eToro Review – Can You Really Copy Traders And Make Money?

eToro is a well-known Israeli brokerage specializing in social trading, founded in 2007 by Yoni Assia, Ronen Assia, and David Ring. Established to disrupt the trading industry, it has since grown to become one of the world’s most successful social trading and multi-asset brokerages.

From the outset, their goal was to make “trading accessible to anyone, anywhere, and reduce dependence on traditional financial institutions.” It’s safe to say they’ve done a pretty good job of achieving those targets, as they now deliver one of the most expansive portfolios of asset classes and are famously the pioneers of social and copy trading.

On that note, here’s a detailed review of eToro and what you can expect to find when trading assets over there, including their crypto offerings, fees, and level of security. Let’s get into it.

Range of Offerings

At its core, eToro is a CFD broker, but over the years, it has expanded its services to offer a variety of financial instruments, including real stocks, ETFs, commodities, indices, and cryptocurrency. As a result, hundreds of different financial assets can trade on the platform across various categories, which makes it one of the best “one-stop-shop” brokerages on the market. At the time of writing, there are over 2300 tradable assets on the platform, which can be broken down into the following:

• 47 currency pairs
• 17 cryptos
• 2000+ stocks
• 14 commodity CFDs

As for cryptos, you can trade:

• Bitcoin
• Ethereum
• Ethereum classic
• Dash
• Litecoin
• Bitcoin cash
• Stellar
• NEO
• EOS
• Cardano
• IOTA
• Tron
• ZCash
• Tezos
• Chainlink
• Uniswap
• Dogecoin

Unlike Plus500, all non-leveraged long positions for crypto, ETFs, and equities on eToro are traded as real assets, which means you are purchasing the underlying asset and not a CFD. This means that when you go long on a crypto asset without leverage, you are physically buying the coin, which is great for those who want to increase your exposure to the market.

This means that all leverage positions on those asset classes (including shorts), forex, commodities, and indices are traded as CFDs. 

Copy-trading systems

If you have ever been exposed to one of eToro’s marketing campaigns, you will have likely been introduced to their copy trading program, which is one of their primary draws for a lot of their customer base. This is also where the term “social trading” comes into play. 

As it turns out, they have two programs; one is called CopyTrader, and the other CopyPortfolio. Here’s how they both work: 

CopyTrader™

With eToro, you can view the other trader’s profiles where you have access to their stats that reveal their previous performance, the number of other people that copy them, how long they hold onto their trades, as well as their bio and any comments they have made about the market or their open positions. 

Armed with this information, you can decide whether or not you want to copy another trader and enter into a position with them. This makes it a lot easier for recreational investors and those without the time to do their own research and study the markets. Simply pick the trader you think will perform the best and hit the copy button.

However, before you do, here are few important things you need to consider before copying a trader (taken directly from their website):

• The minimum amount to invest in a trader is $200.
• The maximum amount of traders you can copy simultaneously is 100.
• The maximum amount you can invest in one trader is $2,000,000.
• The minimum amount for a copied trade is $1; trades below this amount will not be opened.
• If you close a copied trade manually, the funds from this position will be credited back to your copy balance (the amount allocated to copy that person that is not invested in open positions).

CopyPortfolio™

CopyPortfolio is an innovative tool that turns the CopyTrader function into an investment fund to copy trade. Instead of following one trader at a time, eToro groups the most successful traders into a single fund that you can copy and (hopefully) profit from. This is a great way to diversify your portfolio and limit your risk when trading without the need for being an active trader in the market.

Commission and Fee Structure

In general, eToro has generous commissions and fee structure, but it is far from being the cheapest brokerage on the block. Due to its wide range of features, sleek design, and copy trading functionality, many newbies/recreational traders are attracted to eToro, which means that it’s not exactly suited for high-volume traders looking for razor-thin spreads.

With that said, eToro offers free stock and ETF trading, and the CFD and forex fees are pretty low, or at least in line with the industry average. As for the trading fees, all of the costs are found within the spread of your trading asset. The spread fee varies between the assets. For forex, it’s around one pip, and for CFDs, it ranges between 0.7-3 pips. 

However, seeing as we are a crypto site, let’s take a look at their crypto trading fees. Once again, the fees are found in the spread and consist of the following:

• Bitcoin – 0.75%
• Ethereum – 1.90%
• MIOTA – 4.5%
• DASH – 2.90%

There are also minimum withdrawal amounts for each coin, and the transfer withdrawal comes with a small fee too. There is also a fiat to crypto conversion fee of 5%, which is high compared to the industry standard.

Non-trading fees

eToro has non-trading fees that are in line with the industry standard. They charge $10 per month after one year of inactivity. However, all you need to do is log into your account for it to be considered active.

There is no deposit fee, and yet there is a $5 withdrawal cost.

Ease of Account Opening

Opening an account with eToro is about as simple and straightforward as it gets. As you would expect, the entire process is done online, and if you have all the relevant documents to hand, the onboarding process can be done within a matter of minutes. To get started, you need to register an account and provide your documents that include:

• Proof of identity
• Proof of address

There are two account types; a live account and a demo account (where you use virtual money). The KYC process is not required for a demo account.

*At the time of writing, eToro is available in over 60 counties. However, in the USA, CFDs are not available, which means that US residents can only trade crypto on their platform.

Deposits and Withdrawals

Depositing funds onto eToro is straightforward and free. There are many funding options to choose from, including:

• Credit/debit card
• Bank transfer
• Web wallets
• Crypto
• PayPal

The minimum deposit amount for new accounts varies depending on your country of residence; these are as follows:

• Australia/USA – $50
• Israel – $10,000
• Everywhere else – $200

There is a maximum deposit of $40,000 for credit/debit cards.

As for withdrawals, eToro has a flat fee of $5, which is pretty high when comparing it with their competitors. The minimum withdrawal amount is $30 and takes an average of 2-3 business days to complete.

Platform and Trading Experience

It’s safe to say that eToro offers one of the best-looking user interfaces in the industry. It’s sleek, has detailed graphics, and is extremely easy to navigate, so you shouldn’t have too many complaints in this department. 

eToro offers two choices for traders, their web trading platform or mobile. Both of these platforms are excellent and offer a wide variety of features for traders to enjoy. If you did have to pick holes in the design, you could argue that it lacks customizability as you can’t move the panels, but that’s about it.

An intuitive search function helps you locate and identify stocks easily, and placing an order in the market is about as simple as it gets. 

As for trading tools, there are plenty to choose from, such as a built-in interactive chart with one-click buy and sell buttons. One great feature of eToro’s is that you can see the overall sentiment of the other traders on the platform towards one particular asset, which really helps to give you an idea of how other people are speculating on its movement. There are over 70 different charting tools that you can use to conduct technical analysis, and all of the usual suspects are there that you would expect to see.

Educational Tools

As we mentioned earlier, Etoro gives users access to a demo account where you can instantly trade $100,000 of virtual cash. The virtual account is identical to the standard account, so this gives you a great opportunity to play around with the interface and get to grips with the platform before you deposit real money. 

In addition to the trading account, new traders also get access to the eToro Trading School, where you can find all sorts of helpful hints and tips on how to trade successfully. The learning tools include:

• Live and virtual classroom-based lessons
• Webinars
• Market updates and technical analysis
• Podcasts
• Articles and guides

Support

Customer service with eToro is in line with the industry standard. They certainly don’t set the world alight, but you can usually get by with the level of service offered as long as you don’t come to them with too complex of an issue.

Support is offered 24 hours a day, five days per week via email, fax, or live chat, and is offered in 21 languages via the web and mobile platforms. There is no phone support available. 

Regulation and Security

eToro is considered safe as it is regulated by several authorities and regulatory bodies. Of course, the regulatory body that oversees eToro in your jurisdiction depends upon where you are located.

eToro serves its clients through a unit regulated by the Financial Conduct Authority (FCA) in the UK. In Australia, they are served through the Australian Securities and Investment Commission (ASIC) regulated entity. All other customers located outside of these areas are served by a Cypriot unit that is regulated by the Cyprus Securities and Exchange Commission (CySEC).

Unlike some of its competitors, eToro is not listed on any stock exchange, as as a result, it does not disclose its annual report on its website and does not have a bank parent. While this is no real reason to be concerned, it certainly makes eToro less transparent than some of the other brokers out there.

The Verdict

eToro is an excellent option for both newbie and veteran traders who want to obtain access to a wide range of financial assets. They offer a beautiful-looking platform that works perfectly on both the web and mobile devices and is incredibly easy to use.

In general, eToro’s fees are reasonable, but non-trading fees can add up quickly, particularly if you need to exchange currency regularly or make regular withdrawals. However, this is a small price to pay when you factor in their wide range of features such as their CopyTrader™ and CopyPortfolio™ services, which are fantastic tools for novice investors or those that do not have enough time to dedicate researching stocks and analyzing the market.

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