In this article, we will talk about our experiences with the social trading broker eToro. In general social trading is becoming more and more popular. The idea is to “follow” other traders and benefit from their performance by copying their trades or portfolios. It has been shown that eToro has integrated social trading very well into its trading platform. However the platform is also suitable for “normal” trading. We also looked at the trading offer, costs and fees as well as the broker’s customer support. We also took a look at eToro’s training offerings.
eToro experience with forex trading offer: 47 currency pairs available
For our review, we first took a closer look at eToro’s trade offer. In particular we looked at the range of tradable currencies. On the forex market currencies are not traded individually but in currency pairs. An example of this is the popular currency pair Euro/US dollar (EUR/USD). It has been shown that eToro allows you to trade 47 currency pairs. These include major and minor currency pairs as well as exotic currency pairs:
- Major currency pairs: In our test we found that eToro allows you to trade all major currency pairs. These are especially Euro/US dollar (EUR/USD), US dollar/Japanese yen (USD/JPY) and British pound/US dollar (GBP/USD).
- Minor currency pairs: The broker also offers the possibility to trade with numerous minor currency pairs. Examples of these are: Euro/Swiss Franc (EUR/CHF) and Euro/British Pound (EUR/GBP).
- Exotic currency pairs: If you want to, eToro also allows you to benefit from the price fluctuations of exotic currency pairs, including US dollar/Mexican peso (USD/MXN).
As you can see, eToro offers a wide range of tradable currency pairs. The trading offer is complemented by the possibility to trade a wide range of other financial instruments: Indices, stocks, commodities, ETFs and crypto currencies
Etoro offers high leverage FFor currency trading
For our review, we also took a closer look at eToro’s leverage, which plays an important role in forex trading. This is because it determines how much capital is required in the trading account to trade a particular financial instrument. Here’s an example to illustrate this: we trade the EUR/USD currency pair. In Forex, we generally trade with standard lots, which corresponds to a traded capital amount of 100,000 US dollars. However, thanks to the leverage, it is not necessary to have that much money in your trading account. With eToro, investors can use leverage up to 1:30 for currency trading. This means that trading a standard lot with the Euro/US dollar requires 3,333 Euros. The broker also offers the possibility to trade with mini lots. This reduces the amount of capital traded to 10,000 euros, which is why you only need 333 euros on your trading account.
eToro Forex: Use social trading
We mentioned in the introduction that eToro is one of the largest social trading providers. This is also evident from the trading platform, which is particularly well suited for this type of trading. It’s very easy to follow other traders and use or copy their eToro depots experience (“copy trading”). In the rest of this article we will talk about the broker’s trading platform in more detail.
Overall, eToro convinced us with their trading offer for forex trading. We liked the opportunity to use high leverage in currency trading.
- Large selection of different currency pairs
- Possibility to leverage the available capital (maximum 1:30)
- Social Trading available
2. Forex trading costs: eToro does not charge commissions
When comparing or testing brokers, it is also important to look at the trading costs. Basically, the following costs and fees can arise when trading Forex:
- Costs that arise with every trade (usually due to the spread)
- Fees for deposits and withdrawals
- Other costs and fees (for example, inactivity fee)
Our eToro experience with spreads
In our experience, the biggest cost of trading on Forex is the fee that you have to pay to the broker for each trade. Often the broker charges these costs in the form of the spread. This term is used to describe the difference between the buy and sell price. The higher this difference is, the higher the fees are for the trader. Brokers can structure the spread in different ways:
- Fixed spreads
- Variable spreads
- Variable spreads with commissions (fees)
Let’s start with the fixed spread: This spread is always the same height, for example 3 pips (In Forex trading, the term pips is used instead of points). The best way to illustrate the spread is to use a short example: For this we trade with the currency pair Euro/US dollar. In our trading platform we can see that the EUR/USD pair is currently trading at 1.1343 pips. If you now decide to buy the currency pair at this rate, you will receive it at a price of 1.1346 pips.
A variable spread can change depending on the market situation. For example, this spread will increase especially when the market is nervous. The advantage of a variable spread is that it is usually lower than a fixed spread. Some brokers offer the possibility of lowering the spread further. However, you then have to pay a commission (fee) to the broker for each trade. Whether such a fee model makes sense for a trader depends mainly on his trading approach. However, in our test we found that eToro does not charge any commissions. We looked at the spreads of different currency pairs:
- Euro/US dollar (EUR/USD): 3 pips
- British pound/US dollar (GBP/USD): 4 pips
- US dollar/Canadian dollar (USD/CAD): 3 pips
- Euro/Norwegian krone (EUR/NOK): 10 pips
Overall it has been shown that the spreads at eToro are relatively high. However in our experience not all traders are affected by these fees in the same way. So it depends largely on the number of trades how much the spread affects the trading account at the end of the month. On the positive side, there are no additional costs for social trading. Instead, you only pay for the spreads of the copied trades.
Other eToro fees – avoid inactivity fee
Additional costs can be incurred by eToro through the so-called inactivity fee. In our experience this fee is charged by many brokers if you don’t actively use your trading account for a certain period of time. Our test has shown that this period is twelve months with eToro. After that the inactivity fee of 10 Euro per month is charged. Fortunately this fee is relatively low at eToro. Nevertheless we recommend to use eToro’s trading platform regularly to avoid the inactivity fee.
- The spreads are relatively high at eToro
- There are no fees for social trading
- The inactivity fee of EUR 10 is charged after twelve months
eToro experience with accounts & accounts: the eToro trading account
In the following we will talk about our experiences with eToro’s accounts and accounts. We have found that you can open the following accounts with the broker:
- Account for live trading
- Demo account with virtual capital
- Account for professional clients
Open an account with eToro in just a few steps
Our eToro test has shown that opening an account is done within minutes. To do this you need to click “Sign in” at the top right of the eToro website. This will open a new page which contains the question “You don’t have an account yet? You will also find a link with “Register”.
In order to use the account later for trading with real money, it is necessary to confirm the address and identity. The easiest way to do this is with an identity card. It is also necessary to make the minimum deposit of 200 US dollars into the trading account.
Open an account with eToro as a professional client
With eToro you also have the option to open an account as a professional customer. However, customers must meet at least two of the following requirements:
- Sufficient trading activity: The number of trades made in the last year is important
- Sufficient trading capital: at least 500,000 euros
- Work in the financial sector (for at least one year)
It seems to be relatively easy to meet the first requirement. The situation is quite different for points 2 and 3. We will therefore now look at the question of whether the professional account is even worthwhile. The main difference to the normal eToro account is that the professional account has much higher leverage. We already mentioned that the maximum leverage is usually limited to 1:30. However, as a professional customer you can also use much higher leverage (for example 1:300). However, our experience has shown that as a trader, you usually do not need such levers at all. For this reason, the normal eToro account is also very suitable for forex trading.If you live outside the European Union your leverage is not limited to 1:30 if you’re not a professional trader.
- Opening an account with eToro is simple and straightforward
- A minimum deposit of 200 US dollars is required for the live account
- eToro also offers the possibility to open a professional account
Forex trading platform: eToro trading platform is very well suited for social trading
Next, we took a closer look at eToro’s trading platform for our review. It’s been our experience that some traders underestimate the importance of a good platform for trading. For example, you usually spend many hours a day sitting in front of the trading monitors and analyzing the chart using the trading platform. For this reason, it is important that the trading software provides good support. In our test we found out that eToro only has one trading platform for forex trading. The broker has developed it himself.
eToro experience: Self developed trading platform
We were surprised to learn that with eToro you can’t trade with the “MetaTrader (MT)”. This is the most used trading platform worldwide. When traders trade via the MT, they can usually switch brokers very easily. This is because the new provider will in all likelihood also allow you to trade with their familiar trading platform. With eToro, however, you first need to familiarize yourself with their trading platform.
Fortunately, our test showed that the trading platform is easy to use and clearly laid out. Therefore, even beginners will quickly be able to execute their first trades on the platform. In general, eToro’s software looks more modern than MetaTrader. Especially the MT’s user interface gives the impression as if it hasn’t been adapted for 15 years. Maybe this is one of the reasons why eToro decided to develop a platform on their own.
Furthermore social trading plays an important role at eToro. On the eToro platform it’s very easy to find other traders and copy their trades. The numerous filter functions of eToro proved to be especially helpful in our test. This way you can, for example, search for traders who have a consistently good performance. All this would probably not have been possible with the MetaTrader.
EeToro platform also well suited for technical analysis
However, eToro also allows you to trade currencies without social trading. During our test we found that the platform is very well suited for technical analysis. Investors can access many drawing tools to analyze the charts. There are also many technical indicators available for forex trading. Overall we liked the eToro trading platform very much. First of all, it’s very well structured which makes it an excellent choice for beginners. On the other hand, the features offered mean that advanced traders can also use the software.
If you want, you can also use the eToro platform as an app for your smartphone or tablet to access your trading account on the go. The app is also easy to use. As usual, the download is done either via Google Play or the Apple App Store.
- At eToro you trade with a trading platform developed by the broker
- This was developed especially for social trading, but can also be used for “normal” trading
- The trading platform is also available as an app
Usability of the website: clear and transparent structure
In this section we report about our experiences with the usability of the eToro website. Fortunately we found that the broker’s website is clearly and transparently designed. The navigation can be found on the website in the upper right corner. The menu is divided into seven items:
- social trading
- Language selection
- Log in
The area of “investment” is particularly important. This is where you can find information on the range of products on offer and trading conditions. We think it’s very positive that eToro is transparent in terms of costs and fees. This distinguishes a reputable broker.
A further plus point: Interested parties can open an account very quickly via the website. Overall eToro does a lot of things right with the website.
Usability of the eToro website is very good
Important information on the trading offer and trading conditions is easy to find
The Internet offer is also available in different languages
eToro customer support experience: multilingual support staff available
When testing a broker it is also important to look at their customer support. eToro can be contacted in the following ways:
- Contact form
- Social networks
Fortunately, we have had positive experiences with the broker’s employees: they were friendly and helpful.We also noticed that the customer support is also available in different languages. This is something eToro can score with, because it avoids communication problems. It’s a pity though that customer support can’t be reached by phone. This is where we see room for improvement at eToro.
Before contacting support you can use the extensive eToro FAQ database to find an answer to your question.
All in all, eToro’s customer support gave a good picture in our review.
eToro support is easily accessible (contact form, email and social networks)
Friendly and helpful staff
Large FAQ database
Payment methods: eToro offers free deposits
We have already mentioned that many brokers charge fees for deposits and withdrawals. The payment method used plays a particularly important role here. In our test we found that eToro offers the following payment options:
- Bank transfer
- Credit cards (MasterCard and Visa)
- Online Wallets (PayPal, Skrill and Neteller)
As you can see, eToro offers different payment methods. It turns out that the broker does not charge any fees on deposits. However you should be careful with bank transfers that your own bank doesn’t charge transfer fees. We recommend that you check with your bank or savings bank in advance. In general, bank transfers take the longest (a few days). In contrast, transactions are much faster with credit cards and online wallets.
As mentioned, a minimum of 200 US dollars is required for a first deposit. Those who prefer to use a bank transfer must transfer at least 500 US dollars to their trading account.
For withdrawals, one should consider that the minimum amount is 50 US dollars. In addition, eToro charges a fee of 5 US dollars. We recommend that you generally avoid withdrawing small amounts. Overall it’s a pity that eToro doesn’t offer the possibility to withdraw money for free.
- eToro offers many payment methods
- Deposits are always free of charge
- However, there are fees as soon as you withdraw money
Additional offers: use helpful training offers and demo account
Next we looked at the additional features of eToro. These consist mainly of training materials and a free demo account.
Our eToro forex experience with the education offerings
In our test we found that eToro provides the following training services to its customers:
- Live webinars
- Trading Videos
Altogether we have had very good experience with the training offered by eToro. Beginners are introduced to currency trading step by step with the trading videos and the e-course. We also liked the live webinars which were offered. Even advanced traders can use them for further training.
Use eToro demo account
By now, almost all brokers offer the possibility to open a free demo account for Forex trading. Fortunately eToro is no exception in this respect. As shown, it only takes a few minutes to open such an account with the broker. Real time quotes are already provided by eToro on the demo account. In this way it is possible to simulate currency trading as realistically as possible. However, you don’t trade with real capital on the demo account, but with a virtual balance. Our test showed that the amount of virtual capital in eToro is 100,000 US dollars. This can be used to try out and train forex trading
Unlike many other brokers, eToro does not limit the trial period to a specific time period. Instead you can use the demo account for an unlimited period of time. This has the advantage that there is enough time to get to grips with the broker’s trading platform. The demo account is also great for trying out different strategies. This also includes testing trading with different currency pairs. For example, the Euro/US dollar (EUR/USD) currency pair behaves quite differently than the US dollar/Japanese yen (USD/JPY) currency pair.
All in all, we really liked the additional features of eToro.
- eToro provides its customers with helpful training offers
- These include live webinars, trading videos and an e-course
- eToro’s free demo account provides 100,000 US dollars of virtual capital (unlimited time use)
Regulation & deposit protection: eToro is regulated by the CySEC
Is eToro serious? This is the question we will be looking at below and in this context we will also look at regulation and deposit protection. To find out which government agency is responsible for regulation it depends on where the broker is based. For example, German brokers are regulated by the German Federal Financial Supervisory Authority (BaFin). eToro (Europe) Ltd is based in Cyprus. More and more brokers are settling on the Mediterranean island. Cyprus has been a member of the European Union for several years and also uses the Euro. The CySEC (Cyprus Securities and Exchange Commission) acts as supervisory authority. This has similar tasks as the German BaFin.
In general, it is advantageous for traders to trade with a European broker. Because in this case, European law also applies to the provider. According to this law, for example, it is required that customer deposits must be kept separate from the company’s other assets. Furthermore, there are strict requirements in the EU regarding data protection. In addition, customer deposits must be protected up to a certain level. In Cyprus, this is the responsibility of the ICF security fund. This protects customer deposits in an emergency up to a maximum of EUR 20,000 per customer.
Our test has already shown several times that eToro is a serious company. The website is very customer-friendly and transparent. Furthermore eToro supports its customers with good support. The broker has been in business since 2007 and has grown continuously since then. Therefore the company seems to have a well functioning business model. In addition, eToro has now succeeded in becoming one of the leading providers in the field of social trading.
Overall the broker has also convinced us in terms of regulation and deposit protection.
- eToro is supervised by the Cyprus Financial Supervisory Authority CySEC
- It appears that eToro is a serious company
- The customer deposits are secured by the ICF security fund up to an amount of EUR 20,000 per customer
Awards: eToro has received many awards
Finally, we looked at what awards eToro has received in the past and how they are perceived by the trade press. For example, we found that the broker was awarded for “Most Innovative Trading Platform” at the “World Finance Awards” in 2010. The trading platform has also received very positive reviews from the trade press. The main reasons for this are the ease of use and the good integration of social trading. This is also in line with our experience. eToro also regularly scores points with its good customer support and helpful training.
eToro is also known as a sponsor of the West Ham United football club. Furthermore the company was able to secure a place among the best “FinTech50” in 2015.
- eToro has been awarded several times, for example at the “World Finance Awards” for the “Most Innovative Trading Platform”.
- 2015 eToro could secure a place among the best “FinTech50
- The trade press is particularly positive about the trading platform, customer support and the broker’s training offers
Conclusion: eToro can convince with a good platform for social trading
In the course of this test we have dealt with the broker eToro in great detail. Our eToro forex experience is very positive overall. This gives you the opportunity to trade many different currency pairs on the forex. We also liked the eToro trading platform very much. It looks modern and is very user friendly. So even beginners need only a short time to start trading on the forex. The platform also offers enough features for advanced traders. The integration of social trading is very well done. This way you can profit from the performance of the other traders. The numerous filters and search functions of eToro have proven to be very helpful in finding consistently profitable traders. We were also convinced by eToro’s good customer support and helpful training offers.
If you’d like to try out the broker for yourself, you can use the free demo account. As shown, it can be opened via the eToro website in just a few minutes. Real time quotes are provided on the account to simulate currency trading. However, you don’t trade with real money but with virtual capital. eToro provides a virtual balance of $100,000 USD to train you to trade on the forex.
Overall we can recommend eToro as a broker for forex trading.
Strengths and weaknesses:
- Easily accessible trading platform for forex trading
- Very good integration of social trading (with search and filter functions)
- Helpful training offers (live webinars, trading videos and e-course)
- Free deposits
- Fast and uncomplicated account opening
- Good multilingual customer support (e-mail, contact form and social networks)
- Unlimited demo account with virtual credit (100,000 US dollars)
- Spreads could be lower
- No free payouts