You don’t get to 4.5 million users in 170 countries without doing something right and something first. Ever since eToro came to life in 2006 in Israel, they have managed to fulfill both those requirements. While today the name eToro is well known, the company was originally started by two brothers, as RetailFX, and later with the joining of some new partners became the powerhouse we know today. Pioneering the original social trading industry has earned this broker notoriety around the world.
Basing your business strategy in the idea, that a person with no to low experience can trade at the same level as the seasoned traders, was not popular before eToro. They believed, that through access to the combined knowledge of the trading community any person would have the ability to trade at a high level. This belief proved right and profitable for the company, as they have become the premier social trading platform in the world.
Staying true to their business strategy and concept, eToro sticks to accessibility as a priority when it comes to account types. Providing you with 2 choices, a demo account to practice on and a standard account to trade with real currency. The demo account allows you to practice with $100,000 of virtual currency. Letting you see if the platform and the broker are for you without risking any actual money.
The Standard account can be setup with a minimum deposit of $200. There are no bonuses or promotions, but like most of their competition eToro also offers an active trader bonus titled Popular Investor program. If you place a minimum deposit of $1000, allow others to see your trading activity, and recruit a copier for 2 months you will earn some extra income.
One thing that might seem like a negative for eToro is the fact that they only offer 1 platform for their customers, but on the contrary, this is one of the things that makes them stand out. The platform titled “OpenBook” is what makes eToro so unique, ever since it’s been launched in 2010, this social trading platform was not only the first of its kind, but also home to 8 years of constant improvements.
OpenBook as a platform was what made eToro’s whole business strategy possible. By creating a software that let traders see each other’s statistics like profit levels, market position, and trading strategies applied in real time, they accomplished their goal of eliminating significant amount of time from the learning curve in place for newcomers of online trading. Having all this information in front of the traders helps them understand the patterns and trends of the market.
Current version of OpenBook is called eToro CopyTrader, this update came about from the intentions of people in charge to want to simplify their platform even more by combining their WebTrader and Open Book platforms into one, putting all functionality under one roof. With the new name came the new innovation as eToro announced a new concept called “CopyFunds”, which let customers copy a range of funds chosen by eToro.
If you are a trader on the go, you will be able to download eToro’s mobile trading platform on your IOS or Android phones. The applications both stick true to the nature of eToro by providing the same live feeds of another trader’s activity you would on the web-based platform. Application is downloadable free of charge and is sure to satisfy the traders’ needs for information and ease of use.
Once you have setup your eToro account you will need to fund it to get things going, and where they lack selection in other categories, this is one category where they offer an abundance. The deposit methods available to users are:
- Credit / Debit Card – Wire Transfer – PayPal – Neteller
- Giropay – Skrill Limited – WebMoney – Wirecard
- Yandex – China Union Pay
Through all of these methods your funds will be posted immediately, but the most
efficient method is through Credit Cards or eWallets.
To withdraw your money, you will have three options to choose from: Credit Cards, PayPal, and Bank Wire Transfers, if you use one of these methods to deposit your money you will have to withdraw it the same way. It takes on average 1-3 for the money to process and show up in your account.
Spreads and Commissions
What eToro lacks in annual fees and commission for trades they make up for in form of spreads. Since the company provides so much information and technically do most of the work for the beginner trader, they charge a much higher spread than their competitors. According to latest numbers, these are some examples of the average spreads traders paid recently EUR/USD 3.0 pips, EUR/GBP 4 pips. These high spreads make it hard to encourage seasoned veterans to use this broker. If you have your own trading strategy, you don’t need to see other people’s movements to decide your next move, and you will find other companies who offer spreads as low as 0.1 or even 0.0.
Since eToro does not offer multiple accounts or platforms, they base their leverages on the asset traded. Each instrument has its own leverage maximums and minimums. Ranging from to 2:1 to 400:1, there is a wide array of leverages for traders to use. A leverage of 1:400 means you will only need $200 to open a $80,000 trade, which increases your profit possibility greatly along with your chances at a loss. Leverages are great tools for the more seasoned or confident traders.
Regulations & Security
Since they are based in Cyprus, eToro is regulated by Cyprus Securities Exchange Commission (CySEC). On top of Cyprus eToro is also regulated by UK’s Financial Conduct Authority through eToro (UK) Ltd, and since both FCA AND CySEC are under the Markets Financial Instruments Directive (MiFID) this makes eToro MiFID compliant, giving them permission to operate within the Eurozone.
This pioneer has earned their stripes in security by putting transparency first in business and management.