eToro Review – Our Independent, Technical and Professional Opinion
Looking for an eToro review that’s professional, technical and above all honest?
Want to figure out whether eToro is a good broker, and especially if it is good for you?
Then you are in the right place.
In this eToro review we’ll provide in the first instance an explanation of how this Social Trading broker works.
But not only.
Here’s what you’ll discover in this review:
- Our opinions on eToro
- Its strengths
- Its weaknesses
- Any dangers
- For who it is best suited
All this, with a technical and professional approach but explained in easy terms.
No false promises, no bait and hook.
Only technical opinions based on our professional experience with eToro.
Now, let’s begin.
Scroll the page. You’ll find a handy menu to see all the topics covered in this review and quickly jump to the one you are most interested in.
Before proceeding with all the various eToro reviews, please note these three points:
2. To better follow this review or the guide you can open in a few seconds a free and unlimited eToro Demo Account;
3. If you don’t know how to start and who to follow, here’s our list and the procedure to find the best eToro Traders to copy
Scroll these eToro reviews, or use the menu below to instantly find the topic you are looking for.
1.1 – Company’s details
2.4 – 2013 – Introducing CFDs
3.1 – EToro and Social Trading
3.2 – EToro and Copy Trading
3.6 – EToro cost review
3.7 – EToro support review
Review Updated at January 2016
We hear more and more about Social Trading in several areas of the trading and investing world.
But when it comes to pure Social Trading, then we must review the broker eToro.
To date, we speak of over 4.5 million users in over 140 countries.
EToro is not born as a Social Trading company, but rather as a forex broker outside the box.
Its desire to stand out at all costs from the other intermediary services and all the other forex brokers, in an attempt to be innovative and up to date, led it to establish itself as leader in one of the most innovative investment area, both in terms of business and social media, where this company is very active.
Being a broker to all effects, to use its services each user has to register and open an eToro trading account (as opposed to Zulu Trade, where instead you have to choose another broker with which to open your account). This created the conditions for the birth and evolution of a real community of investors.
EToro today, in its essence, is always a broker, but has now become a global market for investors around the world who want to operate on currencies, stocks, commodities, indices, Bitcoin and ETFs using CFD (Contract For Difference) with the logic of Social Trading and Copy Trading.
New eToro.com Review
EToro was founded in 2007 as a broker in the Forex market. The brokerage services are provided by eToro (Europe) Ltd. (operating under the commercial name “eToro”), an investment company registered in Cyprus (CIF – Registration Number: HE200585) regulated by the Cypriot Securities & Exchange Commission (CySEC ) under the license number 109/10.
EToro (Europe) Ltd. is obliged to operate under the Markets in Financial Instruments Directive (MiFID), which is the EU directive in force since November 1, 2007, and updated in these 2015, which provides a harmonized regulatory regime for investment services in the euro area.
Etoro Review – History of a “strange” forex broker
Having defined it a Forex broker, the first image we have is that of a broker that provides brokerage services to allow retail traders to work efficiently in this market.
EToro’s mission instead has always been quite another. The plan of its co-founder and current CEO Jonathan Assia (Yoni for eToro’s friends) has always been to make financial markets accessible to everyone, both in terms of required capital, and especially of the knowledge and experience necessary to participate.
In other words, make Forex Trading a child’s play, an investment instrument where even the most inexperienced user might be able to operate with a minimum of logic and strategy.
2008 – The Birth of the WebTrader
The first attempt of 2008 made in this direction, despite the good intentions, in our opinion, was rather exaggerated, as the picture below, which shows the first WebTrader of that year, can prove.
No screen with quoted exchange rates, no chart, no analysis tool, no stop or limit order to enter. This system was called the “Marathon“, and was an “alternative” way of showing your executed forex trading orders.
Did you want to invest on the Yen against the Dollar and the Sterling? Then the Japanese Sumo fighter had to be in front of the American Uncle Sam and the English business man, and that meant you were gaining because the yen was rising against the dollar and the Sterling.
Another “alternative” forex trading tool conceived by eToro in its beginnings was the “Globe Trader“. It was a world map, with flags marking the origin of the various currencies. If you wanted to go Long or Short on the Sterling it was enough to click on the Great Britain flag to open the form for the order.
No doubt those old display styles, more similar to a video game than a trading platform, have discouraged many professional traders, accustomed to the classic orders tab and the usual trading platforms.
On the other hand, we must recognize that many novice investors found in eToro an elementary and intuitive system to understand what was going on and what they were doing.
The customer targets they decided to focus on from the start was the non-expert investors and traders, a public who felt less confident in front of charts and quotes rather than on more simple and graphically funnier tools.
And it’s still so, even though the platform has definitely evolved towards more professional standards. You can check out our eToro WebTrader review to see how this Platform is today.
EToro is definitely the best choice for those looking for an intuitive and easy to manage instrument, far from the stereotypes of the highly professional trading platform, but complicated and difficult to use.
However, despite the ease of use of the platform, anything can and could make up for the fact that the new investors lacked the necessary knowledge of the market and of profitable trading strategies (which, in any case, happens also to those who choose to trade on Forex with the most professional platforms, such as the MT4).
The marathon can even be “intuitive” to understand, but knowing who will win the race it’s still a dark matter.
2010 – Introducing the OpenBook
Not by chance, in July 2010, eToro successfully made its appearance in the revolutionary new world of Social Trading, introducing the new OpenBook platform.
With this tool, the ones that we were once called “Gurus”, i.e. the best traders in eToro, could also have a voice and communicate with other users showing their moves.
This was the beginning of the total affirmation of eToro in the specific sector of Social Trading.
2011 – Integration of the CopyTrader function
But eToro did not stop there, of course, because in May 2011 it launched the CopyTrader function, integrated with the OpenBook.
If, until the day before, users could observe what a trader was doing, discuss with him, and manually copy his trade, from that day, with the integration of the Copy Trading functionality, the user could also replicate automatically the orders of the selected “Guru”, who was rewarded according to how many users were replicating his orders, as still is today, with some variations.
After November 2015, the eToro platform has evolved further, assuming, as we shall see, the current form. In this latest version, the OpenBook and CopyTrader functions have been integrated with each other, being now under one roof along with the WebTrader. You can see how they differed in the past on our eToro OpenBook Review and eToro CopyTrader Review.
2013 – Introducing CFDs
It was not over yet. Being born as a Forex Broker, eToro’s offer was limited to currency trading, but in2013 eToro announced the possibility of trading with CFD (Contract For Difference) on stocks, indices and commodities.
Trading with CFD on companies’ stocks, like on commodity or index, does not mean buying those stocks, a thing in many cases very expensive, but only speculating on the possible rise or fall in the price itself, being able to do it with very small amounts.
A whole new set of traders specialized in those new areas began to converge on eToro. For the investors interested in Copy Trading (but not only) it was an opportunity to create a real diversification on their people-based portfolio, replicating orders from currencies traders, and from stocks, indices and commodity traders as well.
In January 2014, eToro also announced the possibility of investing in Cryptocurrency, with CFDs onBitcoin, and in 2015 they have also introduced EFTs (Exchanged Traded Funds).
November 2015 – The New eToro Platform
After some months of beta-testing, in November 2015 eToro officially launches the new platform, virtually identical to the previous for the functioning, but innovative as though it concerned the structure itself and the functions of the platform.
In the new platform all the components, i.e. the Personal Account, the WebTrader and the OpenBook, are under the same roof in an integrated environment (although the old WebTrader is always usable), and perfectly accessible from any mobile and tablet versions.
Moreover, in November 2016, eToro has launched a new innovative product integrated in its new platform, the eToro Copyfunds.
New eToro Platform Reviews
EToro Review – Social Trading
EToro is surely the most advanced platform in circulation with respect to Social Trading.
Subscribing to eToro not only means to open a trading account with a broker, but it means more than anything to be part of a great community of experienced or aspiring traders, a real Social Network for the investment world, having available all the necessary tools to trade in classical or advanced way.
With eToro you can:
- operate independently on the market (Retail Trading)
- follow other traders like you would on Facebook or Twitter, to observe the operations they perform, and copy them manually with a click
- let eToro replicate automatically and proportionately on your eToro account all the operations performed by the traders you choose (Copy Trading)
- do all three things, participating in the sharing of trading and investment information with the entire community to make the best choices (Social Trading)
EToro is a platform where the information and the trading activities of each user are shared, accessible to all, and organized as a kind of social network. Users have the opportunity to interact with each other as they would with Facebook or Twitter, giving like, commenting and sharing user-generated feed.
Let’s first point out that for eToro all the users are treated as traders, as indeed it is, given that they all indiscriminately have a trading account, either if they are only interested in copying, or if instead they are traders who want to be copied.
For eToro we are all traders, or as they say now, we are all “people”.
Every trader has a public profile, open to consultation, where you can find some data on past performance, and everybody can follow everyone, and in the same way everybody can even replicate the trade of everyone. Even those who have never opened a trade manually, but has only replicated other’s trade, could end up being copied (so it might happen to you too).
The vision of the users’ performance, however, despite being better than the past, it is certainly not up to others in the panorama, ZuluTrade among all. In eToro the past displayable data are really few, and it’s very difficult to make a precise idea of how a trader works, and what kind of risks he takes.
But here is where you find also everything the trader has done and written over time, the comments, the votes he received, and the answers he gave. While on one hand there’s a lack of accurate and detailed information, on the other hand, in true Social Trading perspective, there is the possibility of obtaining important information thanks to the “social” history of the trader.
Although all these Social features are really useful, and you can often really learn and improve thanks to them, we are of the view that nothing can replace the ability to have accurate and detailed information, and above all to have the ability to interpret them. In our opinion, in this perspective eToro has still a lot to improve.
It has nothing to envy however on the ease of sharing information. The investor has the opportunity to follow the chosen trader, without necessarily copying his trades automatically, just as it would with Facebook.
After clicking “Follow” all the trader’s activities, and those connected as comments and like of other users, will be reported as a feed into the investor’s board.
Then, in the eToro Markets section you can display all the products (currency pairs, stocks, etc) on which you can trade with CFDs.
The great thing is that each product is treated as a kind of hashtag. By clicking on one of it a news feed opens, into which you can see all thoughts, comments, links and resources related to that product, from all the eToro traders, particularly those that are considered popular investors.
This is what is rightly called “Wisdom of the Crowd“, and on this eToro is among the best ever.
EToro Review – Copy Trading
With the eToro OpenBook you can share, comment, follow, just as you would on a Social Network. Then, when you think it is really worth, you can choose to replicate automatically on your account every trade executed by that trader.
To be able to choose him you need to evaluate him objectively, but even before evaluating, you need to find him.
The eToro search tool is significantly improved compared to previous years, when it was really lacking any customizable and precise parameter, and on top of the rank they were always showning the best traders on the basis of the winning percentage only. This meant that traders with 100% winnings (the most dangerous, because they never close losses) were always at an advantage compared to the others more deserving.
Today the filters have increased and diversified, but in our opinion, they are still not enough to satisfy the inquiries of those who know exactly what they are looking for. Note also the fact that the filters are not explained very well, and that we had to take some time to make the support team explain us precisely what they meant and how they were calculated.
The replication of the signals occurs in a very fluid way, and being eToro a broker that contains within itself both the sender and the receiver of the signal, the functioning is really efficient. The slippage values in fact are virtually nonexistent.
Investing in Copy Trading with eToro means creating a People-Based Portfolio (portfolio of persons) in which to insert the traders from who you want to automatically replicate the transactions on your eToro account.
A point in favor of eToro is being able to replicate the traders signals according to a proportional system, using simple percentages, in order to increase or decrease the exposure based on the their own ability or the level of risk you want to keep.
You can invest up to 40% of your capital on a single trader, with a minimum of $ 100, and this means that eToro prevents you automatically (and rightly so) to risk everything on a single trader. In addition to this, it is possible (but also necessary, given the changes in the MiFID European regulation for Copy Trading) to set a stop loss per trader, ie a level of loss at which eToro will stop replicating its transactions on your eToro account.
Managing the copy trading on eToro is therefore quite simple, given especially the scarcity of customizations regarding money management or the editing of the trader’s strategy, a point on which ZuluTrade has invested heavily instead.
Data and Performance sharing Review
We have said that on eToro we are all considered as traders, and in fact everyone can be found (at least those with a real eToro account activated, about 165,000 users), followed, copied or replicated, but above all everyone has a profile on which data and performance are shown.
This is definitely the less bright side of eToro. On the traders’ profiles you can find some data, but they are definitely few and mostly shown in a rather unuseful way.
For example, the trader’s performance are shown as a monthly histogram chart, with the value as a percentage of the profits or losses from the previous month, and an annual total. There isn’t therefore a chart with a normal equity line (as it once was), that would have been great to graphically verify the trader’s performance. If nothing else, eToro has changed the performance calculation formula, making it independent from any profits and withdrawals made by the trader (in the past profits related to copy trading activities were loaded on the trader’s account and were considered as performance, distorting the real trader capacity).
The absence of an equity linear graph makes also impossible the graphical observation of drawdown, something very useful to verify the trader’s dangerousness. In this regards, eToro has created a trader Risk Score according to a proprietary formula, calculated monthly on a scale of 1 to 10, taking into account different values such as leverage used by the trader, the volatility of his portfolio, the correlation between tools, etc., in order to give a vote on the objective risk of his strategy.
In essence, what eToro tries to do is simplifying the the analysis the investor has to make, and keep him from having to deal with data and graphics in order to understand whether the trader can make more or less to his case. EToro tries to answer in a short time and with little effort.
Our idea is that, although the eToro effort and goal are laudable, it should nevertheless be granted to the more experienced (or more eager) user the ability to access a more comprehensive level of data, to perform more advanced and in-depth analysis.
One side on which eToro has improved in this respect is the view of the trader’s portfolio, ie of all the instruments on which it’s operating now or has operated in the past, and by what percentage and exposures, but above all the visibility of the historic trade list, ie a list of all the trades executed by the trader.
If before they were displaying only the last 100 operations performed, you can now access a full year, with a full list of executed trades and some details like date, time and execution prices. In this sense, a true breakthrough eToro compared to the past, even if they could still do better by providing a view of the entire historical list, including more details, and making it downloadable in Excel format.
EToro Popular Investor Review
One of the qualities of eToro is definitely the fact that users, in order to be “visible” and thus potentially copied or replicated, must necessarily operate from a real account, with real money.
It’s not possible, in fact, to send replicable trading signals from a demo account. The demo accounts exist and can be used to infinity, but everything that is done on demo accounts remains private and not replicable.
This is a plus for eToro compared to other realities like ZuluTrade or ayondo, because it means that all the traders are also investing their own money, in the first person. However it’s a matter to be taken with caution, because now you can open an account with only $ 50, and eToro does not show (for privacy) the actual capital invested by the trader.
The eToro users are thousands and, thanks to the fact that on this platform you can trade on many instruments, you can find specialized traders in every sector, a key factor for the diversification phase.
Regarding their classification, users can be “verified“, or become “Popular Investor” too.
A verified user is a user of whom eToro has verified the identity, certifying that he is a real person. This is the first step to try to improve the quality of interaction in the community, since only those who are verified can tag other people or participate in discussions about markets or CFD. If you are not verified and someone follows you, he can view your feeds, but you won’t be able to tag other people, markets or CDF, and will therefore be impossible to interact with the community.
A verified user can then decide to become a Popular Investor. A Popular Investor is a trader who has decided to participate in the homonymous eToro program that allows him to gain if other users replicate his operations, ie to gain from Copy Trading. Participating is easy, it just takes to follow the guidelines which basically boil down to having a verified profile, with visible name and surname and clear picture of the face, and to operate for at least three months. At that point you can start climbing the rank and level up to earn more.
There are about 160,000 registered eToro traders, and practically the same number are verified, but only a hundred Popular Investor. It seems clear that limiting yourself to the latter can only lead to few results in terms of research. Let’s say that being a Popular Investor can be an added value, given that identifies a trader who has put his face exposing publicly in the first person.
In any case, considering the total of registered and replicabletraders, it’s clear that eToro is full of non-professional traders from which we must learn to stay away. It’s definitely possible to find good trader, but, as a percentage of the total, they are very few and not always easy to find.
For the complete discussion of these topics we refer to the lessons of the course eToro.
Traders commissions and payments review
Knowing how Popular Investor are paid is important to understand what their goals may be, and how this may affect their operating style and potentially increase or decrease the risks.
The eToro commission payment system has clearly improved compared to the past. In previous years the Popular Investor could convert only a small portion of the earned commissions in real money. The rest was paid as a bonus, not convertible to cash. In substance, it was charged on the trader’s account and appeared as a profit. It created many problems though, because these profits were showed as positive performances in the trader public profile. Obviously, external users could see gains that could never be replicated, because arising not from trading, but only from the payment of fees.
Now, fortunately, eToro has arranged this big problem. First, using a new performance calculation formula, that takes away from the equation any withdrawal or deposit, leaving only the actual trading performance.
In addition, the new Popular Investor Program has introduced the concept of “responsible trading”. Traders enrolled in the program start from level 1, and can climb up to the fourth if they are able to increase and maintain a number of followers with real accounts, getting a fixed monthly fee (plus discounts on spreads) that increase at the increase of the level, until getting a 2% monthly of the UAM (Asset Under Management).
This means that only the most responsible trader, operating under the responsibility guidelines, that are positively active within the community, will have the opportunity to become famous and get so many followers. Do not forget that, to participate in the program, you have revealed your name and photo of the face.
Compared to the past, this is definitely an improvement, however, the only parameter in order to level up, in the end. is to obtain new customers, and are not used precise rules designed to impose greater safety and soundness of the trader’s strategy to level up, as it is done successfully in Ayondo (read our Ayondo Review to learn more).
With this system, and with the fact that the data on the user’s operating style are scarce, a trader may in any case climb the top of the ranking despite having a risky strategy, as it has happened several times, reserving an unpleasant surprise to his followers.
All this to say that the popularity, the social communication, the simplification of analysis for the user and the new rules for the Popular Investor in any case cannot compensate for the technical and theoretical knowledge that an investor must have in order to make right choices.
EToro cost review
The first thing to point out is the fact that eToro offers an unlimited demo platform (and the chance to get an eToro Bonus on the first deposit), identical to the Live platform, with no time limit, in contrast to ZuluTrade and Ayondo where instead it lasts up to 30 or 21 days, respectively. Definitely a plus for eToro.
For those who want to invest real money, eToro has no extra cost, you pay no activation cost and no monthly costs. Note also the fact that eToro is now able to accept payments in various currencies, and not only dollars as it once was. Another step forward.
The minimum deposit varies from 50 to 500 usd, according to the country of origin and the payment method, even if the minimum is becoming more and more for everyone 200 usd. As I said, you can pay in a different currency from the dollar, the important thing is that the converted value matches the equivalent minum in dollar. To know for sure how much it is in your country, select the Live Portfolio from your platform, click “Deposit”, and eToro will tell you the minimum dollar amount and the relative exchange rate for the other currency.
EToro earnings, as all brokers, derive from the spread you pay on each operation and from the rollover fees. We must do report however that these costs with eToro are above average (3 pips for EUR / USD). The positive side is that being eToro the broker both for those who generate the signals and for those who copy them, the slippage tend to be very minimal or nonexistent.
EToro support review
One area where eToro excels for sure is the assistance and basic training. You can access all the material even with a simple free demo account, which is therefore highly recommended.
EToro devotes a section of all respect to the formation of new investors. The Trading Academy consists of three subsections:
- Live webinars
- Trading Videos
All this material is a good starting point for those just new in the industry. The best thing for a novice is to consult the eToro educational materials along with the InvestinGoal free educational material, to build more solid foundations. The teaching of eToro is still really well done, and it is good to consult to have general knowledge of the industry and to understand how the available tools works, but for sure it is not enough for those who want to deepen further.
Can you really earn money with Etoro Trading?
The answer is definitely “yes you can”, but it’s definitely not a child’s play, and you must not be fooled by those who say the opposite.
The ability to interact with users, to see and follow their story, along with the simplified analysis tools can give an appearance of simplicity, but the reality is quite different. You can read our blog post “How to make money with eToro – The truth” to have an idea.
In order to be profitable and really earn with eToro you need to have a theoretical and technical knowledge in order to understand autonomously if a trader applies secure strategies, solid and interesting for your portfolio.
This is the reason that prompted us to create the Advanced eToro Course, to give you a way to easily acquire all this knowledge, along with the display of our favorite traders.
Is eToro any good? Our opinion
Our final opinion is that eToro Trading is a great product for those interested more to the social aspect of trading, while it is not as suitable for those who are intrigued by the professional research and analysis of the trader to copy, Popular Investors of this case, coupled with the fact that serious good traders are not many, although they are on the rise.
Are you more interested in depth data analysis and in a very customizable management tool, with less social interaction? The right choice for you might be ZuluTrade.
Social interaction does not interest you at all, and you’re looking for traders who are more concentrated on soundness? Then you may want to go with Ayondo.
In our view, the lack of historical data on traders’ performance make eToro an uncomfortable investment tool for anyone who is not very interested in “sharing”, but is only willing to choose good traders, with precise characteristics, studied in detail , to entrust his money.
On the other hand, with eToro, thanks to all the Social Trading functionality, the side of sharing and then of accelerated learning is definitely an advantage, and the experience of Retail and Copy Trading, as well as an investment, can become also a path of growth and study.
With eToro you can rest assured that you will never feel abandoned to yourself, as it can happen in other situations where the gap between trader and investor is more marked.
Test eToro for Free
With eToro it is extremely easy to test the platform to get an idea. It just take a few seconds to open a no limit demo account (not all the forex brokers or social trading brokers allow that).
With this account you can try all the eToro trading and social features that, as you noticed reading this review, are really a lot.
That’s why we created our eToro Guide, to allow you to really try this platform, by understanding it in every detail, so you’ll be able to decide if it may or may not fit for your next investment in Social Trading.
Got some doubts? Just ask
Do you still have doubts about eToro? Did you fail to find on this eToro Review what you were looking for?
Contact us directly or simply write a comment below and tell us what you want to know. We’ll be happy to help you!
We’re waiting for you.
ETORO REVIEW – PROS
- Unlimited demo account
- Broker fully integrated
- Very active community, Very easy interactions
- Wide range of underlying thanks to CFD
- Platform and portfolio easy to manage
- Proportional signals replication
- Trader encouraged to share their real data
- All traders use real account
- Slippage almost nonexistent
- Rich educational section
ETORO REVIEW – CONS
- Few data on traders’ performance
- Inability to advanced money and portfolio management
- Large presence of non-professional traders
- Spreads and rollover fees higher than average