EToro is an innovative social trading platform that sets itself apart with the ability to copy other traders' strategies and the provision of solid educational content for beginners. Advanced traders may find some of the tools and options lacking, and the price may be something to be cautious of.
Innovative social trading platform
eToro sets itself apart from traditional forex brokers by connecting you with thousands of other traders to discuss and share your trading insights. By tapping into the wisdom of crowds, eToro aims to make you a smarter investor. As you follow other traders and vice versa, a community of openness and knowledge exchanging exists in a space where traditionally tight-lipped investors used to dominate.
Copy trading strategies with the Openbook platform
Perhaps more powerful than how eToro makes forex trading social is how they enable you to automate your trading by copying other traders’ positions. The Openbook platform allows you to allocate portions of your portfolio to copy other traders’ strategies and automatically make buy-or-sell decisions based on their actions. This different approach helps you learn and make extra money without actively trading.
Exceptional Trading Academy
eToro has a leg up over the competition when it comes to educational resources. Step-by-step videos on the trading platform enable you to quickly understand technical aspects of trading on the Web Trader platform. Webinars and e-courses are organized by trading skill level and help you increase your forex trading aptitude no matter how much experience you have. Finally, the eToroPedia gives you access to all the information and articles you need to advance your trading knowledge.
One-click trading with preset stops and allocation
Online forex brokers who offer one-click trading tend to focus solely on placing a trade with one click while ignoring the risk management side. eToro enables you to customize settings like a downside risk level and the amount of money to allocate to the trade. This way, when you use the one-click feature to enter a trade, you’ll have the peace of mind knowing your stop levels and risk are preset.
Access to introductory offers
Introductory offers are few and far between with online forex brokers, but eToro is an exception. When you open an account, you have the option to receive several $20 gift cards for companies like Amazon, Google or Apple by funding your account. In the spirit of social trading, eToro also offers a referral promotion for recruiting others to the platform, and each party receives $100 when the recruitee opens a new account.
High trading spreads
If you’re looking for a cheap forex broker, eToro may not be for you. For example, the stated spread on EUR/USD is 3 pips. For comparison, brokers such as Tradeking can be as low as 1 pip for the same currency pair. However, low-volume traders who desire the social trading aspects of the platform may look past the high cost.
Limited currency pair options
eToro offers only 16 currency pairs. In contrast, brokers such as FXDD and MB Trading offer 30 or more pairs. Experienced traders who want access to many cross currency options may prefer one of these other options to diversify their trading strategies.
Popout charts lack high-powered tools
While eToro’s charts include many analysis tools comparable to those of other brokers, eToro falls behind with the implementation of its charts. Charts are pop-out windows so they do not inlay within one web screen. This makes for a cumbersome toggle between chart window and execution window. Charting data also is delayed, which is not conducive to short-term trading.
Non-customizable trading platform
The Web Trader platform does not allow you to move panes or customize the layout of the screen in any way. Experienced traders who desire a level of customization may want to look elsewhere for a highly customizable platform. Options include FXCM, thinkorswim, and Forex.com.
Costs and Fees
- Forex Trade: $60
- Forex Trade Cost Type: Pips
- Futures Trade: N/A
- Mininum Deposit: $50
- Options Trade: N/A
- Stock Trade: $0.01
- Clearing Method: Dealing Desk
- Maximum Leverage (International): 400:01:00
- Maximum Leverage (U.S.): 50:01:00