copying a trader inside their platform and how it looks.
First you must look for the main menu located on the left side on the screen (web platform) and click on the “Copy People” tab.
Then you'll be greeted by a main screen where you’ll have everything you need in order to start copy trading.
* Past performance is not an indication of future results.
Notice that below the blue bar you have several search options, these are the ones you can use to go through all their copy traders and filter them according to your preferences, for example: by country, preferred assets, gains in percentage or timeframe.
Below you’ll find thumbnails of several investors, these are traders that eToro's editors choose to feature above others.
All the squares below are nothing more than other copy traders sorted using certain filters, for example: top investors, trending, most copied or their various risk scores.
If you click on the name of any of these traders or popular investors then you’ll end up going inside their profile, and this is where we find the information we want to see about them. There are 4 different tabs: feed, stats, portfolio and chart.
The one below is the feed tab, where the trader shares information and people can comment on it. One very cool feature is that you can write in your own language and the platform has a small link to translate all sorts of text and that way you don’t suffer from language barriers.
If you click on the Stats tab you’ll find the juicy info about each trader in terms of statistics. Our honest opinion is that this is quite cool but we’re not exactly in love with it as it has one issue: it’s designed to put makeup on the losses and to not be so explicit about the bad things of each trader due to the use of percentages.
The one above is the formula, and this is what each variable means:
Let’s imagine that in January you started with an equity of $2000, you lost $500 through trading, and deposited an additional $1000 and later that month you gained $1500 through trading.
In the last week of January you had $4000 in your equity and you decided to withdraw $1000, and therefore your account equity at the end of January was $3000.
What was your return for January?
The return for January was: 33%.
The trader’s risk score: is shown on a scale of 1 to 10 where 1 means very low risk and 10 means very high risk. The more risk then the more likely the trader is to incur in big losses.
The risk chart shows the following values:
This section of the stats will allow you to see the trader’s asset class distribution across his trades and some other basic stats like his profitability and average trades per week.
The portfolio section will allow you to see the trader’s current open positions as well as his past ones. We don’t like this portfolio section as in the end everything is expressed in percentages and we don’t know the reality of the situation. The trader could be making a $10 profit and we end up reading it as 300% of the trade’s value.
This is the Chart section. It’s supposed to be a simulated performance using a $10.000 copy account with 60% stop loss. The idea here is that eToro wants to show you what would have happened if you had started copying that particular trader. It's very important to be clear about this: Past performance is not indicative of future success, just because the simulation performed well it doesn’t mean it’s a certainty.
Entering the Popular Investors Program means to become a trader that everyone else would want to copy. As you can see from the table below eToro rewards their popular investors with big amounts, for example: the Elite Popular investor category gets paid up to 2% of their assets under management (AUM), which means that if 1000 people are copying you and you’re managing $20.000.000 then you’ll get paid 400.000$ per year.
eToro’s platforms are best suited for experienced traders willing to neglect the benefits found in professional trading platforms in exchange for gaining an audience and inexperienced investors looking to enter the markets without trading themselves. All their platforms are designed to maximise user interactions through a social networking approach.
Etoro’s mobile trading platform has a gamified approach to trading, everything is colourful and oversized. The best feature of the platform is the ability to exchange information with other users through social sharing. The platform lacks speed and responsiveness, you can feel it especially when you click through the different options and a preloader with eToro’s logo appears on the screen, it gives a feeling that you’re looking at a mobile web browser experience and not a native optimised application. Let’s go over each feature:
eToro’s main mobile screen is the watchlists section, here are a few observations:
eToro’s notification center can be accessed by clicking on the logo located on the top right corner of your screen, the notifications will usually look like this:
Notifications are not customisable and are dependent on whatever eToro decides to send or your own configured price alerts.
Through the main menu you’ll be able to access the different platform areas, here’s what the most important mean:
The Asset view has 4 different tabs that give you access to: news about the asset, important information, charts and research data.
The image above is of the second tab, asset information where you’ll be able to see interesting data about a stock such as the EPS, Beta, Market Cap, etc.
Whenever you click on the “trade” button on an asset, the order placement window will appear. In the screenshot below we’re using an example of a non leveraged trade, which means that you can purchase the underlying asset.
In the screenshot below we’re using the example of placing an order with leverage by selecting the “X2” option, this means that we’re not purchasing the underlying asset but rather a CFD based on the asset itself.
Some very important things to point out about the order placement window:
The portfolio section gives you access to see your open positions and manage them.
If you click on any of your open trades it will open a second view with a little extra information, now, in order to find a way to close it you need to click on this second view in the option above “new trade”.
We think it's extremely difficult to find the option to quickly close a trade and we’re lacking a visual representation of our portfolio’s specific trades in a trading chart.
eToro’s mobile charting tools are available in vertical and horizontal mode. The image below shows you how it looks when using landscape mode.
By clicking on the small gear icon you’ll be able to: change the candlesticks type, add a few indicators to your chart and change the platform theme.
We found the mobile charting tools extremely limited in comparison to other platforms.
Just as we described earlier during our review, using eToro’s mobile platform you’ll be able to browse through the different traders you can copy and filter them by certain metrics.
Below you have a screenshot of the trader’s performance statistics in the mobile platform.
Both eToro’s platforms (mobile and web) are extremely similar, you can barely feel any difference. The main advantage of using the web trading platform is the ability to view the ProCharts section, which allows you to trade using a multi-chart view and configurable layouts (only for charts). Let’s go over each feature:
Just like in the mobile platform, your first landing page will be the watchlist area. In the web platform you’ll also have the left menu constantly available as you browse throughout the platform.
Notifications are available by clicking on eToro’s logo at the top right corner of your screen. They are exactly the same as the mobile version.
The asset view has the same 4 tabs as in the mobile version: feed, stats, chart and research.
The feed view provides recent information related to the asset, this is how the view looks like:
The stats tab will provide relevant information associated with the asset, in the case of a stock you can see the EPS, market cap, etc.
eToro’s charting tools are accessible by clicking on the charts tab inside each asset. The web version comes with a little more features, yet there is no fullscreen version of the charts, you’ll always have the left sided menu visible.
The best feature of eToro’s web platform yet inconveniently located is the ProCharts section. To access it you must click on the gear icon in the traditional chart and click on the “ProCharts” option.
The main advantages of this area is being able to create your own chart layouts and save them. Also you have the ability to either use different symbols on each chart or make all the charts have the same one, this is great for traders that study the same asset on multiple timeframes.
The portfolio section is also a virtual replica of the mobile app’s version as well, here’s how it looks:
The good thing about the web version is that closing a trade is easier as when you click on it it will show a small “X” on it.
eToro is quite open about their fees which is something we like, in every asset they explain which are the overnight fee charges. The list of assets is huge and there is no point in us naming all of them, but to give you an idea, below you’ll find a screenshot taken from their fees page:
Here you can see the fees per 1 unit of some highly traded indices like the Nasdaq 100 or the FTSE100 (UK100).
Remember, when opening a trade on eToro you always pay spread (the difference between both buy and sell prices) and when the trade is leveraged you’ll pay overnight fees on it if it remains open until the next trading day.
Our overall feeling with eToro fees is that they're very transparent yet their spreads are higher in many cases when compared to their competition.
eToro's minimum deposit is $200, there is no charges or fees from their side when depositing funds, their minimum deposit size varies as follows:
eToro charges a fixed $5 withdrawal fee.
This is something we don’t like that much, there are plenty of brokers out there that don’t charge for withdrawals.
eToro’s main benefits are offering social copy trading capabilities and the ability to purchase underlying assets without leverage. On the negative side both of their platforms lack responsiveness, the order placement panel can be confusing and their copy trading statistics are not clear enough.
eToro's stats and information on each trader are really interesting, yet we would like them to be more transparent and show each user’s balance and trade sizes to see the reality of the situation, a $10 profit can be considered a 100% return of a $5 capital.
eToro must also fix the order placement panel, it can be very confusing that both sell and buy options are colored in grey and the order placement button is always blue.
eToro is designed for 2 types of people:
If you belong to any of the above groups then it makes sense to use eToro, yet as a trader you’re probably aware that both their platforms leave a lot to be desired when compared to many of their competitors, so the main advantage is gaining exposure to a huge audience which you can monetise quite well (as you saw on the popular investors program).
For completely inexperienced investors that are not interested at all in learning how to trade themselves then eToro’s proposal makes sense as well, yet you must be careful when choosing traders to follow as their statistics are still missing a lot of information.
** eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results.
Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework.