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eToro Review 2022: Best Social Trading Platform For Beginners?

eToro Review 2020: Best Social Trading Platform For Beginners?

eToro is a fully regulated, leading global trading platform for cryptocurrencies, commodities, indexes, currencies, and stocks. Could you read our full eToro review here?

Since 2007, eToro has been a leader in the social trading space and valued over $800 million in 2018. eToro has registered offices in Israel, the United Kingdom, the United States, Cyprus, and Australia.

In 2022, eToro was also ranked as the best broker for cryptocurrencies and social trading.

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eToro Review – Pros

  • Offers free ETF and stock trading
  • Doesn’t charge any annual fees
  • Low minimum deposits ($50)
  • Allows trading of multiple instruments
  • 1,700+ shares to choose from
  • Offers social trading feature
  • Intuitive and user-friendly
  • Opening accounts is easy and seamless

eToro Review – Cons

  • Slow verification process
  • High forex trading fees
  • 0.5% currency conversion fee on deposits
  • Limited research tools
  • High withdrawal fees
  • Slow withdrawals

Account Opening On eToro

Opening an account on eToro is quite simple. Once you submit the necessary information, you have a 1 – 4-day wait as your identity is verified and the account is opened. In the US and Australia, you can open an account with just $50, while residents of all other countries need a minimum of $200. Plaid is used to connect to the customer’s trading account.

To fund your account, you can use Skrill, Ideal, Neteller, Rapid Transfer, PayPal, and Sofort. You can open cash accounts in the US, but you cannot have a cash account outside the USA. However, if you are trading currencies, there is leverage available.

Placing a Trade on eToro

How about usability?

It’s pretty simple. You need to click on the ‘trade’ button when viewing the currency, index, commodity, cryptocurrency, or stock on your watch list.
The ‘buy’ button is prominent on your portfolio listing. To sell a particular coin, tap or click on the drop-down arrow and choose ‘sell’ from the list. If you have purchased an entire position in several lots, you can close it entirely or part of it. If it was purchased individually, you could not sell off a part of it at a time. For example, you cannot sell just $10 worth of your transaction if you had bought $25 of bitcoin.

You can also click on ‘markets’ (outside the US) to see more assets available, including hundreds of equities, currency pairs, and contracts for difference (CFDs). Also, leverage is applicable and the customization of watch lists. You also have the option of setting a ‘stop-loss‘ and setting a maximum drawdown if you copy a trade. A stop-loss will automatically put in a sell order once your position hits a certain percentage or share price.

eToro Social Trading Feature

The unique feature of the platform is arguably the ‘copy trader’ feature. This is eToro’s social trading feature, which allows you to look through other users’ trading history, including what they have made or lost over any trading periods of your interest.

Once you are satisfied that you have found someone with a good trading portfolio, you can allocate funds that automatically allow you to copy their trades. This is one of the most valuable features, especially for new users with limited trading experience.

Copy trading is one of the critical reasons eToro is considered innovative among the fintech revolution leaders. You choose the successful traders who have built a solid reputation that you want to copy and settle on an amount you’d like to invest in. Then, the system will automatically copy everything they do in real-time at the click of a button.

How to Copy Trade

To use copy trading on eToro, there are some requirements that you need to meet. These include:

  • The minimum investment amount in a trader is $200
  • The maximum amount you can copy simultaneously is $100
  • You cannot invest more than $2,000,000 in one trader
  • Trades below $1 are accepted
  • Funds from a copied trade closed manually are deposited in your copy balance.

When Copying Trading, You Also Have Several Options

Copying all trades – You can copy all existing open trades of the copied trader. Prevailing market rates at the time of copying will apply instead of the rates when the original trade was opened. Stop loss and take profit rates are similar to the actual trade. Suppose the copied trader changes their stop loss and takes profit levels; this will also apply to your account. Your copied amount is not affected.

Copying only new trades – Here, you will only be replicating new trades that the copied traders open once you have initiated the copy action. Only the opened trades after the initiation of the copy action will be replicated in your copy account. New trades open automatically once the copied trader opens. Additionally, all the actions of the copied trader will automatically duplicate in your account. You are allowed to close a specific copied trade without terminating the entire copy account.

Copy stop-loss – this option introduces a risk-management feature to your copy portfolio. For each copy-relationship, you can manage real-time profit loss values. It is set at 40% of the invested value per the copy relationship as a default. If the copy value reduces by 40%, the system will automatically terminate that copy relationship and deposit the remainder to your copy account. You can manually set the percentage between 5% and 95%.

‘Popular Investors’ program

‘Popular Investors’ program

One of the biggest pluses for joining eToro is the ‘famous investors’ program that rewards users based on the number of copies other users have made of their trades in monthly commissions. In addition, it provides incentives for responsible trading as well as doing extensive research into the markets. This is one of the biggest pluses in our eToro review.

When you start performing well on eToro, you will soon notice that other users start copying you. You will continue to gain additional commissions as more users follow your trading style.

As a beginner, it will reasonably take you some time to build the number of copies, but it is not too hard if you consistently make solid trades as you learn from others and do your research.

It would also be wise to be active in the eToro community, make regular updates and answer questions, helping you get your name known and attract more interest.

eToro Fees

Since eToro exists as a company to make money from offering a service, it is expected to charge users a spread fee on positions. The exciting thing is that the costs of trading on eToro are significantly less (up to 20 times less) than brick-and-mortar fund managers and stockbrokers.

Another prime advantage is that trading stocks typically have the lowest fees on eToro compared to other platforms.

eToro Demo Account

Understanding that many of us are new to trading, eToro allows you to discover what it takes to make profits in the markets.

The dummy runs on eToro is a risk-free way to explore the possibilities for anyone new to the world of trading.

You are handed $50,000 in virtual eToro money coupled with unlimited access to the platform. If you drain it, you can contact eToro customer service reps, and they will add a similar amount if you need to practice further.

eToro Demo account

Wrapping Up Our eToro Review

If you are new to trading, eToro is ranked as a top trading platform for beginners with various features to help you get up to speed and thrive in an exciting journey of passive income. If you are disciplined enough, you can make money in your sleep.

The copy trading feature is one of the most attractive things on the platform. All you need is an eye for the most skilled traders, and you can copy what they do.

Remember, in trading, your capital is always at risk. As such, you need to be very responsible with what you invest. As a beginner, start small and work your way up. Once you gain confidence, you can go for more significant trades.

I hope you enjoyed our eToro review and happy trading!

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