eToro: an FCA, CySEC and ASIC Regulated Social Investment Network

eToro Review

Social Trading and Copy Trading

  • FCA, CySEC & ASIC ✔
  • Trader Friendly grade: A
  • Minimum deposit: $200
  • Social news feed
  • Forex spreads from 2
  • Social investment network
Trading, Copy Trading, Thematic Investing • eToro

eToro Review

eToro offers social trading including trading automation, and as such provides CFDs to trade on its platform (available on desktop, tablet and mobile). The focus on eToro's web platform is trading a range of markets either by copying other traders on the network or by making trading decisions informed to a greater or lesser extent by the network.

Its platform has three main areas, that is 'Trade Markets', 'Copy People' and 'Invest in Copy Funds'. The last of these is a new product, whereby traders can thematically invest in top traders, markets and partners.

The range of markets available to trade is Currencies, Indices, Metals, Energy, ETFs, Stocks and Cryptocurrencies.

Briefly, what does eToro do ?

eToro lets a trader inform their own trading decisions by connecting with the network of other eToro traders. Thus it may help discretionary trading, by alleviating the sense of being alone while trading. However eToro also allows this social trading to be automated, by copying the trades of other traders on the network. To trade, connect with and copy the network, it provides a user friendly platform with a range of markets and charting tools. eToro also lets the trader invest thematically, in a range of funds based on various themes and to buy and own cryptocurrencies.

Can a trader simply trade at eToro ?

It is entirely possible to trade as at any other CFD broker supporting discretionary trading. The platform is clear and user friendly, with a range of markets and a relatively large total number, along with technical indicators and other charting tools to analyse markets. One way of looking at the platform, is that social trading is a tool easily accessible on the platform, which can be used by a trader who likes to trade on their own, as added information. When the trader wishes to automate their trading, they can do so by copy trading. An additional feature of eToro, is that the platform provides a range of cryptocurrencies and Stocks which are owned by the trader (they are not CFDs and are thus not regulated), except at ASIC regulated eToro where they are bought as CFDs.

Cryptocurrencies

As well as Bitcoin (BTC), eToro offers Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Dash (DASH), Litecoin (LTC), Ripple (XRP), NEO (NEO), Stellar (XLM), Cardano (ADA), IOTA (MIOTA), EOS (EOS), TRON (TRON), Zcash (ZEC) and Binance Coin (BNB). These can be found in 'Crypto' on the platform. eToro now offers these with no leverage. Cryptocurrencies.

Crypto CFDs vs Crypto Assets at eToro

At the ASIC regulated eToro, cryptocurrencies whether bought or sold are all CFDs. This means that the trader does not own any cryptocurrency when trading the CFD (the price of the CFD is referenced to the price of cryptos on exchanges, thus the CFD allows the trader to trade on its price movement). This also means that no wallet is required, as this is a means to store a cryptocurrency asset. However at eToro FCA and CySEC regulated, the trader is buying the underlying cryptocurrency asset, which eToro holds for them (so they do not need a wallet either). CFDs are regulated, cryptocurrencies are not. However at the FCA and CySEC regulated eToro the trader will still trade crypto CFDs, when they short (sell) them.

Stocks at eToro

At eToro, when buying a Stock the trader owns the underlying asset, they are not CFDs, except at the ASIC regulated eToro, where Stocks are bought as CFDs.

Social investing

eToro provides what it calls a social investment network. This means that the experience of other traders can be integrated into the trading of each person on its network (which means anybody who has an account). This socialising of trading can simply be awareness of other people's opinions about markets, seen on the feed which appears when the markets are clicked on, to actually copying other people's trades, thus automating one's own trading.

eToro Club/eToro Credits

Due to CySEC regulations deposit related offers have been discontinued, including eToro Credits.

Copy Funds

eToro now offers Copy Funds, which is a way to utilise 'Thematic Investing', based on Top Traders, Markets and Partners.

Crypto CopyFund

As part of its 'Copy Funds' offering, eToro has introduced a Crypto CopyFund. This has a portfolio weighted according to market capitalisation, which covers a range of cryptocurrencies. Like eToro's other funds, the minimum investment is $5,000. Find out more about eToro's Crypto CopyFund.

eToro's platform

eToro's web trading platform consists of boxes of CFD instruments. Clicking on the chart image brings up a Procharts, which has times frames from 1 minute to 1 week, Candle, Hollow Candle, Bar, Line and Mountain chart types and 60+ technical indicators. Form the order box, it is possible to place a market order or set a rate.

Copy trading

Traders on eToro's network can be copied by clicking on the 'Copy Trader' button. This brings up traders with their profiles, returns, risk allocated as a number, and the number of copiers. The traders are separated into categories, for example, Top Investors, Trending, Most Copied, Lower Risk Score and Medium Risk Score. Traders to copy can be searched for by various attributes. Clicking on their profile box brings up more details, including a chart of their performance, feed and portfolio.

The basic format to copy trades is simply to choose a trader, allocate funds, and then have their trades copied in the trader's own account. eToro says that typically trades are executed in the trader's account in less than a second from the moment the copied trader executes the trade. The trader can decide whether or not to copy their open trades.

The minimum copy stop-loss is 5% of the copy amount. The minimum sum to allocate is $100, the maximum is $500,000, the maximum number of traders which can be simultaneously copied is 100 and the minimum trade size for a copy trade is $1.

Terms and conditions apply to copying trades and these can change at any time. Traders should be aware that past performance is not indicative of future results, so that just because a trader is performing well now, does not mean they will perform well once the trader copies their trades.

It is possible to post at any time onto the network and a social News Feed is available from the platform. There are over 7 million people on the eToro network.

To trade without copying, the trader chooses markets from the 'Trade Markets' button. However even here the social network is in evidence, so the trader can inform their own decision making by seeing what other traders are saying about a given asset, for example, utliising crowd trading insights. Also any trade made by the trader is added to the social network feed, unless they choose to trade privately (available from the Settings menu). Currently, there are 1000+ Currencies, Cryptocurrencies, Indices, Commodities, ETFs and Stocks available (subject to change).

Demo account

eToro provides a demo trading account for free which can be opened here: eToro demo account.

Minimum deposit and funding

The minimum deposit is now $200 (it was raised to $1000 earlier this year and has been lowered). Deposit methods include Credit card, Wire transfer, Inatec Payment AG (Switzerland), Yandex (Russia), Neteller, Skrill, Giropy, China Union Pay (Hong Kong), Worldpay, Barclaycard, Wirecard (Germany), Webmoney/Paymaster 24 and Sofortüberweisung. There is a withdrawal fee of $25.

Premium accounts

eToro does offer a Premium Program. To be in it, either the client has $40,000 in total equity in their account or they have made a total of $40,000 in net deposits over the past 11 months, terms and conditions apply.

The Premium account provides a personal account manager and direct access to eToro's trading room, weekly market videos and analysis, free access to the Trading Central platform, a personal Payoneer credit card and the Neteller VIP program.

Charts and placing an order

Clicking on the chart icon for a market box brings up a candlestick chart, this can also be set to hollow candle, line, mountain or a bar chart. It is also possible to choose Renko or Heikin-Ashi chart types and set a log scale from the settings tab on the chart. The chart has time frames from 1 minute to 1 week.

Orders can be placed from various places, including from the chart, from the asset box, and from the social information and other data feed which appears when an asset icon is clicked on. When placing orders, stop-losses can be set and trailing stop-losses if desired, leverage and take-profit.

Spreads and leverage

Spreads can change based on market conditions. Typical spreads for currencies are 2 pips for USD/JPY, 3 pips for EUR/USD and 4 pips for GBP/USD. Typical spreads for UK100, Germany 30 and SPX100 Indices are 1. Typical spreads for Gold are 0.45 and for Silver and Oil typical spreads are 0.05. The typical spread for Bitcoin is 0.75%. The typical spread for ETFs is 0.24%. Spreads for Stocks vary, but many typical spreads are 0.24%. Leverage can be chosen when orders are placed and is up to .

Regulation

eToro (Europe) Ltd. is a registered Cypriot Investment Firm (CIF), company registration number HE200585 and is regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 109/10. eToro (UK) Ltd. is a registered company in the UK, company registration number 7973792, authorised and regulated by the Financial Conduct Authority (FCA), under firm reference number 583263. eToro (Europe) Ltd. and eToro (UK) Ltd. both operate under and comply with the Markets in Financial Instruments Directive (MiFID). eToro AUS Capital Pty Ltd. is authorised by the Australian Securities and Investments Commission (ASIC) to provide financial services under Australian Financial Services Licence 491139.

Summary and grade

eToro is about social trading, and this broker make it possible to automate trading by copying traders on their network. However for those who wish to make trading decisions themselves, there is a solid range of markets to choose from as well as the social network to draw upon, and disseminate to.

eToro's integration of social trading and non-social trading, in a manner which does not seem to diminish the trading experience, helps give eToro a Trader Friendly grade of A.

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