Most assets are traded as regular CFDs and you also have the option of trading real 1:1 on cryptos, stocks, and ETFs.
Combined with this, the major trading feature and focus of eToro is on copy and social trading. This serves to make it a very dynamic choice as a forex broker.
eToro is an STP/NDD broker. This straight through processing order method with No Dealing Desk appeals to many traders who are more experienced and can provide a range of positives when trading forex and other markets.
The minimum lot size permitted by eToro when trading with CFDs is 1 micro lot. This is equal to 0.01 standard lots, or 1,000 currency units and makes trading accessible for all including new forex traders who are trying to manage risk levels effectively.
This minimum lot size can change the minimum investment you need depending on the asset involved. Here is an example:
- Forex: $33 (30:1 leverage)
- Indices: $200 (20:1 leverage)
- Commodities: $100 (10:1 leverage)
- ETFs: $50 (real 1:1)
- Shares: $50 (real 1:1)
- Crypto: $25 (real 1:1)
There are of course many specific trading techniques applied by experienced traders. These include hedging and scalping, both of which are not permitted by eToro.
There is also no spread betting allowed with the broker due to regulation, though you can implement APIs with the eToro platform. These are considered a type of algorithmic trading and may help you to identify patterns or trends in the market.
Managing risk in forex trading is another very important area for all traders. There are many ways you can implement through eToro in order to help minimize your risk levels.
These include orders like stop losses, take profit, limit orders, and trailing stops. The broker will also initiate margin calls to alert you when your equity is at a certain level against your open positions. In all, there are plenty of features to assist you with effective risk management through eToro.
The eToro leverage available depends which regulation you fall under and which country you are from.
The following limitations are defined by the European Securities and Markets Authority (ESMA), and apply to retail clients of eToro (Europe) Ltd (CySEC regulated) and eToro (UK) Ltd (FCA regulated):
- 30:1 for major currency pairs (such as EUR/USD)
- 20:1 for non-major currency pairs (such as EUR/NZD), Gold and major indices
- 10:1 for commodities other than Gold and non-major equity indices
- 5:1 for CFD stocks and ETFs
- 2:1 for cryptocurrency
The similar following limitations apply to Professional clients and clients of eToro Australia Capital Ltd (ASIC regulated):
- 30:1 for major currency pairs
- 20:1 for minor currency pairs, Gold or a major stock market index
- 10:1 for CFDs referencing a commodity (other than Gold) or a minor stock market index
- 5:1 for other CFD stocks and ETFs
- 2:1 for cryptocurrency CFDs
If you are a US-based forex trader, the only available leverage available to you is 1:1 since CFDs are banned in the US and you can only trade Cryptocurrencies.
You can check our guide where we can help you gain a better understanding of eToro margin and leverage.
Platforms & Mobile
The next important area we will look into is the available trading platforms and how you can trade through mobile or other devices with eToro.
Charting and Trading tools
The eToro platform provides a range of charting indicators and tools you can use to help with trading. These include a total of 13 chart drawing tools and more than 60 other tools and indicators.
There is also a very useful comparison tool that you can use to compare two or more assets.
Proprietary (Desktop platform)
Trading with eToro you will find that they offer only one type of platform. This is their own proprietary trading platform that has built a reputation over the years for being extremely intuitive and user-friendly. You will find this platform to be well organized and with less of a learning curve than some others.
Within the platform itself, one of the most important areas is the “feeds” section. This will allow you to fully engage in the social side of the platform with other traders. Here you can share information, predictions, news, images, and more to help each other.
Mobile forex trading is essential in today’s market. This area is again well provided for by the proprietary eToro mobile trading platform which can be used through your mobile or smart device on Android or iOS although not through a smart watch.
There are a variety of language available including English, German, Spanish, French, and Italian and the layout is similar to that of the desktop platform and it also has a dedicated feed and favorite assets section as well as a customizable watch list and the ability to send push notification alerts to your device depending on your need.
The two platforms are in fact very similar with the only difference being a reduction in drawing and charting tools on mobile. There is however, still plenty available to keep you very up to date and able to trade on the go with eToro mobile.
What would a top forex broker be without markets to trade? Here is everything that eToro has available:
eToro offers 47 Forex Pairs including major, minor, and exotic choices.
Spreads start from 1 pip on major forex pairs.
eToro offers 13 Commodities:
- 7 metals (Gold, Silver, Copper, Platinum, Palladium, Nickel, Aluminum)
- 4 Soft Commodities (Wheat, Cocoa, Cotton, Sugar)
- 2 Energies (Oil, Natural Gas)
13 major global indices are available to trade including:
- Asia: China, Hong Kong, Japan
- EU: UK, France, Germany, Spain, Europe
- USA: US Dollar Index, DJ30, NASDAQ, S&P500
Crypto and eToro Wallet
- 17 Cryptocurrencies (including the most famous like Bitcoin, Bitcoin Cash, Ethereum, Ripple, Dash, etc.)
- 1 Crypto-Metal (GOLD/BTC)
- 16 Crypto-Crypto
- 64 Crypto-fiat pairs
On the crypto trading, eToro owns and recently launched the eToroX crypto wallet. As an eToro trader you can transfer your cryptos to your eToro wallet if you want to store them.
If you are a US-Based trader with eToro, then this is currently the only category available for you to trade in.
- 17 Stock indices with over 950 stocks in total
- 13 european stock indices
- 2 US stock indices
- Saudi stock index
- Hong Kong stock index
- penny stocks
With eToro you can filter these stocks by Country or by sector. This can help you narrow down the specific areas and markets that you want to target for trading.
eToro offers 145 ETFs.
eToro ETFs are provided mostly by iShares, Vanguard and SPDR
There are a number of specific products provided by the eToro company. Most are integrated within your standard eToro trading account while some may be slightly spun off from that, but still available for you to use as an eToro trader.
Let’s take a look:
With the eToro CopyTrader, this forms an integral part of the eToro brand offering. Here you can start copying the trades of others with a minimum investment of $200 for each trader.
If you would like others to copy your trades, you will need to contact eToro and they will make the final decision on whether your profile is eligible to become a signal provider. If this does happen, you will be eligible to earn a commission from your followers.
We will take a more in-depth look at eToro Copytrader a little later in this review.
eToro CopyPortfolios are basically baskets of common assets or instruments almost like ETFs or even indices on a smaller scale. Commonly known as “blends” or “Sectors” outside eToro, they are typically groups of traders, shares, or certain assets that you can invest in and by doing so, you are investing in the overall growth of that portfolio. There are some different types of CopyPortfolio that you can invest in as follows:
Top Trader: These are different pools of the best traders. Here you may find traders that use Algorithmic Robots, traders that had particularly strong growth in the past quarter, or others with something in common.
Market Portfolios: Market portfolios focus on shares. When choosing the CopyPortfolio “Cryptos”, you are investing into the whole Cryptocurrency world which includes both cryptocurrencies and companies that invest in them.
Considering other miscellaneous investments here, there’s the Copyportfolio “Panicmode” which invests in assets such as Gold, S&P500, and more low-risk instruments. In total there is a selection of 19 market portfolios available at present.
Partner Portfolios: These are basically Market Portfolios created by third parties collaborating with eToro. They often try to replicate the portfolios of successful investors and mutual funds.
Investing in eToro CopyPortfolios can be an excellent way to provide yourself with a more diverse portfolio of investments and also help to balance risk in your forex trading or within other markets.
Real Stocks and ETF
As mentioned previously, eToro in most countries allows you to invest in CFDs trading on leverage, or in some cases to trade without leverage and own the underlying asset in the case of ETFs and Stocks.
There are a few key differences here in that, if you trade CFDs, you may incur interest in the form of overnight fees that you will not incur if buying 1:1 on stocks and ETFs. This can be a great tool for longer term investment and also allows for you to earn a dividend if this is provided by the company or ETF (eToro takes a percentage of this).
Investing in fraction of stocks is also an option that eToro provides to you as a trader. Here for example, if an Amazon share costs $1800, you can still invest as little as $50, and you will earn or lose money according to the fraction of the share you own. The same goes with dividends: if you invest $100 in Amazon share that costs $1800, you will earn 1/18 of the actual dividend.
This can be an excellent way to lower your investment risk and still diversify your trading portfolio, a great addition particularly for newer or less experienced traders.
Real Cryptos and eToroX
As mentioned earlier, trading in real cryptocurrency is also available from eToro. The minimum investment here starts from just $25 and fractional ownership with the profits and losses in proportion is also available.
As an eToro trader, your real crypto holdings can also be transferred to the eToroX crypto wallet service. This transfer will be permitted only if you are holding a significant enough balance in real cryptocurrency that you can check with the eToroX support team.
Social Trading – Copy Trading
As a new trader with eToro you may at this point be wondering, what is the difference between social trading and copy trading?
The answer is quite simple:
Social Trading is interactive in the sense that traders can share their thoughts with other traders. Not only that, but you can also follow and interact with them in most cases, very much like a social network.
Copy Trading is more operational in the sense that you can directly copy the trades of others (signal provider) and you will make or lose money based on this performance.
eToro provides both of these services, and it’s considered one of the best social-copy trading brokers
For more info check our etoro guide.