eToro Review - the forex broker who introduced us to Mirror & Copy Trading
Our eToro Review - Updated March 2020
eToro was established in 2007 in Israel. The broker is a popular fintech start-up that focuses on social trading. eToro is currently headquartered in Limassol, Cyprus and is regulated by CySEC (Cyprus Securities and Exchange Commission), ASIC (Australian Securities and Investment Commission) and FCA (Financial Conduct Authority).
eToro was founded by Yoni Assia and his brothers, whose mission was to offer "accessible trading" to people around the world and reduce public dependency on traditional financial institutions. The eToro team chose to take a different road from other emerging FX brokers; they proceeded to build their own online trading platform instead of using the MetaQuotes platform. In 2009, eToro launched its innovative, brand new platform on WebTrader. In 2010, the broker changed their direction towards social trading and added the CopyTrader feature to their platform. This enabled them to become the world's first copy trading platform and allow users to mirror/copy the trades of other brokers.
In 2012 eToro launched it's first mobile trading app, which is available on Android and Apple devices. The broker then proceeded to expand to other markets and started adding stocks to its asset selection, along with commodities, currencies, etc. The broker continued to expand and grow; they introduced more tools like CopyPorfolios that allows users to copy bundles of assets or traders' portfolios.
While researching the broker for our eToro review, we found out that it was one of the first brokers to jump on the cryptocurrency train; the broker offer Bitcoin since 2013, but in 2017 they expanded to offering other cryptocurrencies like Ethereum, Ripple XRP, Litecoin, and others. Currently, eToro is working on expanding its services to the US.
Our eToro Review Ratings
The CEO and one of the founders of eToro is Yoni Assia. Mr. Assia is a young but highly ambitious businessman who studied Computer Science and began his career working as programmer before he got into the world of trading. Together with his brothers, Mr. Assia established eToro in late 2006. Before eToro, Yoni became a member of the YPO and has been repeatedly credited as a Fintech influencer.
Ronen Assia is Chief Product Manager and one of co-founders of eToro. Mr. Assia studied Art & Design ant BA level and Product Design at MA level. He has worked in technology and design at eToro for more than 20 years, but before that, Mr.Assia designed medical devices, household appliances as well as desktop and web applications. Currently, Mr. Assia oversees products and engineering at eToro.
The Chief Financial Officer of eToro is Shalom Berkovitz. Mr. Berkovitz studied Electric Engineering at BSc level at Israel Institute of Technology, and then he received an MBA from Tel Aviv University. In 2018, Mr. Berokovitz did a program at the Harvard Business School. He has worked in executive management for many years – as CEO of DSNR media group, CFO of Golden pages, and other organizations.
The Chief Operation Officer of eToro is Avi Sela. Mr.Sela has been working at eToro since the company's inception in 2007. Mr.Sela has an LLB from Bar-Ilan University as well as an EMBA in Finance and Marketing from Keloogg-Recanati. Mr. Sela has previously worked at Safecharge, Cassava Enterprises, and Zone4Play.
Jonathan Dayan is the VP of trading at eToro. Mr. Dayan has a BA and LLB in Law and Business management from IDC and an MBA from the Hebrew University. He joined eToro at the company's inception in 2007, and he currently manages all trading operations, pricing, liquidity, and dealing teams at eToro.
The VP of Product is Tal Ben-Simon. Mr. Ben-Simon has studied at Tel Aviv University, where he received a degree in Engineering and at The College of Management, where he received a BA in Business Administration. Mr. Ben-Simon previously founded a start-up called playSPEX. He joined eToro in 2009 and currently is in charge of the Product Department where he manages the end to end product lifecycle.
Israel Kalush is the VP of Engineering at eToro. Mr. Kalush received a BA in Computer Science and Economics from Bar-Ilan University. He has over 20 years' experience working in entrepreneurship and was previously the CEO of Dell Software in Israel.
At eToro, Mr. Kalush is responsible for leading the Engineering Department, such as Research & Development, Technical Operations, and Security.
The VP of Human Resources at eToro is Miri Kedem. Ms. Kedem has an LLB from the College of Management Academic Studies. She has previously worked in WiseBand Communications and in Fraud Sciences (acquired by Paypal), Optibase LTD and Mercury International (acquired by HP). She joined eToro in 2009 and leads the HR department.
Debbie Kahal is the General Counsel at eToro. Ms. Kahal studied in Tel Aviv and worked as a Partner in the Corporate and Securities Group in Meitar, Liquornik, Leshem, and Geva Tal.
The VP of Marketing at eToro is Nir Szmulewicz. Mr. Szmulewicz studied at the Hebrew University of Jerusalem; he holds an MBA and MSc in Stochastic Operational Research. At eToro, he is in charge of the marketing department, which includes SEM, Social Media, Community, Retention & Partners, and Growth Teams.
Etay Cohen is the VP of Customer Facing. Mr. Cohen has a BSc in Economics and Management, and prior to working for eToro, he was the CEO of a call center of a leading telecom company. He joined eToro in 2016, and he is responsible for the customer-facing personnel in the various offices of eToro around the world.
The board members at eToro are Santo Politi, Avner Stepak, and Eddy Shalev. Mr. Politi is the co-founder and General Partner at Spark Capital, Mr. Stepak is one of the major shareholders of Meitav Dash, and Mr. Shalev is the Founder and Managing Partner of Genesis Partners.
eToro UK is managed by Iqbal V. Gandham and Paul Chrimes. Mr. Gandham is responsible for the business activities of the company, while Mr. Chrimes is responsible for all the finance and operations for eToro UK.
Jasper Lee is in charge of eToro's China division, while Guy Hirsch is responsible for the US region and Robert Francis for the Australian region. Finally, Doron Rosenblum is the VP of Business Solutions at eToro.
eToro Trading Accounts
eToro offers just one standard live account to all its clients – the Retail account. To join eToro, you need to register and immediately use the demo account with $100,000 available in virtual money. To start trading with real money, you will need to verify your account. To do so, you will require to submit proof of identity (valid passport or government-issued ID), proof of address (bank statement, utility bill, council tax bill, etc. that must be not older than six months).
eToro also offers Professional accounts for their senior, more knowledgeable clients. As a professional client, you will have access to higher leverage – Retail accounts' leverage is capped at 1:30 by ESMA (European Securities and Markets Authority). A professional account will be allowed to open positions with a leverage of up to 1:400. Negative Balance protection (when your account balance goes negative due to market conditions) is available too.
To apply to become a Professional Client, you will need to meet certain criteria, such as professional experience (whether or not you've worked in the financial sector), how long you've traded for as well as the frequency of your trading, and your trading volume and portfolio. The approval process may take some time before your account changes will come into effect.
The only base currency available at eToro is USD. Account opening with eToro was fast and straightforward. The broker does not accept the following countries:
In 2018, eToro started expanding its services to the US market. At first, only a Virtual Portfolio (demo account) was available to US citizens. eToro planned a gradual rollout, and since July 2019, US citizens have been able to access real trading in many US States.
Not all markets are available to US citizens, but the broker is working on developing this to offer more services and products to US citizens.
eToro Trading Conditions
eToro is regulated by top-tier financial authorities like the FCA, ASIC, and CySEC. This means that the broker offers negative balance protection, which means that your account can never go below zero, should market conditions deteriorate. Non-EEA clients and holders of Professional accounts are not covered by negative balance protection, however. eToro keeps funds in segregated accounts, so company funds are kept in a separate bank account from clients' funds.
Depending on your jurisdiction, you will be under a different entity. For example, UK citizens can be compensated to up £85,000 as per the Financial Services Compensation Scheme of the FCA., while Australian clients are not offered any compensation. CySEC will compensate investors with up to €20,000.
eToro offers some of the lowest spreads on the market. The broker does not charge any deposit fees or commission; however, they do charge higher non-trading fees. For example, the withdrawal fee is $25 each time you take out funds. The minimum withdrawal amount is $50. The broker charges a very low inactivity fee of just $10 per month from the remaining balance after 12 months of not being active.
eToro's spreads are available on their website. Since the rates are variable, they are subject to change. The EURUSD pair is three pips, for example. For non-EU clients, eToro does charge commission. On ETFs, eToro offers unified spreads of 0.09%. eToro generally has low CFD trading fees compared to its competitors.
Depositing funds to eToro is free of charge. You can deposit money via debit/credit cards, bank wire, or using an e-wallet (PayPal, Skrill, Neteller, Webmoney,etc.). There are no charges for depositing funds with eToro.
eToro Trading Platforms & Instruments
eToro does not offer third-party platforms like MT4 (MetaTrader 4) or MT5 (MetaTrader 5). Instead, the broker has built its own proprietary platform that facilitates the broker's most important feature – social trading.
A significant focus of our eToro review is the revolutionary social trading tools that the broker's platform offers. The platform was built in-house and is regularly updated by the broker's developers. It is a multi-asset platform with over 2000 financial instruments across various asset classes.
eToro has focused immensely on developing its social trading tools since 2010. Social trading or mirror trading allows users to copy the trades of others. You can copy the trades of successful traders and achieve a more lucrative, positive trading experience in that way. What differentiates the platform from other social trading tools is how eToro managed to create a whole community around it. eToro's platform works as a sort of social media network where traders can interact, publish posts, comments, and share the reasons behind their trading decisions and strategies.
You will find the tool 'CopyTrader' on the platform that allows you to replicate the trades of others. In addition to this, you will use the tool 'CopyPortfolios,' which allows you to invest in 'Market Portfolios,' which is a bundle of assets like CFD stocks, commodities, or even people-based portfolios at the same time.
Copytrading on eToro is essentially part of the experience of using the broker's platform – you do not need to pay any additional fees for those tools. The platform's interface is interactive and offers the user a clean, simplistic design, and fantastic functions. Despite that, it's essential to point out that the platform is not as customizable as the MT4.
For professional traders, eToro offers the opportunity to become a strategic partner. This option works well for investment managers who have clients interested in trading. Essentially, it allows you to reach a higher online reach and utilize the broker's versatile, easy-to-use platform. For non-professional traders, but those with experience and successful strategies, eToro offers the opportunity to become a 'Popular Trader.' This enables you to share your trades, have them copied/mirrored, and earn money. You receive an annual fee plus a percentage from the traders who copy you – the fee will be paid out on a monthly basis.
Furthermore, the program allows you to grow as more traders copy you. You start as a 'Cadet' (no payment). Then you can grow to be a 'Rising Star' ($500 monthly payment), after that you can become a 'Champion' ( $1000 monthly payment) and finally an 'Elite' ($1000 + 2% AUM)Understandably that requires plenty of skill, knowledge, and responsibility. To reach the 'Elite' stage, your minimum equity must be at least $20,000. Having access to this level offers many benefits, such as :
- Getting featured in eToro marketing (available in all other levels too)
- A Platinum account manager
- Financial Times Subscription (also available in 'Champion' level)
- Fee-Free Withdrawals (also available in 'Rising Star' and 'Champion' levels)
Reasonably, to reach every level, you need to meet specific criteria like a minimum number of copiers, minimum AUM, and minimum time in level.
In terms of safety, we found the platform to be very secure – it offers two-factor authentication for logging in, for example. The platform is not available as downloadable software – you can use it either through a browser or on mobile (iOS and Android). The platform is multilingual and available in the following languages:
As we mentioned in our eToro review before, the broker offers over 2000 financial instruments across five asset classes. We noticed that the broker aims to offer their clients a variety of popular instruments for trading:
- Forex: the foreign exchange market is the biggest, most liquid market in the world. At the same time, it's highly volatile and can be risky. eToro offers all the major currency pairs as well as many minor and exotic pairs – there are 47 pairs available for trading.
- Stocks: Popular among investors interested in long-term investments. eToro offers plenty of shares to choose from large public companies like Google, Facebook, Amazon, Tesla, Apple, and more.
- Cryptocurrencies: eToro was one of the first brokers to offer cryptocurrencies to traders. The broker currently offers over 98 cryptocurrencies such as the popular Bitcoin, Ethereum, XRP Ripple, DASH, Litecoin, Ethereum, and newer ones like Cardano, IOTA, Stellar, EOS, NEO and TRON.
- Commodities: eToro offers 13 commodities for trading, both hard commodities like Oil, Gold, Silver, Copper, Natural Gas, Platinum, Aluminum, Nickel, and soft commodities like Sugar, Cotton, Cocoa, and Wheat.
- Indices: These are baskets of individual shares which can be invested into a portfolio. eToro offers indices like AUS 200, for example, which includes blue-chip Australian stocks. The broker also offers NSDQ100, China50, UK100, and more.
- ETFs: Also known as exchange-traded funds. Similarly, to indices, EFTs hold baskets of assets, but not just shares; commodities and bonds too. eToro offers 145 EFTs.
eToro Trader Education Tools
Educational tools at eToro are a bit limited, in comparison to other brokers. eToro has a detailed e-book called 'The Complete Guide to Fintech' – it covers a variety of topics such as financial basics, fundamentals of research, commodity trading, copy trading, and more. It also offers a detailed fintech glossary.
eToro also offers information on how to use their social trading platform to your advantage. It covers the various tools the broker offers. The broker also consistently publishes posts on Facebook, Instagram, Twitter, etc. and interacts with their users. Furthermore, eToro runs a detailed blog complete with daily market analysis, reviews, and insights as well as posts about the economic environment and world politics that can affect trading.
eToro Customer Support
Our eToro review would not be complete without a few words on the broker's customer service. We found it to be quite satisfactory; you can reach the support team on several channels and receive relevant answers quickly. The broker offers 24/5 support, and we found the best way was through live chat, although the web-based ticketing system, where you send your query by email, was quite fast too. Customer support is available in over 20 languages, but please note that eToro does not offer phone support.
In terms of research, eToro offers great technical analysis tools, and you can find market sentiment indicators as well as analyst recommendations. The platform offers you a section where you can find analyst consensus, average price target, hedge fund sentiment, and insider trading sentiment. The platform also has good charting tools, with 70 technical indicators available.
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Wednesday, January 19, 2022