December 5

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eToro Review | Broker breakdown

By Jack Morgan

December 5, 2019


eToro Review- Pros and Cons Uncovered

eToro is an innovative social trading platform that has gained widespread approval from major regulators in the UK, US, Australia, and the EU.

It offers unique sentiment indicators, as well as a simple interface, and reasonable fees.

If you’re a trader interested in social or copy trading rather than complex technical analysis, then we strongly recommend that you consider eToro as your broker.

Today, we’ll do an in-depth analysis of eToro as a forex broker, but before we dive into our analysis, its important to note that 75% of retail investor accounts lose money when trading CFDs with this provider.

Review summary:

91%

​Coming in at a score of 91%, eToro ranks amongst our top 5 best forex brokers.

It stands out from its competitors due to its unique sentiment analysis indicators.

A more competitive spread and efficient customer service would have seen this score shoot up into the high 90’s.

Pros:

  • Proprietary sentiment indicators driven by large community
  • Simple and efficient interface on web and mobile
  • Tier 1 regulator approved
  • Over 70 technical indicators offered

Cons:

  • No phone or live chat support
  • Uncompetitive spreads

Warning: 76.4% of retail CFD accounts lose money when trading CFDs with this provider

Is ​eToro Safe?

When it comes to regulatory approval, eToro passes the test with flying colors. It has gained approval from most of the major regulators. These include the CySEC (EU) the FCA (UK), the FinCEN (United States), and the ASIC (Australia).

Its record is not spotless though. In the past, it has been fined by the CySEC for undisclosed reasons, and it has been banned from operating in Quebec, for marketing binary options without being registered.

These are both minor infringements though, with the former resulting in a €50,000 fine and the latter amounting to a small beaurocratic dispute.

eToro is not publicly listed and thus does not disclose its financials. However, it has raised over $220 million in funding in the past few years. This would suggest that the company is well capitalized, and investors are happy with its financials.

Warning: 76.4% of retail CFD accounts lose money when trading CFDs with this provider

​eToro reviewed: Commissions and Fees

eToro operates in a “no commission” structure for forex trading. This means that it does not charge a fixed cost per trade, but instead includes its fee in the spread, which varies according to market conditions.

In comparison to some of its peers, eToro underperforms when it comes to the spread. At publishing time, eToro was offering 3 pips on the EUR/USD, with some of its competitors offering spreads of under 1 pip.

It charges an inactivity fee of 10$ per month after 1 year of inactivity.

Beginner traders should also be aware of eToro’s 25$ withdrawal fee. If you have limited capital available, this fee can easily eat up your profits, so if you need to make small withdrawals frequently, you might want to consider another broker.

All in all, these are reasonable, albeit slightly above average, commissions.

Commissions and Fees Summary:

Feature

​eToro

Minimum Initial Deposit:

$200.00

Inactivity Fee:

$10.00 / month after 1 year of inactivity

Spread:

Variable: 3 pips on the EUR/USD (Dec 2019)

Overnight Holding Fee:

(6.45% + LIBOR rate) / 365

Withdrawal Fee:

​5$

eToro Reviewed: Platforms and Tools

As a tech startup with a focus on social trading, eToro’s web platform varies a bit from its competitors.

Instead of the typical widget-based dashboard with prominent charts and price tables, eToro’s dashboard is a simple list of your “watchlist” financial instruments, quoting the latest prices, % change, sentiment, and a small price chart.

This is a refreshing approach to the trading dashboard, which can be quite overwhelming. As soon as you login, you’ll get a sense of how the market and your positions are performing. Once you’re ready to start trading, you can move to the “trade markets” tab, which has a more traditional chart view.

eToro also offers an advanced charting tool called “procharts”. Here you’ll find a wide variety of technical indicators that we found to be among the best in the industry.

click on images to enlarge:

Web based trading dashboard

eToro's charting section- "procharts"

Portfolio tab of web based platform 

Etoro Reviewed: Customer Service

eToro’s customer service experience is a mixed bag.

On the one hand, it does not offer phone support or live chat. This was a major red flag for us, as we view these two channels as crucial requirements for a long-term forex trading brokerage partner.

On the other hand, when we tested e-mail support, the answers were fast and relevant.

Overall, we like to have somebody available to talk to on-demand, preferably over the phone. We hope this is something eToro improves upon in the future.

Warning: 76.4% of retail CFD accounts lose money when trading CFDs with this provider

​eToro Reviewed: Research

The biggest peculiarity of eToro is its social news feed approach, which can be seen below:

Rather than opting for one of the popular news feed providers such as Reuters or Bloomberg, it created a social media platform for users and analysts to share ideas.

Based on this social approach to trading, eToro offers very robust sentiment indicators. And this really is the platform’s main selling point: By having on the largest trading community posting updates and analysis, it can offer the most complete sentiment indicators.

In addition, eToro offers a vast variety of technical indicators, such as Bollinger Bands, RSI, and other common indicators.

Fundamental data for forex instruments is pretty much non-existent. The only tools you’ll find are a simple economic calendar and a news feed.

eToro Reviewed: Mobile Trading

The mobile trading app mirrors the experience of the web-based platform.

Your dashboard will consist of the same wish list you built in the web platform, displaying only the buy and sell prices.

Interestingly, eToro is one of the few apps tested that integrated its technical charting tool. These were limited to 5 very useful indicators that can help you make opportunistic trades on the go.

Overall the mobile experience was seamless and highly enjoyable.

Click on images to enlarge:

Mobile app dashboard

Potfolio tab of the mobile app

Social feed of mobile app

eToro Reviewed: ​Final Thoughts

If you’re a proponent of market sentiment-based trading, look no further than eToro.

It is not the cheapest broker and it does not offer industry leading customer support, but the value of its sentiment indicators and the ability to copy other successful traders outweighs these relatively small shortcomings.

It also has some of the best charting tools and one of the best mobile apps we’ve tested so far.

Warning: 76.4% of retail CFD accounts lose money when trading CFDs with this provider

​Jack Morgan

​Author: Jack Morgan

Jack Morgan is the senior broker tester at Financeeo. Bringing more than 20 years experience from the online broker industry. Jack has spent many hours rigorously testing brokers.

About the author

Jack Morgan is the senior broker tester at Financeeo. Bringing more than 20 years experience from the online broker industry. Jack has spent many hours rigorously testing brokers.

​Jack Morgan

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