In just a span of a few years, a small fintech company became the leading social trading platform in the world. How did they do this? Are the founders just pretending to help small investors start with forex currency trading system or are they really helping them with their investments? I am going to discuss below more information about the eToro forex trading and if investing in it is worth your time and efforts.
The Advantages and Disadvantages of eToro
Like anything there are advantages and disadvantages in using the eToro platform. Let’s take a look at them first so you will know what you will be dealing with when using eToro.
Advantages of eToro users:
- It is user-friendly. In fact, I enjoyed using eToro and discovering it’s features. Newbie traders will have no problem using the eToro forex trading platform for the first time because they have designed it well to fit the newbie traders. Try searching for reviews about the site and I’m sure you won;t find anything negative about the platform navigation of eToro.
- It’s a social trading platform so you can ask for help and get the opinion of your fellow traders anytime.
- The interface of eToro is very responsive. The graphics on the platform are great. It also gives real time information about the current status of trading just like when you are on the trading floor. The features can also be used using a PC, Mac, Android, or IOS devices. This means you can do trading anytime, anywhere.
- There are some features in eToro that are now found in any other social trading platform. Copy Trading and Copy Funds features of eToro are designed only for the platform. These features will let new and small investors to mirror the trade of other experienced traders. This allows new users to flawlessly open an account in the platform. Check out other reviews and the rating for both features are 5-stars.
- The fees on trading are very low compared to other social trading platforms.
- The charting of eToro are full-featured. It has 66 indicators and drawing tools that help charting the statistics in trading better.
- Cryptocurrency is the new trend lately and there are about 35 new options for cryptocurrency trading waiting for you to be traded.
- Don’t worry about your investment because it is in good hands. They are authorized by Cyprus Securities & Exchange Commission or CySEC. They are also compliant with the European Securities and Markets Authority or ESMA. They are also licensed in the UK by the Financial Conduct Authority.
Disadvantages of using eToro
A lot of users have complained about the following:
- They have a web ticketing system with no phone or live chat support so the resolutions are slow when there are issues.
- The webs trading platform have several issues that is related to customization.
- There are some reports on outages like not being able to view other trader profiles, transaction histories, and balances.
- The website does not have a new link which is a feature that allow clients of the eToro forex trading to post in social forums. There is no feature that update clients on market reports and analysis, but the Tradeview feature is an alternative to get this information for your trade.
- They have a withdrawal fee if $25.
- Some countries like Canada, Japan, Brazil, Turkey, north Korea, Iran, Cuba, Sudan, and Syria cannot trade in eToro forex trading platform.
Who Are etoro?
eToro was founded by the brothers Ronni Assia and Ronen Assia together with David ring. In 2010, they release the copy trading feature and the OppenBook platform of eToro social trading. The android application was also released that year so trading can be done anytime, anywhere.
Between 2007 and 2013 the company has managed to raise $3.5 million from Russian and Chinese investors. They managed to get a partnership with Coindash in December 2017. This lead to the development of blockchain-based social trading. In 2018, they got an additional $100 private funding.
Is the eToro Forex Trading Platform Good To invest In?
If you are in doubt about investing in eToro because you are afraid to be scammed, then don’t worry. They have no known issues to date of being scammers. It has not been around for a long time, though so if you are still convinced then you have to deal with legacy brokers. The problem with dealing with trading using legacy brokers is transparency. They are not easy to use and can be expensive for new traders.
Maybe this is why in just a span on about 12 years the users of eToro have already reached 3.5 million in 152 countries. This is good when compared with the users that competitor trading platforms have who have the same number of years in existence.
One of the things that you have to bear in mind when using etoro is that they are not using a parent bank. They are also not listed on any stock exchange worldwide. In case of a financial crisis there are no banks that will help liquidate the assets of eToro.
The good thing is that they are regulated in three countries which are Cyprus, Australia, and UK so your investments are very safe.
The legal entities of etoro are the following:
- a. United Kingdom – the protection amount is £50,000 which is regulated by the Finandial Conduct Authority or FCA.
- b. Australia – there is no protection amount if you are a trader based in Australia, but they are regulated by Australian Securities and Investments Commission or ASIC.
- c. Other clients worldwide – there is a protection amount of €20,000. They are regulated bu the Cyprus Securities and Exchange Commission or CySEC.
What I love about eToro is they have low trading fees and they have a transparent structure. The non-trading fees however are high and the withdrawal fee is $25.00. The inactivity and financing fees are the following:
a. US Stocks – the fee level are low and the spread per side is 0.09%.
b. EUR USD – the fees are average and the fees are built into spread which cost 3pips.
c. Inactivity – the fee level is low and there is a charge of $5 per month if you have been inactive for one year.
Opening an account in eToro is easy because they have made the necessary changes for a fast and user-friendly platform to join in 2018. The minimum deposit when trading in eToro is $200 in all the countries where it is available except Israel which require an initial deposit of $10,000. For wire transfer deposits, the minimum is $500. If you are hesitant to put your money in, just go ahead and open an account in eToro. The free demo feature in this forex currency trading is free to use. You can play around it and practice trading for a period. The initial practice trade that you can use is $100,000. After you get to know the ins and outs of using it, you can then do an initial deposit on your account so you can start to trade.
All that you have to do when opening an account in eToro are the following:
1. Create an account with the eToro forex trading platform by filling in a form that will require you to enter your personal details.
2. Make sure that you fill-up the part that require your phone number for security purposes.
3. Answer the questions on that are required so eToro will know the level of your trading experience.
4. Verify your eToro account by giving a proof of identity and proof of address.
5. Start using eToro and make an initial deposit.
No platform can beat eToro forex trading platform when it comes to social trading. Undoubtedly, they have improved it’s features so that their current users will stay and encourage other users to trade using it. They have a very large user-base so their social trading feature capability is magnified.
The disadvantages of using eToro are only minimal when compared with the other trading features and I think this is why more and more people are using this platform.
A fair warning to those who want to invest in this platform:
Trading always have high risks so only invest money that you can afford to lose. There is no guarantee of being successful in trading even if you use the copy trading feature from a very successful trader. There is always a risk of losing money because trading depends on a lot of factors.
When investing in CFD’s you should be ready for high risk of losing your capital. They are very complex and the percentage of losing your money is as high as 65%. You need to understand how CFDs work before investing. If possible try to get a forex currency trading system course that can help you understand how to read the chats and the movement in trading.