eToro vs MetaTrader 4

eToro vs MetaTrader 4 | Which Is Preferable
eToro vs MetaTrader 4 Summary Card
Online BrokerMinimum DepositeToro vs MetaTrader
Minimum Deposit
eToro is a broker offering a user friendly trading platform which integrates social and copy trading tools into the platform and allows the trader to perform their own analysis on 2000+ markets.
eToro vs MetaTrader
Minimum Deposit
MetaTrader 4 (MT4) is a platform offered by a wide range of brokers, such as HYCM. MT4 supports trading with robots and has tools for the trader who performs their own analysis. MT4 has a successor MT5, also offered by HYCM.
eToro vs MetaTrader

eToro vs MetaTrader - Social & Copy Trading Platform vs MetaTrader's Range Of Features

eToro is a broker offering a user friendly online trading platform which supports social and copy trading. The copy and social trading tools are integrated into the platform, with features such as a social feed attached to information about a market to trade. The trader can use this social information when analysing markets and can copy traders, such that their trades are copied into the trader's own account.

eToro provides a range of charting tools to allow the trader to analyse by methods such as technical analysis, to supplement their trading analysis. There are 2000+ market to trade, covering Forex, Indices, Cryptocurrencies, Energy, Metals, Stocks, ETFs, Soft Commodities and Bonds. eToro features can vary depending on where it is regulated, but at eToro FCA and CySEC regulated, real Stocks, Cryptocurrencies and ETFs are offered to buy to own. Otherwise eToro offers CFDs.

MetaTrader 4 is an online trading platform offered by a wide range of brokers. It is associated with Forex, but can support a range of other markets. The number of markets offered can vary by broker, but tends to be up to 200+. MetaTrader 4 does have social trading features, which the broker may enable, but is perhaps best known for automated trading with robots. Robots are computer programs which execute trading strategies on behalf of the trader. Their programs specify instructions called algorithms. The trader may download these robots (called Expert Advisors or EAs for short) and can even build them, if they learn how to program in MQL4.

Automated trading with robots

Online trading robots will execute strategies on their own. For example, they might trade according to an indicator signal. This may in fact be the way the trader trades of their own accord. So why use a robot ? Robots do not tire (as a trader can) and hold steady as the trading frequency increases. The trade may wish to apply a strategy which requires them to execute trades in succession. They may find this hard to sustain. A robot can sustain this kind of trading indefinitely and barring hardware or software failures, without error. If the trader wishes to minimise connection errors, they can rent a VPS (Virtual Private Server) which is a computer hosting the EAs (typically available through the broker).

Robots however do have a downside which is a consequence of the way they execute trades. They will tirelessly execute their instructions. But if the market does not conform to the expectations of the signals, then the robots will produce losses in the trades account, sometimes rapidly. However this can be an advantage, if the market turns as expected, which does happen (but may not). This complexity of the market, the capacity for it to have the expected outcome via complex moves, is a reason why traders may wish to use a robot as it can be difficult for the human trader to stick with the trade.

Social and copy trading

Another approach to market complexity and trading it, is to use social trading. In principle, this lets the trader use information directly into their own trading sourced from experienced traders. If the trader wishes they can let traders trade for them, with copy trading. This also has its potential drawbacks as the fact a strategy performed well in the past (i.e. why perhaps a trader chose to copy another trader) does not mean it will continue to perform well.

Markets are complex, strategies stop working and traders stop performing well. This is why it can be helpful to apply social and copy trading as part of a toolbox, along with the trader's own analysis. MT4 does have social trading features, via MetaTrader Signals, but there are third party platforms such as DupliTrade which let the trader social and copy trade into their MT4 account.

Trading with chart analysis

The trader can perform their own analysis via technical and fundamental analysis. Technical analysis looks at the chart and assumes it contains the information necessary to enter, manage and exit a trade. Fundamental analysis looks at the effect of data on the market. The trader may wish to combine both. That is they may wish to trade using technical analysis to generate trading conjectures, but keep an eye on what data is coming into the market and what it may do.

Social trading may help with this, as it provides the views of other traders about this kind of information. Some strategies are based almost entirely on fundamental data, such as news trading. eToro has a user friendly platform which can be helpful for traders who plan and execute their own trades, but especially beginners. MT4 arguably takes an effort to learn to use. However it has a successor, MetaTrader 5 (MT5).

MetaTrader 5 - MT4's successor

MT5 offers a number of improvements on MT4. The trader may wish to start with this platform, even. It can have a more user friendly interface. It does have more features such as technical indicators and time frames built into the platform. MT5 uses a different programming language for robots called MQL5. Like MT4, the trader can also download and build technical indicators. It is now possible to find brokers which offer MT4 and MT5.

Which is better, eToro or MetaTrader ?

It really depends on the trader. eToro has an approachable platform with features which the beginner trader may appreciate, such as social and copy trading. However it has a wide range of markets and can support experienced traders as well. The beginner can start with MT4 or MT5 as well, but it may take some getting used to. However once the trader learns how to use MetaTrader, they may wish to stick with it. It has a wide range of powerful features, and supports automated trading which is something the trader may wish to use (eToro does not support automated trading with robots).

This said eToro will have more markets to trade than MT4. However MT5 can support more markets vs MT4 and a range of brokers offer 1000+ markets on MT5. eToro is a dedicated social and copy trading platform, which supports traders who perform their analysis as well. Traders may appreciate the user friendliness and the way these tools are integrated into the platform. However other traders may appreciate MT4 and MT5's customisable flexibility and support for tools such as robots trading.

The trader can construct a toolbox of techniques to apply to the market with eToro or MT4. The difference is that everything is seamlessly integrated on eToro in a user friendly interface, while MT4 is more of a customisable package, but does, unlike eToro support trading robots. As robots are an advanced technique and arguably may work better when the trader knows enough about trading to know how to choose one (or build one) then eToro can be seen as a platform that beginners may appreciate, but this said a beginner can use MT4 and potentially grow as a trader with its features. Advanced traders however will also potentially have the experience to know why a strategy might or might not work and can also choose from the wide range of market eToro offers, including (depending on location) real Stocks to own (without a commission charge) and become a trader to be followed.

Test out the platform

The trader may test out demo versions of eToro's platform via the link below and MT4 at AvaTrade. Demo accounts are a way to become familiar with the platform. The trader can try out eToro's platform features including social and copy trading and test out MT4 at AvaTrade.