Facts & Figures About Forex Trading & Social Trading In This eToro Review

eToro is a broker that has a fresh approach to Forex trading than most of the other competing brokers in the industry. eToro has a flair for launching innovative products that are quick to catch on to the trader’s imagination. Way back in 2008, eToro launched one of the best platforms in the Forex trading industry that revolutionized the way trading works. The platform was a masterpiece that had a rich graphical interface and easy-to-understand trading terminal to enable amateur traders to learn the ropes of FX trading. Although the platform had several issues that led to immense criticism, the broker was lauded for its effort to create a feature-rich platform.
eToro is more commonly known today for its social trading platform, the CopyTrader, which essentially allows verified clients to copy trades from other successful eToro traders. Social trading is proving to be highly popular among retail as well as institutional investors, and eToro has one of the most advanced CopyTrading systems in the Forex markets. However, there are also a few downsides to choosing eToro, which will be discussed in this eToro review.

eToro Regulation & The General Reliability Of The Broker

eToro is regulated by the CySEC and the FCA under its brand name, while the US branch of the broker is regulated by the CFTC under the trading name of Tradonomi LLC. The interesting part of the US eToro regulation is that the broker does not accept traders from the US, which is a very strange strategy. Upon deeper investigation, it is clear that the core services offered by eToro are in direct conflict with the CFTC and NFA rules regarding FX operations and carrying out Forex brokerage services in the US. Merely changing the leverage to 1:50 and preventing hedging capabilities are no longer considered as a valid change to do business in the US, and it seems that eToro is revamping its entire organization structure before they can start accepting US traders once again.
CySEC regulation guarantees eToro the ability to offer services in the EU under the MiFID derivative, and the FCA regulation guarantees unprecedented safety and security for client funds. Although the broker is regulated by some of the best regulators, it is still seen that there are a few instances of the broker manipulating prices and freezing the platform during volatile market conditions. Since eToro is a market maker, the broker has been suspected of taking opposite trades to their client’s positions, and there is indeed a direct conflict of interest between the broker and its clients. Nevertheless, FCA and CySEC regulation enables clients to approach the regulatory agency or the Financial Ombudsman regarding any issues and complaints that they might have related to the broker’s conduct.

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