eToro Review: Copy Trading Is No Scam!

EToro leads the pack in the social investment craze that has engulfed the retail market in recent years. The copy trading giant has amassed more than 3 million users since it was founded in 2006. The company, which has registered offices in Cyprus, Israel and the United Kingdom, is the self-styled Facebook of investing. Users can post investment tips and strategies in their status updates, copy other traders or have a chance to be a star performer themselves and build up a following of traders. In this review, Realmoney.co.uk puts the full eToro offering under the microscope.

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Introduce a Friend

At the time of writing this review, there wasn’t an introductory eToro bonus available. Still, eToro was offering users up to $1,000 for inviting ten friends to the platform. Under the terms of the friends introductory eToro bonus, those that take up the offer will obtain a $200 deposit bonus. After logging in to the platform via the bonus offer link, a user can click on a link to their e-mail account to introduce friends to the social trading platform or post up a link for the offer to social networks such as Facebook and Twitter.

Make Friends with Star Performers

EToro is the world’s largest social investment network. A pioneer in so-called social trading, the platform enables users to copy the trades of star performers with a proven record of success. Investors can trade currencies, commodities, indices and shares and have the choice of either making the trades themselves or following the trades of the platform’s star performers. Stock trading is done via Contracts for Differences (CFDs), enabling investors to go long or short on a host of leading shares including Facebook and Google. EToro exacts an overnight rollover fee on open positions that can differ according to the direction of the trade. For example, on a EUR/USD trade the platform extracts a 0.6 per cent fee on a buy position and a 0.03 per cent fee on a sell position. Spreads on the platform vary. Traders pay 3 pips on a EUR/USD trade, 0.08 pips on Facebook, Microsoft and Intel. Users pay a typical spread of 3 when trading the Nasdaq 100 index. After providing the platform with proof of identity such as a passport, users can quickly fund their trading account using a debit card payment.

The overarching philosophy of the investment network is that investors can make the wisdom of the crowd work for them. Trading is done on the OpenBook platform. Here you can search for the top social investors. If you spot a top performer on the platform that you’re interested in following you can allocate a portion of your trading account funds to copying his or her account. If he or she is making scam claims about their knowledge of the markets you’ll soon find out in the published trading stats. Users can take a trade over or stop copying a trader altogether at any time. The platform’s ethos of marketing itself as the Facebook of investing is apparent with traders on the platform using status updates to share their mood and knowledge of the markets. Users can interact on forums tapping into the ‘word of mouth’ insight that was available to traders in the exchange dealing pits of the eighties and nineties.

OpenBook on Your Mobile

The OpenBook platform is available on eToro’s mobile trading app, which offers the same level of functionality that is accessible to desktop users. This review found that you can use the app to manage your trading portfolio, access live rates, open and close positions and view the platform’s charting tools. A trading account can be funded using the app, enabling a trader to use his or her handheld device to make a quick trade on the move if an opportunity arises. The app is available to Android users at Google Play for operating systems 4.0 and above and the iPhone’s iOS operating system 8.0 or above.

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Candlesticks and Trading Courses

EToro offers traders on the platform access to Candlesticks, a charting tool that is particularly valuable for predicting price movements across currency markets. The platform also lets users view the prices of currencies displayed as a line charts or bar charts. Line charts display currency trends while bar charts allow traders to see the opening and closing price of a Forex pair, along with the high and low point during a selected trading period.

The platform offers interactive trading courses, including videos on the website that provide insight into the basics of trading instruments such as forex along with guides to different trading strategies that can be deployed. Online guides are also available, explaining how to make a deposit and withdrawal from an account, offering tutorials on how copy investing works and how the wisdom of crowds can be harnessed to boost investment returns. The platform also provides users with an economic calendar to give traders a heads up on impending economic data releases and events.

Practice in Virtual Mode

EToro allows users to practice trading stocks in virtual mode to familiarise themselves with the model. The demo trading account is identical to a real money account. A watch list of securities flashes in the main section of the screen while a sidebar on the left hand side enables users to scroll between their portfolio, a copy trade function and the different markets that are available to trade. When you click on the security or asset that you would like to trade a box opens up in the centre of your desktop screen, enabling you to open the trade. Here you can scroll between stop loss, leverage and take profit functions. The box also informs you of overnight and weekend fees that will apply on the transaction. A demo account is automatically credited with $10,000.00 in virtual equity. After a trade has been made a user can scroll into the portfolio section to keep track on the position or close the trade.

Supervision and Customer Support

EToro is a registered Cypriot Investment Firm regulated by the Cyprus Securities & Exchange Commission (CySEC) under licence number 109/10. The company is also regulated and authorised by the Financial Conduct Authority (FCA) and is fully compliant with the Markets in Financial Instruments Directive (MiFID). EToro offers users a customer service wall, enabling subscribers to post trading questions and queries regarding the service. This service will be valued by those that do extra due-diligence checks to avoid scam operators. A knowledge base provides a comprehensive trouble shooting guide along with information on the key features of the account. Users can also contact a customer service representative by completing an online form explaining the nature of their inquiry. Customer service support is available 24 hours a day, Monday to Friday. The success of eToro may result in scam operators offering shady copycat services. Whether you sign up for eToro or not, making sure that your broker offers such comprehensive levels of customer service is important for avoiding such scams.

Facebook of Investing

If you are an active investor who is open minded to new investment methods or a novice intrigued by the concept of the ‘social trading’ model, eToro is certainly a platform worth checking out. The world’s biggest social investment network has built up a loyal following of investors who clearly get a buzz from sharing trading ideas, mirroring the trades of star performers or even stepping into the limelight themselves. Everything about the platform is geared towards making the financial markets as accessible as possible to the ordinary investor. This is scam-free copy trading at its best. The platform offers users a bonus for introducing friends to the platform. This bonus offer further underlines the social ethos of the platform. If you are a believer in the wisdom of crowds or are just interested in giving copy trading ago, eToro could be the platform for you.

Risk Warning:Investing in leveraged products carries a high degree of risk. eToro offers protective measures to manage risk effectively, but it is possible to lose more money than invested in each trade. However you can never lose more than your total balance.