Please note that the eToro OpenBook denomination no longer exists, since it has been merged together with the eToro WebTrader in a integrated and unique platform.
You can visit our eToro Review to discover the new platform and our opinion about it.
You can still read this post too, to better understand the “social” aspect of eToro, since the functionalities remained the same.
Talking about eToro and its modern approach to Social Trading, we must necessarily review its OpenBook.
As I mentioned, with this company, you can:
- Trade personally;
- Follow the operations and events of the eToro investors you prefer;
- Replicate the operations of one or more traders you have chosen, thanks to the CopyTrader function.
Obviously, no one is stopping your from doing all these three things together, but if you are interested in the “Social” potential of traders, instruments and markets in general, then the eToro OpenBook is the right tool for you .
EToro OpenBook Review by InvestinGoal
The eToro OpenBook is an instrument created in 2010, and is the component that transformed eToro from a simple Copy Trading into a true Social Trading company, with all the connotations that the term implies.
The name OpenBook recalls a lot another term used frequently in trading, i.e. Order Book, which is commonly used in various financial institutions to identify that tool that shows the orders and aggregate volumes of all the exchanges in place. Until some time ago, nobody was showing it. Today there are several companies and brokers who are beginning to show their Order Book to their customers, in order to facilitate their decisions.
EToro has decided to make this tool public to all its registered users, including those who have just a practice account, and to call it more explicitly OpenBook.
Compared to a classic institutional Order Book, the eToro’s one has been enriched by a social component, that has made it a very innovative tool.
But the eToro OpenBook is not only this. In fact, it is divided into three levels.
EToro Open Book
– My Feed Section
As soon as you log into your eToro Open Book account you are transferred in the My Feed page.
When you open your Facebook profile, the first thing we see is a list of activities (photos, comments, etc.) of our friends. With eToro it is the same thing.
In the opening My Feed section you can find the list of all the trading or social activities (comments, like, link, etc) of the Traders you have decided to follow and, just as with Facebook, of any feed you can decide whether to put a like on it, a comment, or share it in your turn, in order to show it in the feeds of those following you.
EToro is a Social Network in all respects, and that’s why his is true Social Trading. All members are traders, or rather investors, everyone can follow everyone, everyone can become a “Popular Investor”.
Every moment you have the opportunity to access your platform as you would with Facebook, but in this case, to discuss topics of finance, investment and trading.
Should be noted that the eToro policy is to open a public OpenBook profile for all users, even those who simply wanted to test the platform with a demo account.
Once you have enrolled, eToro provides you a demo account with 10,000 $ (the only currency available to deposit), but also a public OpenBook profile, where your funds are obviously zero at the beginning, that you can use to start following (without replicating) or interacting with the other investors, as you would do with Facebook or Twitter.
With the demo account you can trade in first person, or even replicate the trades of other investors, but remember that everything you do in demo will not appear in any way in your public OpenBook profile, that is the one where you originally had $ 0. With eToro, everything that is done with demo money is not shown.
– Investors Profile
With Facebook, besides being able to see all together the feed of your friends, you can also see the personal feed of everyone, even those who are not yet your friends (if allowed by the privacy restrictions), so you can see their personal history.
With eToro it’s the same thing. Clicking on the name of any member you can access his or her public profile, where you can find the first data, starting with name and photo.
Please note that in order to become a “Popular Investor” you must provide your real name and a real photo (both controlled by the eToro staff), a thing for example that is not necessary with ZuluTrade. EToro is made of investors with real names rather than Signal Providers with fancy names.
The OpenBook profile of a trader is divided into 4 sections:
Here you can find the social history of the trader. There are listed all his personal feed, the post he shared, the comments and like he has given and received. Each user can write directly on the news feed page of the investor, in order to talk with him in person, ask for advice, opinions or whatever.
In this section are shown the statistics data of the trader’s performance. With this information, as you’ll see deeper in the eToro course, you can analyze more objectively the trader’s actions, in order to understand if certain parameters can be good for you or not.
We must say right away that on this point eToro has improved a lot, and the data available today are much more than in the past. The most important thing surely is that finally eToro has made available up to three years of historical data of the performance, and not just the last few months as it was before.
However, eToro is still far from allowing a professional analysis of data like with ZuluTrade, where the data are complete, with no time limit.
In this section you can see where the trader is making his moves or his trade. We can see what he has invested in in the past, and what he is investing in now.
There is also a History subsection, and even here the comparison is mandatory. With ZuluTrade you can view all the trades executed by the trader, with many details, and even download the whole history to an Excel file. With eToro instead you can view only the last 100 operations, with very few details.
Here eToro has for sure a big room to improve.
Here we can find, in alphabetical order, all the people who are following or copying that investor, and how many are the Followers (those who only follow) and Copier (those who also replicate signals) of each one.
Through the investors OpenBook profile you have the opportunity to decide if the investor you have analyzed interests you to the point of becoming one of his followers, thus following all of his social events, including operations, or turning on the CopyTrader function, and thus replicate automatically on your account all trades made by him.
We will discuss of the latter option in the next review.
– OpenBook Markets Section
The Markets section is what we might call the eToro’s Order Book in the classical term.
Here you can find all the instruments and products on which you can trade and invest with the CFD technology. In addition to the major currency pairs we have a wide range of stocks of the major listed companies, broken down by sectors, as well as commodities (gold, silver and oil) and indices (like the S&P 500, Nasdaq, or the Dax).
By clicking on each of them we enter the “personal” news feed of the product, and it’s here that eToro has given its “social” touch to the Order Book, making it a really interesting tool.
In addition to data on the overall position of the eToro users (excluding shares) and some other technical data, you have all the feeds from the users regarding that specific product, grouped thanks to a simple use of tags.
This way you can find in one place all the details on the transactions carried out by traders, their reasons, ideas, comments, links, charts, images, everything related to that single instrument, all produced and shared by other eToro members.
I think that this section, more than anything, is what makes eToro a Social Trading company.
Anyone can contribute their own feed, and as we can see, you can also find contributions of a certain value, as shown in the image below.
Etoro Open Book Review – Our Opinion
As mentioned a few lines above, at the operational level, you have the opportunity to exploit the potential of the eToro Open Book in two ways:
- simply following investors you consider the most interesting, and trading on your own following their moves and their ideas;
- or even automatically copying their operations, as we shall see in the next review.
A clear point in favor of eToro is that all the traders who are visible in the OpenBook and that you can choose to copy from, work with real accounts, i.e. accounts with real money, while for example with ZuluTrade the Signal Providers may also work with demo accounts.
In eToro the investors work on their accounts and their capital in the first place, and this should make their approach to markets more responsible (although is not always like this), eliminating a large part of those improvised traders more interested in additional earnings than in real trading.
Our overall opinion on the eToro Openbook is positive for what concerns the possibility of each user to access valuable information, and to share them in turn.
Spending some time searching for good or experienced investors, you can create a news feed with excellent daily information from which to learn and improve your knowledge of trading, investment and markets.
If you are interested in a currency exchange or stock in particular, in the Markets section is really possible to tap into what might be called the Wisdom of the Crowd.
Do you have a question? Do you want a quick clarification? Just ask, or comment, and usually in a short time someone on the other side will respond.
The eToro OpenBook enables true Social Trading at a community level, because, being all public, in many may respond to your feeds, and give you different opinions or different views.
What unfortunately we think is still not up to the challenge is the amount and depth of data you can analyze about a trader in his personal OpenBook profile.
Certainly it has improved a lot than previously, but as we shall see more fully in the next eToro CopyTrader review, if an investor has to decide to invest his money, copying the signals of a trader, he should be able to access as much data as possible and, thanks to these data, have also a tool for advanced research, in order to try to accurately search for traders suited to his investment strategy.
On this, eToro has made progress, but can still improve a lot.