There is no lack of forex brokers out there to choose from. Indeed, the market is oversaturated with brokers and trading platforms, all of them vying for your attention.
So which one do you choose? How do you narrow down your options to a single choice? The answer to that is research. And your research should start with reading reviews of the best forex brokers currently in the game.
That’s where our review of eToro and eToro.com comes into play. We break down the ins and outs of this particular forex broker so you better understand what it’s all about. We’re not trying to push eToro on you – instead, we want to give you our honest opinion on its pros and cons.
So read on below to find out more about eToro and their particularly unique forex trading platform. Note that this review is for the newest version of the eToro platform, which was released on November 5th 2015.
The sheer number of options in the forex and commodities trading industry make it very difficult for a company to stick out. Yet that’s exactly what eToro manages to do.
Located online at eToro.com, the Cyprus-based company is the first of its kind. It was founded in 2006 by brothers Yoni and Ronen Assia and David Ring. Under the name RetailFX, the team of like-minded thinkers worked hard to find a way to make financial assessment accessible to anyone and everyone.
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RetailFX made several big contributions to the world of online trading. Chief among these was incorporating graphic visualizations into their platforms. Not only did this make trading easier and more fun, it also greatly increased its overall accessibility for beginners. New traders found the graphics extremely helpful in learning the basics of forex trading.
Originally geared more towards beginners, RetailFX wanted to branch out to reach more experienced traders. They were able to do this with the creation of their “Expert Mode” platform. Designed with experts in mind, the new platform brought them access to a new audience.
It was around this time, in 2010, that RetailFX changed their company name to eToro. It was also around this time that they sought to merge their beginner-friendly platform with their more complex experts-only platform.
This is when what we know of as eToro today was formed. Several new features were launched alongside the new trading platform. These include eToro OpenBook social investment, the copy-trading feature, and a mobile version of the application.
And that’s only the beginning. Since then, eToro has continually refined their product. Committed to their customers, it’s readily apparent the company has taken their feedback into consideration. Their newest updates, in late 2015, to their trading platform reflect this.
Yet that’s not all there is to eToro. In fact, we haven’t even come to the most exciting part yet. The thing that really sets eToro apart from the pack is their social trading function.
Basically, this social trading platform connects you with traders from around the world. And there are literally thousands (if not millions) using the platform.
The benefits of this are numerous. A few of the most important include the ability to copy other traders and search for trading experts to learn from. It also allows you to connect and communicate with other traders to boost your own trading skills.
In a way, eToro is something like a cross between Facebook and Twitter. It features a live feed that scrolls through the most important information. You can use the platform to “follow” traders you’re interested in. You can “post” comments to these other traders. The live feed also lists the activity of the top performers in each market, as well as their gain percentages.
eToro is a great forex trading platform for just about anyone. It’s simple enough for beginners to use, yet packs in enough features for even the most seasoned trading veterans. On top of that, eToro the company is continually ranked as one of the best in the field. Dozens of awards plus near nonstop critical acclaim attest to this fact.
About Social Trading
We’ll get to our in-depth review of eToro in a minute. But first we wanted to run through social trading in slightly more detail.
As we mentioned above, social trading works like a social network for forex traders. It connects you with traders from around the world. You can then use the skills and knowledge of these smarter trades to make smarter trades yourself. It’s a win-win for everyone involved.
Though other companies have started to implement social trading into their forex platforms, eToro did it first. And despite the competition, they’re still the clear frontrunner. They’ve put a lot of effort into fine-tuning their social trading platform so that remains the best around.
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A company’s website tells a whole lot about that company. This is especially true for those involved in online services. As a forex broker, eToro is definitely involved in online services.
What we check for when we visit a company’s website for the first time is a great layout, plenty of information, and intuitive navigation. In addition to making the website easier to use, these factors tend to translate to the service or product itself.
Luckily, everything checks out as far as eToro.com goes. The website is very simple and straightforward. The most important information is readily available on the home page. Additional information is easy to find. On top of this, the website’s design looks really good and is easy on the eyes.
If, as we believe, a website is a good indication of a company’s product, then you shouldn’t have to worry about eToro’s social trading platform. Now, let’s get on into our review to see if this is the truth.
eToro doesn’t offer any specific products. Instead, they offer a singular service, their online trading platform.
However, the eToro service is broken down according to a few factors. These include the specific platform that you choose to use as well as the specific account you sign up for.
Let’s talk about eToro’s platform first. In previous versions of the service, you were prompted to choose between the eToro WebTrader, eToro OpenBook, and eToro Mobile Trading Platform. In the current version of the service, all three platforms have been merged into a single one.
With that said, let's look into and discuss “The New eToro.”
The New eToro
So what’s the fuss about the so-called “The New eToro?” Well, for one thing its brand spanking new. Released only a few months ago, it’s on the cutting edge of online social trading.
On top of that, The New eToro is a combination of all eToro’s previous platforms. Most of the features have made the transition and several have been upgraded. There are also a few new key features that we discuss in the next section “Top eToro Features.”
Luckily, The New eToro remains as easy to use and intuitive as ever. In fact, the new updates make it even more so. The merge between the two platforms means that you don’t have to go back and forth between the two. It’s all there in one neat little package.
Even better are the improvements to the platforms mobile response. The platform is compatible across all devices. It works seamlessly whether you’re on a computer, a tablet, or a mobile phone.
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New eToro Features
Once again, almost all of the features of the WebTrader platform and the OpenBook platform are still available in The New eToro. However, there are also several new ones.
Many of the most apparent changes relate to “Popular Investors” and “Popular Traders.” Anyone has the potential to become one of these. Indeed, this is partially what has enabled eToro to create and maintain a completely open network. Every can share. Every can copy. And everyone can interact. Sure, there is competition, but it’s healthy.
“Verified” status was also introduced in the new version of eToro. “Popular Investors” that go through the verification receive this status. A small icon sits next to your name in your profile. All you have to do is display your real name and real photo in your profile. eToro’s customer service team verifies that it is actually you.
Yet this is more than just a nice touch. Verification of who “Popular Investors” are adds an extra level of trust. It lets you know that you’re following and learning from real people – not bots.
Another noticeable improvement is that “Popular Traders” get rewarded when people copy them. “Popular Traders” now get fixed monthly commission payments depending on how many people copy them. The “elite” traders get an extra 2% of the funds under their management on top of their monthly commission fee.
Changes have also been made to the tools that help you find traders you wan to copy. The old “People Rankings” tool has been replaced with the new “Discover People” tool. It allows you to filter through eToro traders based on a wide range of parameters. In addition to Win Ratio, you can search traders by Gain Percentage, Profitable Weeks, Country, Assets Traded, and many more search terms.
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It’s important to point out that we still feel like there is room for improvement when it comes to the search tool. Some of the parameters are not clearly marked and you don’t really know why certain results show up. Yet these negatives are relatively minor and are sure to be fixed in future updates.
The New eToro keeps the information related to the past performance of traders very basic. This is done to keep everything simple for novice traders. Unfortunately, some advanced traders might find that the past performance metrics lack enough depth.
eToro has also changed the formula and display that show you this information. It used to employ the Dietz formula to calculate historic gains. Now it assesses your trades on a one year risk score table complete with a graph. The formula used assesses your trades on a month by month basis for the past year. The same formula is used to show you the metrics related to other traders.
The new formula is much simpler than previously. It also takes factors such as monthly deposits and withdrawals into account. Simply put, it’s more accurate than ever before.
Selecting how much to invest remains much the same. After selecting which traders you want to copy, you then decide on the amount to invest and how much to risk. You can invest up to 40% of your realized equity in a particular trader. A minimum of $100 is required. This prevents you from risking everything on one trader.
The “stop loss” option is also still available. It lets you set your maximum loss before you stop copying a particular trader. This is done automatically if the maximum is ever reached. It is a basic yet very useful money and risk management feature. Beginners will benefit from it in particular.
Earlier on, we mentioned that there are several different account types to choose from. These include the Bronze Trading Account (Basic Level), Silver Trading Account (Intermediate Level), Gold trading Account (Advance Level), and VIP Trading Account (Professional Level).
The account type that you choose will depend on what you want to use the eToro service for and how often you plan to use it. Most new users, as well as beginners new to forex trading, opt for the Bronze account.
The Bronze account has no annual fees and starts at 3 pips for EUR/USD trading. It requires a minimum deposit of $250. You can’t deposit more than $1,000 into this particular account.
Each account type after that, Silver, Gold, and VIP, is based on increasing deposit amounts. The VIP account is for serious traders interested in depositing at least $20,000.
In addition to these four accounts, eToro offers a special type of account that often fails to be mentioned in other reviews. This is a special Islamic trading account for Muslim users. It abides by the no Riba principle while still allowing trades to be made.
eToro has long been considered one of the most reasonably priced online forex trading platforms. And the same still holds true for the new version of the service.
First of all, eToro doesn’t charge a fee on trades. It also doesn’t require a fee upon sign up. Joining the service is completely free.
In fact, the only way that eToro makes money is through spreads. This is the difference between the Ask and Bid price on each trade.
eToro also provides free practice account. These accounts offer a great way for beginning traders to make sure eToro is the best platform for them. They also allow you to demo the social trading aspect of the service.
Each practice account comes with $10,000 in virtual money. You can make trades with this virtual money to get a hang of the process. You can even use social trading features like “Copy Trader” to see what they’re all about.
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The Downside of Using eToro
Like any company, eToro isn’t perfect. There are a few criticisms of the company that should be addressed.
First and foremost is the lack of high-powered tools. While eToro offers all the tools a beginning trader will need, experts might feel they’re not up to par. One of the chief complaints is the lack of charts that show trading metrics.
The last complaint we have about eToro is that it’s not available in the United States. The company is working hard towards making it available in this country soon. For now, however, US traders need to look into other options. eToro is also unavailable in India, Sri Lanka, and Bangladesh.
eToro Customer Support
Outstanding customer support is critical for any online service. Yet it’s even more important for a service that actually handles large sums of your own money.
Fortunately, eToro pulls through in this department. The company makes customer support a top priority. They’re committed to their customers through and through.
In fact, we believe that eToro’s customer support department is one of the best in the online trading game. We haven’t found a forex broker that has anywhere near the same level of support.
So what makes eToro’s customer support so great? It starts with their 24/7 live support. You can contact representatives on the phone or email at anytime of the day. You can also contact them through the live chat function available on their website. 24/7 customer support is critical for a company with users in countries around the world. Because of the vast variety of users from different countries, eToro offers email, chat, and phone support in several languages.
Are you a top-level trader yourself? Then it might be worth becoming a respected trader on eToro. Top eToro traders earn money by being followed by other traders. The commission can easily exceed $10,000 per month.
Beyond live support, eToro tackles the question of customer support with extensive online educational resources. These are readily available on their website at eToro.com. The vast majority of the time you’ll be able to find the answer to your question in these materials alone.
Yet eToro provides even more resources on top of this. They provide a trading academy that consists of step-by-step videos highlighting how to most successfully use their trading platform. Webinars and e-courses can also be found.
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The New eToro, updated in November 2015, is better than ever before. It merges the service’s two popular trading platforms into one, increasing mobile efficiency in the process. eToro is still a great choice for beginning and expert traders alike. It’s simple and easy to use. It’s the perfect way to learn about forex trading and interact with more experienced traders in the process.