Is eToro Good ?

Is eToro Good ?

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Is eToro good ?

To the extent that it is possible to answer a question like this, Broker to Trading will try. Firstly what constitutes 'good' in a broker ? eToro is regulated by the CySEC in Cyrpus and has a branch in London, regulated by the FCA and is additionally regulated by the ASIC in Australia. Thus it is regulated by three of the major bodies in the world. This gives assurances, including about the safety of clients funds.

As a broker it offers a wide range of products, covering Forex, Indices, Energy, Metals, Stocks and Cryptocurrencies. Except for long positions in Cryptocurrencies, these are available as CFDs, thus the trader does not own the underlying asset. When buying a Cryptocurrency, the trader does own the underlying asset. The total number of markets is over 1000.

However what people may be wondering in asking this question, is about what eToro is focused on, which is being a 'Social Investment Network'. The idea is to add data about the activities of other traders on their network to the tools used by each client. This can be used to inform the trader's decision making. It is also possible to Copy Trade, that is to choose a trader on the network and to have their trades automatically executed in the trader's account. This is automated trading, but differs from the kind of trading automation available at some other brokers (excluding other brokers offering copy trading).

In other kinds of automated trading, computer programs make trading decisions, according to rules and algorithms applies to markets. Trading can be run on 'auto pilot' with a VPS (Virtual Private Server), for example, which executes trades even when the client is not logged into the broker. So eToro's automated trading is a kind of automation not so much by algorithms but of social trading itself.

Of course those making trading decisions may be using automation or they may not. Many traders even when using discretionary methods are still using algorithms, but ones written in the mind or somewhere else, i.e. not computer programs. For example trading using RSI rules. Indeed choosing someone to follow based on results, may in itself constitute a rule based trading method.

The problem with all rule based approaches to the market is that they may work for a while then may stop working. The problem with copy trading, and any trading automation is expressed in this phrase: past performance is not indicative of future results. With eToro one has the possibility of using a kind of toolbox of methods, one's own insights, the insights of others and automation.

For those who want to have the scope to trade as with any other broker and use automation informed by a large network of over 7 million traders, and do so with a regulated broker, then eToro may be worth trying. It is possible to use a demo account with eToro as well - the virtual trading account can be switched to and back from the real account, to practice (using the virtual account does not result in the loss or gain of money).

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