Multi-market trading platform eToro has grown to become one of the biggest and most recognized trading institutions in the world.
It offers traders the opportunities to gain exposure to many different assets and global markets, with competitive rates.
Probably its most unique and enticing feature is its Copy Trading facility, which allows traders to automatically copy any other successful trader of choice, or Copy Portfolios which allows users to invest in portfolios based on different asset types.
What Is eToro?
Launched in 2007 by David Ring and brothers Yoni Assia and Ronen Assia, eToro is a multinational trading company and platform with bases in Tel Aviv, London, and Limassol, Cyprus.
eToro has grown to become one of the most recognized financial companies in the world.
It is regulated and insured in Europe by the Cyprus Securities & Exchange Commission.
In the UK, eToro is regulated by the Financial Conduct Authority (FCA), which regulates the trading of financial securities in the UK, and in Australia, eToro operates under the Australian Financial Services License (AFSL).
With over 6 million users in many countries worldwide, eToro offers traders a different and more accessible way of trading.
eToro offers access to many markets including Bitcoin and Crypto Assets, Stocks, Commodities, Forex, ETFs, Indices, on all the world markets, such as the S&P, Nasdaq and FTSE.
It has a web interface and a smartphone application, both of which have a clear and simple UX.
Getting Started with eToro
Signing up with eToro is simple. When you land on the website, click on the ‘Join Now’ tab and it will take you to an electronic form that you have to fill out.
Once here, you should enter all your personal data that is required to open a new trading account, and once submitted, you will immediately have an account.
To begin trading you will be required to undergo a KYC process, which includes confirmation of residence (e.g. a recent utility bill), as well as a passport, or other form of officially issued photo ID.
New users are also required to complete a questionnaire so eToro can ascertain your level of trading knowledge. There are no pass/fail grades, it’s just that eToro like to know certain tailor-made packages are suited to different users.
eToro Virtual Account
With every eToro account comes a virtual account, so if you’re not a seasoned trader it’s an excellent place to practice.
It has all the features as your real account, but is funded with $100,000 virtual dollars. The two accounts can be switched to and from easily with a click of the account tab you wish to enter.
The eToro interface for the web browser has a grey bar down the left which you control everything from.
There are tabs for your ‘Watchlist’ that allows you to keep an eye on any asset you’re interested in, or any professional trader that you might want to copy trade etc.
The ‘Portfolio’ tab allows you to keep track of your portfolio. Whether you’re trading yourself, or copytrading, it breaks down every asset you’re trading, giving you the time of opening/closing the trade, the profit/loss etc.
The ‘News Feed’ will display any news or comments from other traders or assets that you have on your watchlist.
The ‘Trade Markets’ will take you to every market you will have exposure to through the eToro platform.
The cryptocurrency markets are 24/7 but if you’re interested in trading on the stock markets, they open and close at market local hours, so be aware that you might not be able to execute a trade if the market isn’t open.
The ‘Copy People’ and ‘CopyPortfolios’ allow you to copy professional traders or invest in professional portfolios put together by the eToro team.
The rest of the grey bar offers a ‘Help’, ‘Guide’ and other general settings, including the ‘Withdraw Funds’. They are all self explanatory and easy to follow.
Funding Your eToro Account
The first thing you should do is link your bank account (if you wish to send from your bank/debit card). Once this is linked you can send money seamlessly to and from the account.
To deposit funds, click the blue ‘Deposit Funds’ tab in the bottom left corner of the screen and choose the amount of USD you wish to send.
Next, select your desired payment method: ‘Online Banking’ or ‘Wire Transfer’ and complete the electronic form and follow each instruction.
It’s easy to understand and is a seamless process. eToro says it takes up to 3 days for online banking to be processed, but whenever I have sent money from my bank my account has been credited pretty much immediately.
Wire transfers do take a bit longer and the process is a bit more arduous so if you can transfer from your bank it would be easier, but if not then expect a wire transfer to take from 4-7 days at the latest.
If you’re not sending USD, then eToro will calculate the exchange rate and deposit the equivaent USD into your account.
Trading on eToro
One of eToro’s biggest attractions is the sheer number of trading and investment options open to you once you click on the ‘Trade Markets’ tab.
eToro is one of only a few platforms that allows users to trade multiple assets and cryptocurrencies. Most other brokerages or exchanges only allow for trading of traditional assets and cryptocurrencies.
If you want to trade Bitcoin, click on the ‘Crypto’ market tab, and you will be presented with several options.
You can long or short Bitcoin.
If you decide to short Bitcoin, you simply press ‘Sell’ with the amount of USD you like, and the amount of leverage. You can leverage a maximum X2 for Bitcoin and other cryptocurrencies.
If you are shorting Bitcoin, there is an overnight fee of $0.02 every day you keep the trade open.
If you want to long Bitcoin, you press the ‘Buy’ tab and follow the same instructions as shorting. Again you can only leverage X2 with Bitcoin.
If you want to buy and hodl Bitcoin, you simply buy the amount you want to purchase with X1 leverage and the Bitcoin will be purchased for you.
eToro will hold the Bitcoin on the platform unless you prefer to send it to your eToro wallet. It’s advisable not to keep your Bitcoin on the platform unless you’re trading.
If you are buying Bitcoin to hodl, you should send it to your eToro crypto wallet, which can take up to 24 hrs to process.
Once the Bitcoin is in your eToro wallet, you are free to store them there or move them to a more secure hardware wallet.
Of all the other markets, you cannot store the assets in a wallet, as this is only a cryptocurrency feature. However, your trading in whichever market takes on the same steps as mentioned above.
The charges vary, depending on the market, and so does the leverage.
If investing long term, especially a dividend portfolio is your thing, then eToro shouldn’t be your choice as eToro takes a cut out of the dividend.
Personally, I think of it as a trading platform, and the most appealing thing for me is the copy trading.
Copy Trading on eToro
The social elements of eToro are what makes it unique.
Copy Trading on eToro allows users to copy trade any other trader that has made their account open to copying.
You can research and keep on your watchlist, any trader that appeals to you. You can check out their full history to size up their success or failure.
Each trader has a risk rating so you can decide whether they fit your trading strategy.
If you find a trader that you would like to copy, you simply follow the instructions, complete the form of how much you want to copy with, set a stop loss, and it will then automatically make a trade whenever the trader you’re copying makes one.
If you copy trade with $1000, and the person you’re copying has $10,000 in their account then your trades will be X10 smaller than theirs. Everything is done automatically.
Because it’s a social platform there are chatrooms, and usually the copy traders you follow will give updates on their decision making etcetera. Users can comment, and most traders will interact with the users who copy trade them.
Traders who make their accounts public, are paid commission by eToro, so the more successful they are, the more followers they will get and the more money they will earn just from commission.
CopyPortfolios are another option open to users. These are basically pre-designed portfolios that you can copy. They can be trader portfolios, or market portfolios.
Example of market portfolios are the ‘BigTech’ portfolio which gives you access to all the big tech companies, or one of my favourites: ‘Short-Banks’ which is a trading portfolio of shorting banks.
eToro is a Behemoth of a Trading Platform
There are thousands of assets and markets on the eToro trading platform. Whether you’re into buying and hodling Bitcoin, shorting banks, ETFs, Forex markets, Indexes, whatever, if variety is your thing then eToro is likely a good fit for you.
The fees can be a little more than other platforms for certain assets, but overall it’s reasonable.
However, the best thing about eToro is the copy trading. Most people lose on trades because they aren’t skilled enough, or can dedicate the right amount of time to constantly watch the markets, and keep track of macro events.
Copying professional traders allows you to become a passive skilled trader. There are many traders making losses, but if you find the right trader to copy, you can make some serious gains, and enjoy your time on eToro.
None of this has been financial advice, and you should always do your own research.
To join eToro, click here…