Facts & Figures About Forex Trading & Social Trading In This eToro Review
- Website: www.etoro.com
- Fax: +44-866-350-0881
- Office address:
- 42nd floor, One Canada Square,
- Canary Wharf E14 5AB,
- London, United Kingdom
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.
eToro Trading Platforms
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eToro offers an entirely different trading platform to most of the other companies, and it is not a secret that eToro has one of the most graphically advanced and feature-rich platforms in the market. Initially, eToro platforms were available as installable software, but the broker has since moved away from the desktop model to offer fully web-powered trading platforms in two different guises. eToro has designed a proprietary trading platform that helps the company to save on licensing costs and make changes according to their requirements.
The standard eToro WebTrader can be accessed through the browser to open and manage positions, perform technical analysis, and carry out other trading activities through the platform itself. The second type of eToro trading platform is the OpenBook interface that is essentially the CopyTrader version of the social trading platform that allows investors to trade the markets by copying other traders. The OpenBook platform is a highly intuitive interface that provides several metrics and analysis regarding the performance of all traders that take part in the CopyTrader program.
The OpenBook platform does have several trading restrictions, and it is not as easy to copy other traders freely as some of the other conventional programs available in the market. Investors have also complained about eToro’s copy trade conditions and the glitches in the software that does not reflect trades accurately. Hence, OpenBook is not a platform that allows you to set up the platform and forget it while it churns out cash. You should be proactive while using the OpenBook platform and continuously monitor your trades to ensure that you keep your losses to a minimum.
eToro mobile apps are available for download through the iTunes and Google Play stores, and eToro mobile traders can access their accounts either through the web platform or by using the dedicated apps. The mobile trading apps are also more advanced and graphically rich than the other mobile trading apps available for iOS and Android devices. eToro has certainly hit the right notes regarding offering the best platforms that users are surely going to enjoy.
eToro Bonuses, Payments, Spreads, & Other Account Information
The minimum deposit for an eToro account is $50, and traders can open a position from $25. eToro has been consistently raising their initial deposit limits and the minimum lot sizes over the years, as they started from just $5 minimum deposit and $2.5 minimum trade size when they started in 2008. The highest eToro leverage is 1:400, and traders can choose their leverage while opening a position. This is one of the biggest advantages of eToro, as the traders can tweak their leverage and margin on a position-by-position basis. The drawback is that scalpers do stand to lose all of their money if they are not careful with using high leverage all the time.
eToro is not an ECN broker, and even for a market maker broker, eToro spreads start from 2 pips fixed. The higher spread is another disadvantage of the broker, as nowadays, market makers are offering standard spreads starting from 0.5 pips. The high leverage and spreads can be a hindrance to successful trading unless the trader realizes the pitfalls of high-margin investments.
eToro offers attractive bonuses, which helps traders to earn up to 20% initial deposit bonus for a maximum of $10,000 eToro bonus per trading month. The company also offers seasonal promotions and CopyTrade bonuses that are designed to keep traders interested and committed to maintaining their account with eToro.
eToro has a responsive customer service channel that includes a live chat feature, but the representatives are not always knowledgeable, and traders have reported inconsistencies in the way the support staff deals with clients. However, for most traders, the customer service department should sort out issues and help traders enjoy a pleasant and excellent trading environment.
eToro is one of the few brokers that are hard to ignore, but they do have some niggling problems that need to be addressed before they can satisfy a majority of their clients. Lower spreads, improved account transparency, better trading conditions, and an overhaul of the customer service department are a few issues that can help eToro address a majority of their client issues.