We are sure of one thing with the eToro broker before analyzing it: it is a special broker.
There are thousands of brokers in the world and the vast majority are similar.
However, eToro is a broker with a different product that makes it stand out from the great mass of world brokers.
In this review we are going to see if it is a good broker or not, although it will depend on the niche we want to dedicate ourselves to.
For example, I tell you that for high frequency day trading, eToro is not the most suitable broker.
Now, do you think you will win in the long term with that style of trading?
eToro excels at other things, a lot.
Let’s see what this broker is about.
What is eToro?
eToro is the largest and most popular copy trading platform in the world with hundreds of thousands of users.
We can say that eToro is, without a doubt, one of the leading brokers in the world today.
Its product offering is: CFDs on stocks, indices, currencies, commodities and cryptocurrencies; and also cash actions.
For this reason and for the capabilities and services it offers with its brokerage product, it is one of the most interesting brokers for the individual trader and investor today.
This broker was born in 2007 and soon became a benchmark for social trading in the world, attracting tens of thousands of traders and investors.
In 2015, it integrated its trading platform (webtrader) with social trading (OpenBook) facilities, becoming the absolute leader in social trading in the world.
In 2016, it introduced Portfolios, which are investment portfolios managed with algorithmic systems and which became very popular. Later they were renamed Copyportfolios.
Cryptocurrencies arrived in 2017, given the immense growth of that market.
This broker is originally from Cyprus and is registered and regulated in the CySEC of that country, as well as in the English FCA .
Furthermore, eToro operates under the European MiFID license and is regulated to offer services in 40 European countries. It is also registered with the CNMV and the Australian ASIC (through IC Markets).
Its two offices are based on the regulations of its main offices: Cyprus and London.
eToro Market Maker
eToro is a market maker broker that ensures to operate without a money table, regardless of market conditions.
eToro agrees not to re-quote prices or change operations in any case.
This is a very interesting point because it is one of the issues that many traders are concerned about.
The truth is that practically all CFDs and Forex brokers operate under a market making model since they are either the market makers or the providers.
The fact that eToro is regulated by the FCA should give us the guarantee that the broker is serious.
Open account with eToro and minimum deposit
Opening an account with eToro is extremely easy.
We simply register on their website with our personal data and after verifying them in our email we will already have access to the virtual account.
This virtual account can be used in a risk-free trading model for as long as you want. Click here and open a virtual account with eToro.
75% of retail investor accounts lose money when they trade CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
All you have to do is change the internal system from “real mode” to “demo mode” within our profile on eToro.
To move from virtual account to real account we will have to verify our identity and residence. For this, it is enough to send an email with images of our identity document and receipts that prove our residence.
In total the process should be very fast.
eToro supports account opening from most countries in the world except Iran, North Korea or Japan.
One of the most surprising novelties of 2018/2019 is the possibility of opening accounts for clients from the United States who, from 2019, will be able to invest in cash stocks with eToro. However, they will not be able to trade CFDs, which are prohibited by that country.
The minimum deposit is $ 200 and can be made by transfer, card, PayPal, Neteller, Skrill, WebMoney and GiroPay.
eToro offers live webinars, online trading course and a wide trading community with which to interact, being able to see the operations of the most popular traders live.
How does eToro work?
Here we enter the interesting part of eToro.
As a market broker it works the same way as any other CFD market broker.
In other words, we can negotiate the different titles available and hope that our investment decisions are correct in order to earn money.
What makes eToro different is its copy trading system , which is the idea behind the broker and its gigantic community of traders.
It is a very interesting system for both traders and potential investors.
If you are a trader and want to offer your talent, you can do it through eToro and aim to earn a lot of money.
As an investor, or trader with little talent or time, we can search for the most popular and best traders and assign an amount to their operations in such a way that we will be “copying” what they operate and assigned risk management that we will have to do.
As a summary of how the current program is , we have to:
It will be paid based on the volume of money under management. The commission is 2%.
So if we have 200 investors with accounts worth $ 400,000 a year following us, we can earn $ 8,000 that year.
As we can see, the potential is very great, especially if you achieve a lot of popularity and increase the number of copiers a lot.
The best way to see how this works is by joining eToro and finding out who are the leading traders on the market.
Risk Warning: 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
So what do you want to be? Trader or investor? Copier or copied?
It is clear that the interesting thing about the model is to be able to become a copied trader with a large volume of cash, with which you could end up earning quite a bit of money.
That would be ideal.
But it is not always possible.
In fact, it is almost never possible.
Well, because investment activity is one of the most complex that exists and the vast majority of traders and investors in the short and medium term lose money.
Getting to become a competent trader usually takes many years of experience and still is difficult.
However do not be discouraged, that everything is possible .
The easiest thing is to use the account as an investor and copy the most interesting traders while we are learning.
In fact, many traders or investors use a mix of copying other traders and also trading; and it is that the eToro platform gives us great flexibility in doing these things, being able to choose the risk assigned to each position with ease. This is so because eToro is one of the most flexible brokers out there, which is a boon for the trader.
Who are the best eToro investors?
Risk levels in eToro
This is a variable that will vary greatly over time.
The number of swings that are in it is very large, something that on the other hand is normal in financial markets.
An interesting way to search for the best eToro traders is through its advanced search system.
In it we can put the criteria we want.
The main criterion that we must take into account is the number of copiers .
Other interesting criteria depending on your profile as an investor are the total return and the risk profile.
If we are looking for calmer but safe investors, we will do well to look for a low risk profile, no greater than 4.
If we want stronger emotions, the risk profiles of 5 and 6 are the ones that interest us. In fact, most leaders in terms of return after two years are traders with risks of 5 and 6.
We will see two criteria as of the end of August 2019.
The first is the total return , thus looking for the most aggressive traders.
Let’s see who leads that classification after two years.
Total return eToro traders:
As we see, we have quite interesting earnings.
However, you always have to look within the profiles to see what positions they have and what way they can operate. For example if it is short term, medium term or if it is more in stocks or cryptocurrencies.
One thing usually happens between these traders:
That many of them are there by luck or by atypical operations. This makes it important to look at their portfolio and what they have done more or less.
We will notice that most of your trading is non-consistent .
However, you can always find an interesting trader.
For example, the trader Eddyb123 , who after several years has a profit of more than 600%.
However, the interesting thing is not that but the fact that it has a rather interesting portfolio (“current portfolio”), with enough balance since it has assets such as Amazon, Microfost and gold, among others.
Of the others in the top positions, none seem interesting once analyzed “from the inside”. Maybe just filoki.
Best eToro Investors for Copiers
This is the most logical criterion.
After all, we’re supposed to be looking for the most successful eToro investors, and those should be none other than the ones with the most copiers.
In this case we can notice a detail. The ones with the most copiers need not necessarily be the ones with the best return for the period.
In fact, some of the most popular ones have an average return of around 50%.
What are the best of these?
Of those observed in the first 6 or 7 positions, I think those with the most interesting profile are:
The rest could be valid but either depend heavily on cryptocurrencies or Forex, two assets that I prefer less than stocks or indices, for example.
A very interesting detail that we observe in these traders is that most of them operate with little leverage. For example, the two that I have mentioned do not use either, but rather buy in cash.
What is eToro’s leverage?
Well, being a fully regulated broker in Europe, you have to abide by ESMA regulations.
It imposes a maximum leverage of 30: 1 for CFDs.
The same summary is like this:
30 to 1: major Forex pairs
20 to 1: major indices, gold and minor pairs
10 to 1: minor indices, raw materials, exotic pairs
5 to 1: actions
2 to 1: cryptocurrencies
For the investment of spot stocks we can use trading without leverage
This is one of the most promising and successful releases that the eToro broker has had.
In a super-competitive market, with hundreds, if not thousands, of brokers, eToro continues to hold the lead in the social trading market and certainly among the first in global Forex and CFDs trading.
And how do you get it?
Well, through a very good service, with a large number of markets and flexibility for all sizes of clients, and above all, for being the most innovative and dynamic broker in world social trading.
With products like Copyportfolios, eToro shows that it is also a leader in innovation, which perhaps explains why it is one of the global leaders in trading.
With this product, traders and investors will be able to invest and trade in such a way that they can choose between innumerable portfolios and similar strategies.
For example, they may invest 10% of their portfolio in a portfolio of oil stocks, and 40% in a portfolio of small-cap stocks, with another 20% in a portfolio that includes the best Forex traders, and a 10% to the portfolio that replicates the best traders of 2017.
Do we see the advantage of being able to carry out a type of negotiation and investment in this way?
Not only do we have the typical CFDs of ETFs and sectors, but we also have new portfolio packages that replicate the most dynamic sectors and niches in the market.
Many of those niches, and perhaps the best, are those of the leading eToro traders, so that we can invest in portfolios made up of the best of them and following different criteria, so that no strategy or taste is left uncovered.
In this way, the possibilities for diversification are expanded, with the inherent advantages that this entails.
We can see how the Portfolios service works on the eToro page.
Risk Warning: 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
eToro offers trading in currency, cryptocurrency, index, commodity and equity CFDs.
The best feature of eToro regarding its products is the fact of enjoying flexible trading, in such a way that we will be able to negotiate in packages with great flexibility.
The standard package for trading is $ 50, which is the minimum on most instruments.
Depending on the market we have, we can apply the corresponding leveraged investment.
If we buy CFDs on stocks we can choose to buy $ 50 as the minimum value of a share without leverage. If we choose the maximum leverage we will be negotiating 250 dollars of that action.
What eToro does is divide the titles in such a way that we can operate with fractions of the values.
Stock markets are really popular on eToro.
In its early days the broker was more focused on the Forex, but over the years it has built a formidable stock offering.
It first introduced CFDs on stocks, adding products year after year, until today it reaches thousands of stocks on the world’s main stock exchanges.
Later, he ended up introducing spot trading, in a gigantic step that undoubtedly makes him one of the world’s leading brokers.
It can be traded on the stock markets of:
Hong Kong: 103
As we see there is access to the main markets. In the future it would be good to have a greater number of securities in the Spanish continuous market.
You can also trade the most important ETFs in the world. The difference from stocks is that the minimum trade package is 200 USD.
The same goes for index trading. The minimum trading margin is 200 USD.
One of the biggest bets in recent years by eToro has been the introduction of more and more cryptocurrency markets, trying to compete and take away the market for exchange houses.
The eToro advantage in this regard?
Well, in eToro there are no cases of hacks or massive thefts, which does happen frequently in decentralized crypto markets.
Today it offers:
16 main pairs
14 cryptocurrency crosses
More than 60 pairs with other currencies, mainly euro and pound
The offer is more than enough to invest and operate in the medium term with these currencies.
This broker is presented as a valid alternative for investing in cryptocurrencies through CFDs, with somewhat higher spread costs but with greater security of the long-term portfolios.
This is one of the brokers that are characterized by having an own elaboration platform .
Nothing to do with the vast majority of Forex and CFD brokers who depend on the services of Metaquotes (Metatrader 4 and 5).
This platform was originally called eToro Webtrader.
As the name implies it was an eminently web-type platform. In other words, it was not necessary to download the application for the PC.
Later they introduced eToro Openbook, which was an advanced version of the first one that allowed to introduce more advanced management when using social trading.
For a time both platforms, Webtrader and Openbook worked separately but finally they were united in the integral platform of eToro, where everything is already negotiated in an integral way.
A Mobil-type platform is also available, which can be downloaded from Android and iOS devices.
eToro is one of the most successful trading companies in the world and a broker that I have used with an always satisfactory experience, being one of the favorite brokers when it comes to trading and investing in financial markets.
A broker that due to my extensive experience in this does not give problems in withdrawing money and with whom we can have enough confidence.
Without a doubt, one of the most innovative brokers in the world.
Its concept of social trading has been very successful, and this despite not having a very special platform. In fact it is one of the simplest that we can find in the markets.
It is not specially focused for very frequent trading, but rather more swing-type or multi-day trading, which in our Reviews is fine, since it is a type of trading where the odds of not losing are better, at be a calmer type trading.
There are a lot of traders who are concerned with the issue of leverage and the fact that eToro complies with ESMA regulations, which only leaves you a leverage of 30 to 1 in Forex, at most.
That is not a problem because it is more than enough leverage to be able to operate financial markets with great power.
It is more as we saw in the section of the best investors of the moment, the majority of those with more copiers do not use leverage or use very little. So it is something we should not worry about much.
The main thing as always is to operate well , or in the case of eToro choose good investors to copy.
It is better to spend more time trading than one day.
As for the spreads and costs, they are among the highest in the market, but this is more than offset by the fact that they are spreads that vary little, unlike other brokers that have very low spreads but increase them for many periods by news or other circumstances.
For example, people complain a lot that the spread on the Forex is too high .
True, with spreads of 3 pips in the EURUSD, the cost is higher than other variable spread brokers that for much of the day have spreads of 0.3 or 0.6 (plus a small commission).
The problem here is that in these brokers there can always be significant variations in the spread at times of low liquidity, such as news and at night.
What is more, as I said before, I think it is clear that eToro is not a broker for high frequency trading, so those spreads should not worry us. If we use operations in which 100 or 300 pips of profit are sought, the spread of 3 pips is not so important.
The same happens with indexes like the DAX 30 and the SP500. In the latter, for example, it is 0.75, just slightly higher than other competitors. However, like the previous case, this is not such a problem if we dedicate ourselves to looking for broader operations.
If you want to see eToro Reviews, click on the link.
One of the best innovations of recent times is the attack on the United States market, where I think it has great potential with copy trading.
Even if it is only in stocks, the professionalism of that market opens new opportunities for eToro.
How to win on eToro?
EToro’s best feature is its ability to become a popular trading provider and earn a living from it.
It is impossible to open an account with $ 1,000 and earn hundreds of thousands with it in a few years.
That simply does not exist.
What we can do is be a good trader, attract potential copiers, and start making money with eToro. This can be achieved whether you are one of the best traders of a period, because you appear in their search engines, or because you are someone popular outside of eToro and you start promoting your user in the company, with which you would obtain a huge number of followers and you could win.
For the rest, remember the fact that a great advantage of eToro is the possibility of flexible trading on each instrument, something that no broker (or almost none) offers today and that seems to me a very important point in favor of towards better risk management for small traders.
Regulation: CySEC, FCA
Broker Type: market maker, NDD
Minimum deposit: $ 200
Deposit methods: transfer, card, Paypal, Skrill, WebMoney, GiroPay.
Markets: CFDs of currencies, indices, raw materials and stocks.
Platform: web and mobile
Spread: EURUSD 3 pips, USDJPY 2 pips, GOLD 0.90, SP500 1, DAX30 3. Fixed spreads
Commission: no commission.
Leverage: 30: 1 maximum
Visit the website for more information
eToro is a multi-asset platform that offers both equity and crypto assets investments, as well as CFD trading.
Keep in mind that CFDs are complex instruments and carry a high risk of losing money quickly due to leverage. 75% of retail investor accounts lose money when they trade CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to risk losing your money.
Past performance is not an indication of future results.
Crypto assets are volatile instruments that can fluctuate widely in a very short time and therefore are not appropriate for all investors. Aside from CFDs, trading of crypto assets is unregulated, and therefore not supervised by any EU regulatory framework.